Management 8e' Robbins and Coulter

1
(No Transcript)
2
Strategic Management

• The set of managerial decisions and actions that
  determines the long-run performance of an
  organization.
• Strategy A detailed
• and organized plan of
• action.

3
Why Strategic Management Is Important

• Studies have shown a positive relationship
  between strategic planning and the improved
  performance of an organization.
• It is the reason why firms succeed or fail.
• It enables managers to cope with the uncertain
  environments.
• It causes managers to examine the changing
  situation in deciding how to proceed.

4
Why Strategic Management Is Important

• It coordinates the work activities of the
  different organizational units.
• It keeps them focused on achieving the
  organizations goals.
• It is involved in many of the decisions that
  managers make.
• Most of the important business events reported in
  the news involve strategic management.

5
Strategic Management Process

• A six-step process.
• Identifying the organizations current mission,
  objectives, and strategies.
• External analysis.
• Internal analysis.
• Formulating strategies.
• Implementing strategies.
• Evaluating results.
• The first four describe the planning that takes
  place, the last two deal with implementation and
  evaluation.

6
The Strategic Management Process
Exhibit 8.1
7
Strategic Management Process

• Step 1 Identifying the organizations current
  mission, objectives, and strategies
• The Mission
• What is the firms reason for being in business.
• What is the scope of its products and/or
  services.
• The Goals and Strategies
• They are the foundation of planning.
• They provide measurable performance targets.
• They give managers a basis for evaluating whether
  goals need to be changed.

8
Components of a Mission Statement

• Customers Who are the organizations customers?
• Products or services What are the
  organizations major products or services?
• Markets Where does the organization compete
  geographically?
• Technology How technologically current is the
  organization?
• Concern for survival growth, and profitability
  Is the organization committed to growth and
  financial stability?
• Philosophy What are the organizations basic
  beliefs, values, aspirations, and ethical
  priorities?
• Self-concept What is the organizations major
  competitive advantage and core competencies?
• Concern for public image How responsive is the
  organization to societal and environmental
  concerns?
• Concern for employees Does the organization
  consider employees a valuable asset?

Exhibit 8.2
Source Based on F. David, Strategic Management,
8th ed. (Upper Saddle River, NJ Prentice Hall,
2001), pp. 6566.
9
Strategic Management Process

• Step 2 Conducting an external analysis.
• Managers need information that might affect the
  organization, e.g. on the competition, government
  legislation, local labor supply, etc
• Managers examine the changes that take place in
  the specific and general environments so they can
  develop appropriate strategies.
• They assess (measure) what they have learned in
  terms of opportunities and threats.

10
Strategic Management Process

• Step 3 Conducting an internal analysis.
• The managers evaluate the organizations
  resources and capabilities to determine its
  strengths and weaknesses.
• Resources Such as capital, technical
  excellence, skilled employees, experienced
  managers.
• Capabilities In performing activities such as
  manufacturing, marketing, engineering, etc..
• Core competencies Capabilities or resources
  that are exceptional or unique The core
  competencies of the organization determine its
  competitive weapons.
• Note Steps 2 and 3 combined are called a SWOT
  analysis. (Strengths, Weaknesses, Opportunities,
  and Threats)

11
Identifying the Organizations Opportunities
Exhibit 8.3
12
Strategic Management Process

• Step 4 Formulating (expressing) strategies.
• Develop and evaluate strategic alternatives
  (choices).
• Select strategies that capitalize (take advantage
  of) on the organizations strengths and exploit
  (use) environmental opportunities.
• Correct weaknesses and develop protection against
  threats.
• This step is considered successful when managers
  have developed strategies that suggest (show) a
  reasonable advantage over competitors.

13
Strategic Management Process

• Step 5 Implementing strategies
• New strategies can only succeed if implemented
  properly.
• Implementation often require hiring new
  employees, transferring or laying off (firing)
  current ones.
• The ability to build and manage effective teams
  is an important part of implementation.
• Top management leadership and motivated middle
  and lower-level managers are necessary
  ingredients (elements or components) in a
  successful strategy.

14
Strategic Management Process

• Step 6 Evaluating Results
• How effective have strategies been?
• What adjustments, if any, are necessary?
• An assessment of the results of previous
  strategies may provide ground (a reason) for
  making changes as needed.

15
C H A P T E R R E V I E W

• The Importance of Strategic Management (Slides
  3,4)
• Discuss what studies of the effectiveness of
  strategic management have shown.
• Explain why strategic management is important.
• The Strategic Management Process (Slides 5,9,10)
• List six steps in the strategic management
  process.
• Describe what managers do when they do external
  and internal analyses.
• Explain the role of resources, capabilities, and
  core competencies in the internal analysis.