Organization theory

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• Organization theory
• Bernard
• Selznick
• Katz and kahn
• Thompson

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• Business Policy
• Structure follow strategy
• Internal and external determine strategy
• Executive responsibility to organization

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Perform External Audit
EstablishLong-Term Objectives
Develop vision and mission statement
Generate, Evaluate Select Strategies
Implement Strategies Management Issues
Measure Evaluation Performance
Perform Internal Audit
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1. What is Strategic?
2. What is Strategic Management ?
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1. What is Strategic?
Henry Mintzberg (1991) 5P P plan P ploy P
pattern P position P perspective
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2. What is Strategic Management ?

• General meaning
• Fred R David(2007)
• The art and science of formulating implementing
  and evaluating cross-functional decisions that
  enable and organization to achieve its objective

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• Strategy formulating
• Vision and mission
• External and internal
• Long-Term objective
• Alternative strategic
• - Choosing particular strategic to pursue

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• Strategy implementing
• Establish annual objective
• Devise policy
• Motivate employees
• Allocate resources
• Develop strategy-supportive culture

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• Strategy implementing
• Creating an effective organization structure
• Redirecting marketing
• Preparing budget
• Developing and utilizing information systems

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• Strategy implementing
• Linking employee compensation to organization
  performance
• Strategy evaluation
• Reviewing external and internal factor base on
  current
• - Measuring performance Taking action

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2. What is Strategic Management ?
General meaning 2. Pearce II Set of decision and
actions that result in the formulation and
implementation of plan designed to a company
objective
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2. What is Strategic Management ?
General meaning 3. Dess as consisting of the
analysis decision and actions an organization
undertakes in order to create and sustain
competitive advantages
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Strategic Management in public sector

• Paul Joyce(2001)
• Classical planning model
• Businesslike strategic management model
• Visionary strategic planning model
• - foresight- base strategic management

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Strategic Management in public sector

• 2. Robert B Cunningham(1989)
• Environment perspective
• Decision-making perspective
• - Leadership perspective Hard work / Trait /
  Learning skill / Growth

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Meaning of strategy

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Meaning of strategy

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Meaning of strategy

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Meaning of strategy

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• political bureaucratic relationship
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Agency theory

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• Owner Principal
• Manager Agent
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Agency theory (count)

• Eisenhardt (1985) ?????? 2 ??????????????????????
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• Ouchi (1980) ?????????????? 3 ??????????
• ???????????????????
• Bureaucracy
• Clan

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The Strategy Diamond
1. Arenas Where will be active? 2. Vehicles
How will we get there? 3. Differentiatiors How
will we win in the market?
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The Strategy Diamond
4.Staging What will be our speed and sequence
of moves? 5. Economic logic How will we obtain
our return?
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The Strategy Diamond

• Arenas Where will be active?
• Which product categories?
• Which channels?
• Which market segments?
• Which geographic areas?
• Which core technologies?
• Which value-creation strategies?

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The Strategy Diamond

• 2. Vehicles How will we get there?
• Internal development?
• Joint ventures?
• Licensing/franchising?
• Alliances?
• Acquisitions?

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The Strategy Diamond

• 3. Differentiatiors How will we win in the
  market?
• Image?
• Customization?
• Price?
• Styling?
• Product reliability?
• Speed to market?

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The Strategy Diamond

• 4.Staging What will be our speed and sequence
  of moves?
• Speed of expansion?
• Sequence of initiatives?

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The Strategy Diamond

• 5. Economic logic How will we obtain our
  return?
• Lowest costs through scale advantages?
• Lowest costs through scope and replication
• advantages?
• Premium prices due to unmatchable service?
• Premium prices due to proprietary product
  features?

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What is Vision ? What do we want to become ?
What is Mission ? What is our business ? Creed
Statement
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• Vision in PA
• A guiding image of what success will look like.
• Formulate in terms of an organization
  anticipated contribution to broader society.
• An image of success that people within
  organization work together.

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• Mission in general
• - Statement of purpose / philosophy / belief /
  Business
• Reason of being

Mission in PA - Statement of Purpose / Values
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• Characteristics of a mission statement
• Declaration of attitude.
• - attitude and outlook
• - two reasons allows for generation and
  consideration of range of feasible alternative
  objectives and strategies without unduly stifling
  management creativity (not limit / not general)
• need to be broad to effectively reconcile
  difference among stakeholders

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• Stakeholders
• Employees - Creditors
• - Government - Customer
• Manager - Suppliers
• Unions - Distributors
• Stakeholders - General public
• Competitors - Environment Group
• Boards of directors

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Characteristics of a mission statement 2. Customer
Orientation. 3. Declaration of Social policy -
Responsibilities to consumers, environmentists,
minorities, communities and other groups
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• Nine essential components of mission statement
• Customers 6. Philosophy
• 2. Products 7. Self concept
• Markets 8. Concern for public image
• Technology 9. Concern for employees
• 5. Concern for survival, growth and profitability

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Mission in PA - Statement of Purpose /
Business / Values

• Mark Moore 3 Questions
• Produces things of value to people at low cost
  and authority.
• Legitimate and political sustainable.
• 3. Operationally and administratively feasible in
  authorized.

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• Meaning of mission in PA
• Statement of organizational purposes which set
  out
• the intended beneficiaries
• the main services to be provided
• the geographical boundary of organizations
  operations
• the desired consequences of the organizations
  services
• - a concept which expresses the organizations
  identity

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29 june 2008
External Audit
To develop a finite list of opportunities that
could benefit a firm and threats that should be
avoided.
Concept based of External Audit
The industrial organization view (I/O)
External factors importance than internal factors
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Key External Force (PESTs)

• Economic forces
• Social, cultural, demographic and environment
  forces
• Political, legal and government forces
• Technological forces CIO / CTO
• 5. Competitive forces CI / Cooperation among
  competitors/ Market commonality and resource
  similarity

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Performing Key External Process

• Importance to achieving long-term and annual
  objective
• Measurable
• Applicable to all competing firms
• Hierarchical
• 4.1 Pertaining to overall company
• 4.2 Functional or division areas
  

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Key External Audit
CIO Chief Information Officer Managing the
overall external audit process. CTO Chief
Technology Officer Technical issues of
information databases. - Data acquisition -
Data processing - Decision-support system -
Software Hardware acquisition
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Effective CI program missions
1. To provide a general understanding of an
industry and its competitor. 2. To identify
areas in which competitors are vulnerable and to
assess the impact strategic actions would have on
competitors. 3. To identify potential moves
that a competitors might make that would endanger
a firms position in the market. http//www.fuld.c
om/
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Effective CI program characteristics
1. Flexibility 2. Usefulness 3. Timeliness
4. Cross-functional cooperation
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Five-forces model

• Rivalry among competing firms
• Potential entry of new competitors
• Potential development of substitute products
• 4. Bargaining power of suppliers
• 5. Bargaining power of consumers

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Five-forces model

• Reduce inventory and logistics costs JIT
• Speed the availability of next-generation
  component.
• Enhance the quality of the part and components
  being supplied and reduce defect rates.
• 4. Squeeze out important cost savings for both
  and their suppliers.

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Industry Analysis The external factor
evaluation (EFE) Matrix

• List key external factors (O/T 10-20)
• Assign to each factor a weight that ranges from
  0.0 to 1.0(Sum 1)
• Assign a rating between 1 and 4 to each key
  external factor. (max 4, min 1)
• Multiply each factors weight by its rating
• 5. Sum

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The Competitive Profiles Matrix (CPM)
- A firms major competitors and its particular
strengths and weakness in relation to a sample
firms strategic position. - Assign to each
factor a weight that ranges from 0.0 to 1.0 (Sum
1) - Rating 3 4 S (max 4) 1 2 W
(max 1) - Factors are broader.
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Internal Audit
Gathering and assimilating information about the
firms management, marketing, finance/accounting,
production/operations, research and development
and management information systems operations for
determining strengths and weakness.
Concept based of External Audit
The Resource-Based view (RBV) Internal factors
importance than external factors (physical /
human / organizational)
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Key Internal Audit

• Rare
• Hard to imitate
• Not easily substitutable

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Key Internal Factors

• Culture
• Management
• Planning
• Organizing
• Motivating
• Staffing
• Controlling

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Key Internal Factors

• Marketing
• Customer analysis
• Product and service planning
• Finance / Accounting, etc.
• Resource and Development

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Key Internal Factors

• Management Information System
• Strategic planning software
• MIS audit

• Value Chain Analysis (VCA)
• Cost advantage and disadvantage.
• Benchmarking

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The Internal factor evaluation (IFE) Matrix

• List key internal factors
• Assign to each factor a weight that ranges from
  0.0 to 1.0
• Assign a rating between 1 and 2 to each weakness
  factor and between 3 and 4 to each strength
  factor.
• Multiply each factors weight by its rating
• 5. Sum

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• SWOT
• http//wyoming.gov/state/strategy/insurance.html
• 3. MOF

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SWOT
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• Strategic in action
• - Formulating Goals and objectives
• Levels of objective
• Strategic objectives / Management objectives /
  Operational objective
• Level of strategies

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Levels of objective 1. Strategic
objectives - Define as expected change in
conditions, welfare, or behavior as a consequence
of the initiation of some program or
activity - What the organization proposes to
do - Why and how it proposes to do so
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Strategic objectives Increase efficiency and
ensure consistency in the administration of
government activities by providing a full range
of capital facilities planning to service
programs of city.
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• Levels of objective
• 2. Management objectives
• Describe specific program actions in terms of how
  and where specific resource (project budgets)
  will be used.
• Should be precise, measurable, and time bound.
• If you can count it, count it if cant count it,
  describe it if you cant count it or describe
  it, forget it.

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• Finzs criteria of formulating management
  objective
• Objective should provide quantitative levels to
  be achieved
• Objectives that do not provide quantitative
  levels should at least provide a measure in terms
  of time and budget constraints.
• Objectives can be expressed in terms of
  satisfaction or acceptance on the part of those
  affected by services provided.
• 4. Objectives that cannot be expressed in the
  form of positive quantification nevertheless
  should be more specific than goal.

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Management objectives Conduct a series of
public meetings and workshops to foster greater
citizen involvement in identifying the
communitys long-rang goals and objective.
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• Levels of objective
• 3. Operational objectives
• Associated with the implementation and control of
  specific tasks, and the assignment of specific
  resources to achieve strategic and management
  objectives.
• - Strategic objectives focus on effectiveness.
• - Management objectives focus on efficiency.
• - Operational objectives reflect explicit
  performance measures.

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Operational objectives Conduct a series of
public meetings over the next three months to
discuss the current criteria and procedures by
which decisions are made in connection with the
allocation of the capital funds for major public
facilities and improvements.
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Operational objectives Work with Financial
Operation to develop new capital facilities
planning mechanism to assist service departments
in budgeting and management of their annual
operating funds in response to identified
program objective.
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• Hierarchy of Strategies
• Organizational strategies
• reflect strategic objectives and outline planned
  avenues for organizational development.
• Programmatic strategies
• designed to implement management objectives and
  address how to develop, manage, and deliver new
  and existing programs.
• 3. Functional strategies
• focus on administrative and support needs and
  their impacts on organizational efficiency and
  effectiveness.

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• Hierarchy of Strategies
• Large company Small company
• 1. Corporate level 1. Company level
• 2. Division level 2. Functional level
• Functional level 3. Operational level
• 4. Operational level

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• Type of Strategies(4/11)
• 1. Integrations strategies
• Forward integration
• - Backward integration
• Horizontal integration
• Intensive strategies
• Market penetration
• Market development
• - Product development

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• Type of Strategies(4/11)
• 3. Diversification strategies
• - Related diversification
• unrelated diversification
• 4. Defensive strategies
• Retrenchment
• Divestiture
• - Liquidation

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• Means for Achieving Strategies
• Joint venture / Partnering
• 2. Merger / Acquisition
• First mover Advantages
• 4. Outsourcing

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Strategic Analysis Stage 1. The input
stage 1.1 External Audit - The External factor
evaluation (EFE) Matrix - The Competitive
Profiles Matrix (CPM) 1.2 Internal Audit - The
Internal factor evaluation (IFE) Matrix
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Stage 2. The input stage 2.1 Strengths
Weaknesses Opportunities Threats (SWOT)
Matrix 2.2 Strategic Position and Action
Evaluation (SPACE) Matrix 2.3 Boston Consulting
Group (BCG) Matrix 2.4 Internal-External (IE)
Matrix 2.5 Grand Strategy Matrix
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2.2 Strategic Position and Action Evaluation
(SPACE) Matrix SPACE Matrix represent in two
internal dimensions, financial strength (FS) and
competitive advantage (CA), and two external
dimensions, environmental stability (ES) and
industry strength (IS).
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• Financial Strength (FS)
• 1. ???????????????????
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• 7. ????????????????????????????????

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• Competitive Advantage (CA)
• 1. ????????????
• ??????????????????
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• Environmental Stability (ES)
• 1. ??????????????????????????
• ?????????????
• ????????????????????
• ????????????????????????????????
• ?????????????????????
• ?????????????????????
• 7. ??????????????????????????

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• Industry Strength (IS)
• 1. ?????????????????? 5. ??????????????
• 2. ??????????? 6. ??????????????????????
• ???????????????????? 7. ????????????????????????
• ?????????????????? 8. ?????????????????
  ??????????

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2.3 Boston Consulting Group (BCG)
Matrix 2.4 Internal-External (IE) Matrix BCG
??? IE ???????????????????????????????????????????
? ?????????????????????????????????????? ??? BCG
???????? ??????? ???????? ????????????????????????
?????? (Relative Market Share Position)???????????
??????????????????? (Industry Growth Rate )
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?????????????????????????????? (Relative Market
Share Position) ??????? ??????????????????????????
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4 ?????
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0.0
1.0
0.5
20
0
- 20
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IFE
3.0
2.0
1.0
4.0
3.0
EFE
2.0
1.0
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2.5 Grand Strategy Matrix ???????????????????????
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Rapid Market
Weak
Strong
Low Market
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Strategic Control ???????????????????
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1. ??????????????????? ??????????????????????????
?????????????????????????????????? ???????????????
????????????? SWOT ???????? 1.1
??????????????????????????????????????????????????
????????? - ????????????????????????????? -
CEO - ??????????????? 1.2 ??????????????????????
???????????????????????? - ??????????????????????
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???????????????????????????????? 1.
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????????????????????????????????(???) 4.
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????????????????
????????????????????????????????? (Strategic
Management Under Complexity Environment)
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• ??????????? 1
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• ??????????? 2
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• ??????????? 3
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• ??????????? 4
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• ????????????????????????????????????????????????
  
• ?????????????????????????????????????????????????
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• ???????????????????????????????
• Bottom-up synthesis
• Butterfly Effect
• Lock-in Effect
• Edge of Chaos

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2 ???????????????????????????????????????????????
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?????????????????(Bifurcation Point)
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????????? 3 ?????????????????????????????????? 2
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5 ???????????????????????????????????????????????
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• ????????????????????????????????????
• Improvisation and Simple rule
• Managerial practices that contribute to a culture
  of frequent change.
• 2. Sequencing Past and Future
• 3. Setting Pace and Rhythm

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2. ????????????????????? ????????????????????????
????????????????????????????????
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???????????????????????????? 2.1
??????????????????????????????????????????????????
??????? ??????????????????????????????????????????
2.2 ????????????????????????????????????????????
??????????? ?????????