external forces determine org success, leader
external control view of leadership has limited influence
ex, technological advancements, economic downturns, war
consists of the analyses, decisions, and actions an organization undertakes in order to
Strategic management
create and sustain competitive advantages.
analysis of strategic goals(vision,mission,strategic objectives) and internal/external
Strategic management : analysis
environments.
How should we compete in order to obtain competitive advantages? (quantity/price vs
quality)
Strategic management :decisions
Which industries to enter?
How can we create competitive advantages that are unique and hard to copy?
performing similar activities better than competitors (business process
Operational effectiveness
reengineering,just in time, benchmarking, outsourcing)
1. Strategic management is directed toward overall organizational goals and objectives
2. Includes multiple stakeholders in decision marking
Four key attributes of strategic management 3. It requires incorporating both short term and long term perspectives(present
operating needs and vision for the future)
4. Involves the recognition of trade offs between effectiveness and efficiency.
effort must be directed at what is best for company as a whole , not just a single
Four key attributes of strategic management:
department.
Strategic management is directed toward
E.g. R&D may have to create a far superior offering but the design may make the
overall organizational goals and objectives
product so expensive that market demand is minimal.
Adequate to accomplish a purpose; producing the intended or expected result.
vs
effectiveness vs efficiency
Performing or functioning in the best possible manner with the least waste of time and
effort.
doing the right thing vs doing things right
the challenge managers face of both aligning resources to take advantage of existing
ambidexterity
product markets and proactively exploring new opportunities.
Strategic management process strategy analysis, formulation, and implementation
strategy in which organizational decisions are determined by only analysis.
strategic decisions are implemented in according to strategic analysis.
intended strategy
-intended strategy rarely survives in its original form due to unforeseen environment
events, unexpected resource restraints, changes in managerial preferences(unrealized).
strategy in which organizational decisions are determined by both analysis and
realized strategy unforeseen events (changes in managerial preferences, unanticipated resource
constraint , unexpected environmental changes).
study of firms' external and internal environments, and their fit with organizational vision
strategy analysis
and goals.
, firm's vision, mission, and strategic objectives form a hierarchy of goals that range from
Analyzing Organizational goals/objectives broad statements of intent for competitive advantage to specific, measurable strategic
objectives
Analyzing the External environment of the Monitor and scan the general environment and industry environment(competitors)
firm
Analyzing the Internal environment of the analyzing strengths and relationships among activities that constitute a firm's value
firm chain can be a means of uncovering potential sources of competitive advantages.
decisions made by the firms regarding investments, commitments, and other aspects of
operations that create and sustain competitive advantage.
strategy formulation
coming up with business level(how to compete in a given business to gain advantage),
corporate level(what businesses should we compete in and how can these businesses
be managed to achieve synergy), and international strategies.
Business level strategy cost leadership/differentiation
addresses a firm's portfolio of businesses.
Corporate level strategy What businesses should we compete in?
How can we manage this portfolio of businesses to create synergies among them?
How to compete and outperform your competitors in a given industry?
strategy formulation: business level strategy
Cost leadership/differentiation/narrow vs industrywide market segment.
actions made by firms that carry out the formulated strategy, including strategic
strategy implementation controls, organizational design(means to coordinate and integrate activities and
stakeholders to accomplish strategy), and leadership.
-continually scan environment and respond to T&O.
strategic controls -proper balance of rewards/incentives/constraints/good cultures
-corporate governance
Organizational design firms must have organizational structures and designs that are consistent with strategy
the relationship among various participants in determining the direction and
performance of the corporations
corporate governance
-primary participants includes shareholders, board of directors, and
management(CEO).
external or internal parties that has a stake and influence on the firm.
stakeholders
-shareholders, employees, customers, suppliers, community at large, etc
-shareholders
Capital market stakeholders - major suppliers of capital (e.g.,
creditors
stakeholder management firm's strategy for recognizing and responding to the interests of all its stakeholders
gain of one group is the loss of another
Stakeholder management :Zero Sum vs vs
Symbiosis
stakeholders must be dependent on each other for the company to succeed(everyone
works together so that everyone benefits).
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