Strategic Management Chapters 1, 4, 5, 7, 6
Exam Study Guide.
Strategic Management - answerA set of managerial decisions and actions that help determine the
long-term performance of an organization
4 phases of strategic management - answer1. Basic Financial Planning
2. Forecast-based planning
...
Managers initiate serious financial planning to propose the following year's budget. Most information
comes from within the firm and the sales force provides the small amount of environmental
information.
Forecast-based Planning - answer✔Horizon time: 3-5 years
To stimulate long-term planning. Gather internal and available environmental data on an ad hoc (as
needed) basis and extrapolate current trends in the future. Lots of meetings and to evaluate proposals
and assumptions.
Externally Oriented (strategic) planning - answer✔Initiating strategic planning to increase
responsiveness to changing markets and competition. Planning is taken out of the hands of lower-level
managers and given to a planning staff. Upper-level managers meet once a year at a retreat to evaluate
and update the current strategic plan.
Top-down planning.
Upper-level management develops the plan with help from consultants and lower-level management
input is minimal.
Strategic Management (phase 4) - answer✔All levels of management are involved. Planning is
interactive across all levels. No more top-down.
This phase details the implementation, evaluation and control issues. These plans emphasize probable
scenarios and contingency strategies. Strategic thinking at all levels
Strategic Management emphasizes ______________ performance. - answer✔Long-term. Many
companies can sustain short bursts, but only a few can sustain it over a long period of time.
3 Most highly rated benefits of strategic management - answer✔1. Clearer sense of strategic vision for
the firm
2. A sharper focus on what's strategically important
3. An improved understanding of a rapidly changing environment
Triple Bottom Line - answer✔Used to describe a business's sustainability.
1. Traditional Profit/Loss
2. People Account-social responsibility
3. Planet Account-environmental responsibility
Basic Model of Strategic Management - answer✔1. Environmental Scanning
2. Strategy Formulation
3. Strategy Implementation
4. Evaluation and Control
Environmental scanning - answer✔monitoring, evaluating and disseminating of information from the
external and internal environments to key people within the corporation. To identify strategic factors
(external and internal) that will assist in the deciding of strategic decisions. Easiest way to do this is
SWOT analysis.
Strategy formulation - answer✔investigation, analysis, decision making to make up the criteria for
attaining a competitive advantage.
1. define the strategy
2. craft the corporation mission
3. specify achievable objectives
4. set policy guidelines
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