SMIA Chap 1 - Introducing The Concepts

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Strategic Management in Action
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Introducing the Concepts
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Learning Objectives
1. Discuss why strategic management is
important.

• 2. Define strategy and strategic management.
• 3. Describe the strategic management process.
• 4. Describe the three levels of organizational
  strategies.
• 5. Explain the historical evolution of
  strategic management.
• 6. Rebut misconceptions about strategy and
  strategic management.
• 7. Explain whos involved with strategic
  management and their role in managing
  strategically.

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WHY IS STRATEGIC MANAGEMENT IMPORTANT?

• Strategic Management
• Gives everyone a role
• Makes a difference in performance levels
• Provides systematic approach to uncertainties
• Coordinates and focuses employees

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WHAT IS STRATEGIC MANAGEMENT?
Strategy vs. Strategic Management
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The Basics of Strategy Strategic Management

• Definition of Strategy
• A series of goal-directed decisions and actions
  matching an organization's skills and resource
  with the opportunities and threats in its
  environment

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The Basics of Strategy Strategic Management

• Strategy Involves
• Organizations goals
• Goal-directed action
• Related decisions and actions
• Internal strengths
• External opportunities and threats

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The Basics of Strategy Strategic Management

• Definition of Strategic Management
• Decisions and actions where organizations
• Analyze current situation
• Develop appropriate strategies
• Put strategies into action
• Evaluate, modify, or change strategies

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The Basics of Strategy Strategic Management

• Strategic Management entails
• Basic managerial functions
• Planning
• Organizing
• Implementing
• Controlling

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The Basics of Strategy Strategic Management

• Basic
• Activities
• of
• Strategic
• Management
• Figure 1-1

Strategy Formulation
Strategy Evaluation
Strategy Implementation
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The Basics of Strategy Strategic Management

• Strategic Management
• Big picture view of organization influenced by
  its external environment

Interdisciplinary
Four aspects that set apart Strategic
Management
External focus
Internal focus
Future direction
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The Strategic Management Process

• Strategic Management in Action Figure 1-2

Analyzing Current Situation
Deciding on Strategies
Putting Strategies in Action
Evaluating and Changing Strategies
Situation Analysis
Strategy Formulation
Strategy Implementation
Strategy Evaluation
External Analysis
Organizational Context
Functional
Competitive
Chapter 2
Chapter 3
Chapter 5
Chapter 6
Internal Analysis
Corporate
Chapter 4
Chapter 7
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The Strategic Management Process

• Situation Analysis
• Scanning and evaluating context
• External environment
• Organizational environment

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The Strategic Management Process

• Strategy Formulation
• Three organizational levels
• Functional strategies
• Competitive strategies
• Corporate strategies

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The Strategic Management Process

• Strategy Implementation
• Process of putting strategies into action
• Strategy Evaluation
• Process of evaluating
• How the strategy has been implemented
• Outcomes of the strategy

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The Strategic Management Process

• Continuing Process of
• Strategic Management in Action
• Ongoing and continuous cycle of
• Strategy formulation
• Strategy implementation
• Strategy evaluation

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Looking at Strategic Managements Past

• Strategys Military Roots
• Battlefield strategies to gain an edge
• Exploit weak spots
• Academic Origins of Strategic Management
• Economic theory
• Early organizational studies

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Looking at Strategic Managements Past
Strategic Planning Strategic Management
Emerge Before 1960 Not an area of study During
the 1960s Strategy and Structure Corporate
Strategy Business Policy Text and
Cases During the 1970s and 1980s Becomes
distinct academic field Research focus on
strategic decisions vs. performance

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Misconceptions AboutStrategy and Strategic
Management

• Misconceptions
• Strategy and strategic planning are dead
• Strategy is strictly for top management
• Strategy is about planning
• Strategy is stable and constant
• Strategic management outlines
• ultimate destination route

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WHOS INVOLVED WITH STRATEGIC MANAGEMENT?
The Role of the Board of Directors Elected
representatives of the companys
stockholders Legally obligated to represent and
protect stockholders interest The Role of Top
Management Responsible for every decision and
action of every employee Providing effective
leadership Other Strategic Managers and
Organizational Employees Implement put the
strategies into action and monitor
performance Evaluatedo the actual evaluations
and take necessary actions Open book management
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The Role of the Board of Directors
Table 1-2 Typical Board Responsibilities

• Review and approve strategic goals and plans
• Review and approve organization's financial
  standards and policies
• Ensure integrity of organization's financial
  controls and reporting systems
• Approve an organizational philosophy
• Monitor organizational performance and regularly
  review performance results
• Select, evaluate, and compensate top-level
  managers
• Develop management succession plans
• Review and approve capital allocations and
  expenditures
• Monitor relations with shareholders and other
  key stakeholders
• Other responsibilities may be assigned depending
  on the unique culture and needs of the
  organization

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The Role of Top Management

• Top Management
• CEO Chief Executive Officer
• COO Chief Operating Officer
• CFO Chief Financial Officer
• CIO Chief Information Officer

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The Role of Top Management
Determining Organizational Purpose or Vision

• Effective
• Strategic
• Leadership
• Involves
• Figure 1-5

Establishing Appropriately Balanced Controls
Exploiting and Maintaining Core Competencies
Effective Strategic Leadership
Developing Human Capital
Emphasizing Ethical Decisions and Practices
Creating and Sustaining Strong Organizational
Culture
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Chapter One
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Questions