strama - prelims

is the art of getting things done through people, and things get done better with the right people.

Management

5 manegerial process/function

planning

organizing

staffing

directing

controlling

can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve objectives.

strategic management

strategic management is used synonymously with the term ______________

“strategic planning”

strategic management involves _____, _________ approach (the “science”) to gather information and assess situations.

systematic, analytical approach

alongside the need for creativity, intuition, and adaptability ("the art") when making complex decisions that cut across different functional areas of a company to achieve its long-term goals; this requires not only formulating a strategy but also effectively implementing it and continuously evaluating its effectiveness to make necessary adjustments.

strategic management

it requires coordination and collaboration between different functions like marketing, finance, operations, and research and development to align with the overall strategy.

cross-functional decisions

this encompasses the entire strategic management process, which involves analyzing the environment (internal and external assessment), developing a strategy, putting it into action, and monitoring its results to make necessary adjustments.

formulating, implementing and evaluating

is a process that helps organizations achieve their goals by planning, implementing, and evaluating strategies

strategic management

an ongoing process that helps businesses stay ahead of competitors and adapt to changing circumstances.

strategic management

establishing the vision, mission and objectives of the organization. This include both long-term and short-term goals.

goal setting

analyzing the external and internal environments. This involves conducting a SWOT analysis to understand the company’s position

environmental scanning

4 stages of strategic management

strategic objectives and analysis

strategic formulation

strategic implementation

strategic evaluation and control

developing plans and strategies to achieve the objectives. This might include corporate-level strategy, business-level strategy, and functional-level strategy.

strategy formulation

putting the formulated strategies into action. This involves resource allocation, organizational design, and managing the chane process

strategy implementation

monitoring and assessing the effectiveness of the strategies. This includes setting performance standards, measuring actual performance, and taking corrective actions if necessary.

evaluation and control

is a continuous process that ensures an organization remains aligned with its goals, adapts to changing environments, and maintains a competitive edge.

strategic management

• collects, processes, and reports financial and accounting data.

• focuses on non-financial data

• used by managers at all levels

• includes analytical reports, dashboards, and forecasts.

management information system

• provides information to managers for effective decisions

• focuses on financial data

• used by accountants and financial managers

• includes financial statements and budget reports

accounting information system

is a plan of action or policy designed to achieve a major or overall aim.

strategy

integrates the organization with its external environment. this means that the structure of the firm must align with external conditions.

strategy

6 firm

resources

capabilities

competencies

experience

knowledge

history

7 environment

politics

economy

community

laws/regulations

culture/tradition

technology

physical

must be flexible to adapt to changes in the environment

strategy and structure

12 internal factors

human resource

financial forecasting

capital resources

vision, mission, and objectives

value system

plans and policies

organizational structure

infrastructure

innovation

marketing resources

tangible and intangible assets

corporate image and brand equity

refers to the process of identifying and defining key goals an organization wants to achieve, while simultaneously examining the internal and external environment to understand the factors that could influence the success of those goals through a comprehensive analysis

strategic objectives and analysis

includes developing a vision and mission, identfying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.

strategy formulation

requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed. Known as the “action stage”.

strategy implementation

is defined as the process of determining the effectiveness of a given strategy in achieving the organizational objectives and taking corrective action wherever required.

strategy evaluation

the ability to make quick decisions when time is short, based on previous experience

intuitive decision style

making decisions in a thorough, systematic manner

analytical decision style

3 advantages of analytical style

• structured and stepwise

• objective

• allows team participation on a level playing field

3 disadvantages of analytical style

• can breakdown in the face of complex, multifaceted matters

• often requires specialist knowledge

• can be vary time- and resource-intensive

2 advantages of intuitive style

• time and resource efficient

• can tackle complex matters

3 disadvantages of intuitive style

• subjective-and open to individual biases

• would normally require broad experience for dependable results

• may require persuasion to convince key stakeholders

4 components that describe the nature of change in the environment

stability

complexity

resource scarcity

uncertainty

• a stable environment is characterized by slow change, allowing managers to respond deliberately.

• a dynamic environment, on the other hand, is marked by rapid change, requiring quick reactions and flexibility

stability: the rate of change

is characterized by slow change, allowing managers to respond deliberately.

stable environment

is marked by rapid change, requiring quick reactions and flexibility

dynamic environment

• refers to the multitude of elements in an organization’s environment and their interconnectedness.

• high complexity makes it challenging for managers to identify, measure, and understand the variables that affect the company.

complexity: the number of environmental elements

occurs when critical resources are in short supply or high demand, making it difficult for companies to acquire what they need to operate or grow.

resource scarcity: the availability of critical resources

it arises from instability, complexity, and resource scarcity, making it challenging for managers to predicts changes in the environment

uncertainty: the predictability of environmental conditions

managers must make decisions based on assumptions rather than clear facts, and companies that adapt correctly can benefit while those that don’t may suffer.

uncertain environments

is based on the belief that organization should continually monitor internal and external events and trends so that timely changes can be made as needed.

strategic management process

is aimed at allowing organization to adapt effectively to change over the long run

strategic management process

• define as anything a firm does especially well compared to a rival firm.

• is a company’s unique strengths and capabilities that allow it to outperform its competitors.

competitive advantages

• allows a company to produce goods or services better or more cheaply that its rivals.

• it’s key component of strategic management.

competitive advantages

2 basic types of competitive advantage

cost advantage

differentiation advantage

PEST stands for

political

economic

social

technological factors

VRIO stands for

value

rarity

inimitability

organization

• are the individuals who are most responsible for the success or failure of an organization.

• helps an organization gather, analyze, and organize information.

strategists

• differ but these differences must be considered in the formulation, implementation and evaluation of strategies.

• differ in their attitudes, values, ethics, willingness to take risk.

strategists

he says, “all strategists have to be chief learning officers”.

Jay Conger

is the anchor point of any strategic plan. It outlines what an organization would like to ultimately achieve and gives purpose to the existence of the organization.

vision statement

is a short statement of reason (purpose) why an organization exists, what its overall goal is, identifying the goal of its operations: what kind of product or service it provides, its primary customers or market.

mission statement

SMART stands for

specific

measurable

achievable

relevant

time-based

• can be defined as specific results that an organization seeks to achieve in pursuing its basic mission.

• are essential for organizational success

objectives

focus attention on quarterly and annual performance improvements to satisfy near-term shareholder expectations.

short-term objectives

• force consideration of what to do now to achieve optimal long-term performance

• stands as barrier to an undue focus on short-term results

long-term objectives

• are political, legal, economical, social, environmental, technological, cultural and competitive trends, events and factors that may benefit or harm an organization in future.

• are beyond the control of a single organization therefore, categorize as external rather than internal.

• things that are going on outside your company, in the larger market.

external oppportunities and threats

• are an organization’s controllable activities that performed especially well or poorly.

• things that you have some control over and can change.

• the integration and standardization of processes, the elimination of inefficiencies.

internal strengths and weaknesses

may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures.

business strategies

are the means or plans of action, master plan or policy designed to achieve a major or overall aim or longterm objectives.

strategies

• set of guidelines or rules governing organizational conduct.

• provide a framework for consistent and fair decision-making.

• include rules, and procedures established to support efforts to achieve stated objectives

policies

Businesses using Strategic Management concepts show significant improvements in sales, profitability and productivity

financial benefits

5 non-financial benefits

• Improved understanding of performance

• Greater awareness of external threats

• Understanding of performance reward relationships

• Better problem-avoidance

• Lesses resistance to change

❖ Besides helping firms avoid financial demise, strategic management offers other intangible benefits, such as an improved understanding of competitors’ strategies,

❖ increased employee productivity

❖Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among managers at all divisional and functional levels.

non-financial benefits

12 reasons (excuses) often given for poor or no strategic planning in a firm are as follows:

➢ Poor reward structures

➢ Firefighting /gaslighting

➢ Waste of time

➢ Too expensive

➢ Laziness

➢ Content with success

➢ Fear of failure

➢ Overconfidence

➢ Prior bad experience

➢ Self-interest

➢ Fear of the unknown

➢ Honest difference of opinion

4 Pitfalls in Strategic Planning

• Using SP to gain control over decisions and resources

• Doing SP only for accreditation

• Failure to communicate the plan to employees

• Failure to involve key employees in all phases of planning

(8) Some pitfalls to watch for and avoid in strategic planning are these:

➢Doing strategic planning only to satisfy regulatory requirements.

➢Too hastily moving from mission development to strategy formulation

➢Failing to communicate the plan to employees, who continue working in the dark.

➢Top manager making many intuitive decisions in conflict with the formal plan.

➢ Top manager not actively supporting the strategic planning process.

➢Failing to use plans as a standard for measuring performance

➢Delegating planning to a planner rather than involving all managers.

➢Failing to create a collaborative climate supportive of change

deals with moral issues arising from activities performed by managers and employees of the corporation.

ethics in business and management

can be defined as principles of conduct within organizations that guide decision making and behavior.

Business ethics

are the individuals primarily responsible for ensuring that high ethical principles are espoused and practiced in an organization.

Strategists

Organization that conduct business operations across national borders are called international firms or multinational corporations.

global competition

refers to a firm investing in international operations

parent company

is the country where that business is conducted.

Host country

6 advantages of globalization

• increased economic growth

• cultural exchange

• expanded job opportunities

• greater competition

• improved technology

• improved access

6 disadvatages of globalization

• increased income inequality

• cultural homogenization

• loss of jobs

• environmental degradation

• loss of sovereignty

• unstable global markets