Strategic Management Process

Hierarchy of Goals

It posits that goals are aligned top-down, starting from the President → VPs → Managers → Employees; and each level sets goals supporting the higher-level objective.

Policies

These are broad guidelines on employee behavior.

Procedures

These are specific steps to follow in given situations.

Strategic Plan

It matches internal strengths/weaknesses with external opportunities/threats to stay competitive.

Strategy

It is the course of action to achieve long-term goals.

Strategic Management

It includes executing the strategic plan by aligning company capabilities with external demands.

Environmental Scan

It includes the following: (1) Economic, (2) Political, and (3) Competitive Trends.

SWOT

It includes the following: (1) Strengths, (2) Weaknesses, (3) Opportunities, and (4) Threats.

PEST

It includes the following: (1) Political, (2) Economic, (3) Social, and (4) Technological.

Vision Statement

It is future-focused and what the company wants to become.

Mission Statement

It is present-focused and what the company does today.

Corporate Strategy

It focuses on the entire company and how its different business units relate.

Concentration Strategy

Focus on a single product in a single market.

(Local bakery selling only bread.)

Diversification Strategy

Add new product lines/markets.

(Apple developing self-driving cars.)

Vertical Integration Strategy

Expand by producing own inputs or selling directly.

(Apple opening its own stores.)

Consolidation Strategy

Merge or acquire to reduce size, cut costs, expand markets.

(Disney acquiring Marvel and Fox.)

Geographic Expansion

Enter new regional or international markets.

(Jollibee opening stores in the USA and UAE.)

Competitive Strategy

It focuses on how a company competes in a specific industry or market.

Competitive Advantage

It is the unique edge that sets the company apart from its competitors

Cost Leadership

Be the lowest-cost producer.

Differentiation

Offer unique and valued features.

Focus

Target a specific niche market.

Functional Strategy

It details what each department must do to support overall strategy.

Strategic Human Resource Management

It aligns HR policies with company strategic goals by developing the right employee skills and behavior.

Strategy Map

Visual tool that links departmental actions to company goals; and shows employees how their work contributes to overall success (SHRM Tools).

HR Scorecard

Tracks financial and non-financial metrics for HR activities; and helps assess how well HR supports the strategy map (SHRM Tools).

Balanced Scorecard

Measures both hard data (e.g. profit) & soft data (e.g. customer satisfaction); and used to evaluate if activities in the strategy map are successful (SHRM Tools).

Digital Dashboard

Real-time graphs/charts displaying company performance; and pulls data from HR scorecard for instant feedback (SHRM Tools).

HR Metrics

These are quantitative measures of HR activities.

Benchmarking

It is the comparison of HR metrics with high-performing companies.

Strategy-Based Metrics

These are metrics tied to strategic goals.

HR Audit

It is the systematic review of HR policies and practices.

High Performance Work Systems

It is a set of HR policies and practices designed to produce superior employee performance and enhance organizational effectiveness.

Employee Engagement

It is a psychological state where employees are involved, connected, and committed to their work.