STRATEGIC MANAGEMENT PROCESS

(1) Setting objectives

(2) Making basic planning forecasts

(3) Reviewing alternative courses of action

(4) Evaluating which options are best

(5) Choosing and implementing your plan

Five Steps in the Basic Management Process

Hierarchy of Goals

- views the goals from the top of the firm down to frontline employees as a chain

- The company president sets a long-term goal, then the vice president sets their own goal according to the initial goal set, and so on and so forth down the line of employees until even their subordinates have their own goals in line with the top goal

Policies

broad guidelines delineating how employees should act

Procedures

spell out what to do in a specific situation

Strategic Plan

- company's overall plan for matching its internal strengths and weaknesses with the external opportunities and threats in order to maintain a competitive position

- "What are we now as a business and where do we want to be?"

Strategy

course of action

Strategic Management

process of identifying and executing the strategic plan by matching company's capabilities with the demands of the environment

Environmental scan worksheet

- includes economic, competitive, and political trends

- has information on the company's environment (external)

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

Strengths and Weaknesses (internal) Opportunities and Threats (external)

PEST Analysis (Political, Economic, Social, Technological)

all external factors

Vision Statement

- general statement of the firm's intended direction

- what the company wants to become

- future-oriented

Mission Statement

- what the company's main tasks are today

- present-oriented

Concentration Strategy

single-business one product line in one market

Diversification Strategy

expansion by adding new product lines example: Apple introducing self-driving cars

Vertal Integration Strategy

expansion by producing its own raw materials or by directly selling their products example: Apple stores being established

Consolidation Strategy

Reducing company size by merging with other business units or companies into a single, larger organization operational efficiency, eliminating competition, and getting access to new markets (example: Disney acquiring Marvel and Fox)

Geographic Expansion

entering new territorial markets (example: Jollibee in USA and UAE)

Competitive Strategy

identifies how to build and strengthen the business' competitive position in the marketplace how one company competes with another company

Competitive Advantage

- factors that allow a company to differentiate its product or service from those of its competitors to increase market share - what makes a company better than other companies?

Cost leadership

becoming the low-cost leader in the industry; prices

Differentiation

seeks to be unique along dimensions valued by buyers; innovation

Focus

market niche; targeting specific markets (often minorities)

Functional Strategy

what each department must do to help the business accomplish its strategic goals

Strategic Human Resource Management

formulating and executing human resource policies and practices that produce employee competencies and behaviors the company need to achieve its goals

Process

- identify company's strategic goals

- determine employee competencies and behaviors required to achieve the goal produce HR policies and practices to

- produce said competencies and behaviors

Strategy Map

- summarizes the role of each department in achieving the company's strategic goals

- clarifies employees' "line of sight" by visually linking efforts with company's ultimate goals

HR Scorecard

- process for assigning financial and nonfinancial goals or metrics to the strategy map chain of activities required for achieving company strategic goals

- "balanced scorecard" planning approach - balances hard data (finances) with soft data (customer satisfaction) to measure overall performance

- a specific evaluation standard for activities in the strategic map

Digital Dashboards

- desktop graphs and charts showing how the company is doing on all metrics from the HR scorecard

- specific measurement of performance in one activity in the strategy map according to the metrics set in the HR scorecard

Human Resource Metrics

quantitative gauge of a human resource management activity

Benchmarking

comparing the results of high-performing companies to current company to understand what makes them better

Strategy-Based Metrics

measures the activities that contribute to achieving a company's strategic goals measure of internal performance as opposed to comparison with other companies

HR Audit

analysis of the completeness, efficiency, and effectiveness of HR functions generally involves using a checklist to review functions and ensuring adherence to federal law and company policies

High Performance Work Systems

- set of HRM policies and practices that produce superior employee performance

- Managers use HR metrics to assess company performance and compare them with other firm

Employee Engagement

- being psychologicall involved in, connected to, and committed to getting one's jobs done

- engaged employees = high connectivity with work tasks = more effort to accomplish taskrelated goals

supportive supervision

Managers can improve employee engagement through _________________.

Corporate Strategy

identifies portfolio of businesses that, in total, comprise the company and how these businesses relate to each other