2.3 The strategic Management Process

Strategic Management Process

Method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage.

Strategy Process 3 approaches

1. Strategic Planning

2. Scenario Planning

3. Strategy as planned Emergence

Top-Down strategic Planning

A rational, data-driven strategy process through which top management attempts to program future success.

Scenario Planning

Strategy planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.

Analysis Stage

Managers brainstorm to identify possible future scenarios

Black Swan events

Incidents that describe highly improbable but high-impact events.

In the implementation stage, mangers execute the

Dominant strategic Plan

Dominant Strategic Plan

The strategic option that top managers decide most closely matches the current reality and which is then executed.

Critics of Top-down and scenario planning argue that

strategic planning is not the same as strategic thinking

Strategic Planning is like

Like following a strict recipe, lacking flexibility to adapt to unexpected changes.

Strategic thinking is like a

chef improvising with available ingredits allowing for quick and more effective responses.

Illusion of control

refers to managers inclination to overestimate their ability to control events

strategy as planned emergence

Strategy process in which organizational structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top management. Strategic initiatives can bubble up from deep within the organization through autonomous actions, serendipity, and resource allocation process.

Strategy Formulation concerns the

Choice of WHERE AND HOW in terms to compete

Strategic initiatives can be the result of

top-down planning or a bottom-up process

Which of the following are characteristics of the strategic plan that makes up an intended strategy? 

• Rational

• Structured

• Top-down

A(n) Blank______ is any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures

strategic initiative

A(n) ______ strategy is the outcome of a rational and structured, top-down strategic plan.

intended

If parts of a firm's intended strategy fall by the wayside, it is referred to as

unrealized strategy.

Strategy as planned emergence

A strategy process where bottom-up ideas are encouraged, evaluated, and coordinated by top management. New strategic initiatives can arise through:

• Autonomous actions (employee-driven ideas).

• Serendipity (unexpected opportunities).

• Resource allocation (how resources are distributed).

In strategy as planned emergence, organizational structure and systems allow bottum-up strategic initiatives to

emerge and be evaluated and coordinated by top management

Intended Strategy

The outcome of a rational and structured top-down strategic plan (plan you make ahead of time)

realized strategy

Combination of intended and emergent strategy. // the final result after combining your intended strategy (the plan) and emergent strategy (the changes you made along the way).

emergent strategy

what happens when things don’t go as planned but you find new ways to make it work // Any unplanned strategic initiative bubbling up from the bottom of the organization.

strategic Initiative

Any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures

Strategic intitiatives can bubble up from deep within a firm thorugh

Autonomous actions, serendipity and The Resource allocation process

Autonomous actions

Strategic initiatives undertaken by lower-level employees on their own volition in response to unexpected situations

In strategy-as-planned emergence approach ___ decide which initiative to pursue and shutdown

Executives

Serendipity

Random events, pleasant surprises, accidental happenstances that can have impact on a firms initiatives.

Resource-allocation process (RAP)

The way a firm allocates its resources based on predetermined policies, which can be critical in shaping its realized strategy.