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Summary Strategic Management
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Strategic management summary bookPlease look up the tables figures etc as mentioned in this summary.
,Chapter 1:
§ 1.2: What is strategy?
Strategy is a long-term direction of an organization
§ 1.2.1 Defining strategy
Sometimes strategies reflect a series of incremental decisions that only cohere into a recognisable pattern-
or “strategy” after some time
There are 2 advantages to our opening definition of strategy.
1. The long-term direction of an organization can include both deliberate, logical strategy and more
incremental emergent patterns of strategy.
2. Long-term direction can include both strategies that emphasize difference and competition, and
strategies that recognize the roles of cooperation and even imitation.
There are 3 elements of this strategy definition:
1) Longterm: The importance of a long-term perspective on strategy is emphasized by 3 horizons:
The three horizons framework suggests organizations should think of their businesses or
activities of terms or different horizons
Horizon 1: businesses are basically the current core activities
Horizon 2: businesses are emerging activities that should provide new future sources of
profit
Horizon 3:
2) Strategic direction: the direction is set according to long-term objectives. In the private sector
businesses the objective guiding direction is usually maximizing profits for shareholder, however
profits do not always set strategic direction
3) Organization: Organizations typically have many internal and external stakeholders. In strategy
it is always important to look inside organizations and to consider people involved in their
different interests and views. Externally, organizations are surrounded by important relationships
,§ 1.2.2 The purpose of strategy: Mission, vision, values and objectives
The core of a strategist’s job is defining and expressing a clear and motivating purpose for the
organization.
There are four ways in which organizations typically define their purpose:
1. A mission statement aims to provide employees and stakeholders with clarity about what the
organization is fundamentally there to do
2. A vision statement is concerned with the future the organization seeks to create.
3. Statements of corporate values communicate the underlying and enduring core principles that
guide an organization’s strategy and define the way that the organization should operate.
4. Objectives are statements of specific outcomes that are to be achieved
§ 1.2.3: Strategy statements
Strategy statements should have three main themes: the fundamental goals (Mission, vision or objectives)
that the organization seeks. The scope or domain of the organization’s activities; and the particular
advantages or capabilities it has to deliver all of these.
The ability to give a clear strategy statement is a good test of managerial competence in an organization.
As such, strategy statements are relevant to a wide range of organizations.
Organizations of all kinds frequently publish materials relevant to such strategy statements on their
websites or annual reports.
§ 1.2.4: Levels op strategy
Strategies can exist at three main levels:
1. Corporate-level strategy is concerned with the overall scope of an organization and how value is
added to the constituents businesses of the organizational whole.
2. Business-level strategy is about how the individual businesses should compete in their particular
markets.
3. Functional strategies are concerned with how the components of an organization deliver
effectively the corporate- and business level strategies in terms of resources, processes and people
, §1.3 The Exploring Strategy Framework
The Exploring Strategy Framework includes understanding the strategic position of an organization;
assessing strategic choices for the future; and managing strategy in action.
INSERT PICTURE!!
§ 1.3.1: Strategic position
The strategic position is concerned with the impact on strategy of the external environment, the
organization’s strategic resources and capabilities, the organization’s goals and culture.
There are 4 factors central for evaluating future strategy:
1. Strategic purpose
2. Macro-environment
3. Industry and sector
4. Resources and capabilities
5. Stakeholders and culture
§ 1.3.2: Strategic choices
Strategic choices involve the options for strategy in terms of both the directions in which strategy might
move and the methods by which strategy might be pursued.
§ 1.3.3: Strategy in action
Managing strategy in action is about how strategies are formed and how they are implemented. There are
4 issues for strategies in action:
1. Structuring an organization to support successful performance.
2. Systems to control the way which strategy is implemented
3. Leadership as the process for influencing an organization’s efforts towards achieving its aim or
goal
4. Strategic change to align an organization in the pursuit of its strategy.
Exploring strategy framework offers you a comprehensive way for analyzing an organization’s position,
considering alternative choices and selecting and implementing strategies.
Strategy is the long term direction of an organization, formed by choices and actions about its resources
and scope, in order to create advantageous positions relative to competitors and peers in changing
environmental and stakeholder contexts’
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