week 2 ready slides

7/31/2019 Week 2 Ready Slides

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Discussion (In groups of 5s)

Why should we even study/embark on

strategic planning.

What makes a decision strategic?

What is strategic management?

Prentice Hall, Inc. 2009 1-1


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Definitions of strategy (1)

..a pattern in a stream of decisionsHenry Mintzberg

..the long-term direction of an organisation

Exploring Strategy

Competitive strategy is about being different. It meansdeliberately choosing a different set of activities to delivera unique mix of valueMichael Porter

Sources:H. Mintzberg, Tracking Strategy: Toward a General Theory, Oxford University Press, 2007, p. 3


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Strategic Management: a set of managerial decisionsand actions that determines the long-run performanceof a corporation.

Includes:

Internal and external environment scanning

Strategy formulation

Strategy implementation

Evaluation and control


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Mission- the purpose or reason for the organizationsexistence

Vision- describes what the organization would like tobecome

Objectives- the end results of planned activity

Basic Elements of Strategic Management


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Strategies- form a comprehensive master plan thatstates how the corporation will achieve its missionand objectives

Corporate Business

Functional

Policies- the broad guidelines for decision makingthat links the formulation of a strategy with itsimplementation



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Strategic decisions


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Benefits of Strategic Management:

Clearer sense of strategic vision for the

firm Sharper focus on what is strategically

important

Improved understanding of a rapidlychanging environment


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Improved organizationalperformance

Achieves a match

between theorganizationsenvironment and itsstrategy, structure andprocesses

Important in unstableenvironments

Strategic thinking

Organizational learning

Additional Benefits of Strategic Management:


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Strategic flexibility:the ability to shift from onedominant strategy to another and requires:

Long-term commitment to the development andnurturing of critical resources

Learning organization


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Learning organization: an organization skilled atcreating, acquiring, and transferring knowledge and at

modifying its behavior to reflect new knowledge andinsights


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Main activities of a learning organization include:

Solving problems

systematically

Experimenting with newapproaches

Learning from pastexperience, history andexperiences of others

Transferring knowledgequickly and easilythroughout theorganization


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1. Environmental scanning

2. Strategy formulation3. Strategy implementation

4. Evaluation and control


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Environmental Scanningis the monitoring, evaluatingand disseminating of information from the externaland internal environments to key people within theorganization


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Strategy Formulation: the development of long-range

plans for the effective management of environmentalopportunities and threats in light of organizationalstrengths and weaknesses (SWOT)



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Strategy implementation: the process by which

strategies and policies are put into action through thedevelopment of:

Programs

Budgets Procedures


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Evaluation and control: the process in whichcorporate activities and performance results are

monitored so that actual performance can becompared to desired performance


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Performance: the end result of organizational activities

Feedback/Learning Process: revise or correctdecisions based on performance


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Triggering event: something that acts as a stimulus fora change in strategy and can include:

New CEO

External intervention

Threat of change of ownership

Performance gap

Strategic inflection point


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Strategic Decision Making Process:

1. Evaluate currentperformance results

2. Review corporategovernance

3. Scan and assess theexternal environment

4. Scan and assess theinternal corporateenvironment

5. Analyze strategic(SWOT) factors

6. Generate, evaluate andselect the bestalternative strategy

7. Implement selected

strategies8. Evaluate implemented

strategies


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Strategic audit provides a checklist of questions, by

area or issue, that enables a systematic analysis to bemade of various corporate functions and activities


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Levels of strategy (1)

Operational strategy

Business-level

strategy

Corporate-

level

strategy

News Corporation

diversifying from print

journalism into social

networking.

Website and marketing

improvements at My

Space to attract more

users.

MySpace engineers

increasing processing

Capacity.


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Levels of strategy

Corporate-Level Strategyis concerned withthe overall purpose and scope of anorganisation and how to add value tobusiness units.

Business-Level Strategyis concerned withthe way a business seeks to competesuccessfully in its particular market.

Operational Level Strategyis concerned

with how different parts of the organisationdeliver the strategy in terms of managingresources, processes and people.


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Strategy statements

Strategy statements should have threemain themes:

the fundamental goalsthat the organisation

seeks, which draw on the stated mission,vision and objectives

the scopeor domain of the organisationsactivities

and the particular advantages orcapabilitiesit has to deliver all these.


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Working with strategy (1)

All managers are concerned with strategy: Top managersfrequently formulate and

control strategy but may also involve others inthe process.

Middle and lower level managershave tomeet strategic objectives and deal withconstraints.

All managershave to communicate strategyto their teams.

All managers can contribute to the formationof strategy through ideas and feedback.


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Working with strategy (2)

Organisations may also use strategyspecialists:

Many large organisations have in-house

strategic planning or analyst roles. Strategy consultantscan be engaged from

one of many general management consultingfirms (e.g. Accenture, IBM Consulting, PwC).

There are a growing number ofspecialiststrategy consulting firms(e.g. McKinsey &Co,The Boston Consulting Group).


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1. Why has strategic management become so importantto todays corporations?2. How does strategic management typically evolve

in a corporation?3. What is a learning organization? Is this approach to

strategic management better than the more traditionaltop-down approach in which strategic planning is primarilydone by top management?

4. Why are strategic decisions different from other kinds

of decisions?


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Summary of todays Lectures

Thank you

Prentice Hall Inc 2009 1 29

week 2 ready slides

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