Gregory G. Dess
G. T. Lumpkin
Marilyn L. Taylor
Strategic Management
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Analysis
•
Strategic goals (vision, mission,
strategic objectives)
•
Internal and external environment of the
firm
•
Strategic decisions
•
What industries should we compete in?
•
How should we compete in those
industries?
•
Actions
•
Allocate necessary resources
•
Design the organization to bring
intended strategies to reality
•
Strategic management is the study of why
some firms outperform others
•
How to compete in order to create
competitive advantages in the marketplace
•
How to create competitive advantages in
the market place
•
Unique and valuable
•
Difficult for competitors to copy or
substitute
Strategic Management Concepts
Definition:
Strategic management consists of the analysis, decisions, and actions an
organization undertakes in order to create and sustain competitive advantages.
Key attributes of strategic management
•
Directs the organization toward overall
goals and objectives.
•
Includes multiple stakeholders in decision
making
•
Needs to incorporate short-term and
long-term perspectives
•
Recognizes trade-offs between efficiency
and effectiveness
Strategic Analysis
•
Starting point in the strategic
management process
•
Precedes effective formulation and implementation
of strategies
•
Clear goals and objectives permit
effective allocation of resources
•
Hierarchy of goals
•
Vision
•
Mission
•
Strategic objectives
•
Managers
•
Scan the environment
•
Analyze competitors
•
General environment
•
Industry environment
•
Frameworks for analyzing a firm’s
internal environment
•
Strengths
•
Weaknesses
•
Analyzing strengths can uncover
potential sources of competitive advantage
•
Intellectual assets are drivers of
•
Competitive advantages
•
Wealth creation
•
Networks and relationships among
•
Employees
•
Customers
•
Suppliers
•
Alliance partners
Strategic Formulation
•
Successful firms develop bases for
competitive advantage
•
Cost leadership
•
Differentiation
•
Focusing on narrow or industry-wide
market segments
•
Sustainability
•
Industry life cycle
•
Firm’s portfolio or group of businesses
•
What business(es) should we be in?
•
How can we create synergies among the
businesses?
•
Diversification
•
Related
•
Unrelated
•
Appropriate entry strategies
•
Sustain competitive advantage in global
markets
•
Digital technologies change the way
business is conducted
•
Added value
•
Impact on performance
•
Digital technologies can enhance
•
Cost leadership
•
Differentiation
Strategic Implementation
•
Informational control
•
Monitor and scan the environment
•
Respond effectively to threats and
opportunities
•
Behavioral control
•
Effective corporate governance
•
Interests of managers and owners of the
firm
•
Organizational structure and design
•
Organizational boundaries
•
Flexible
•
Permeable
•
Strategic Alliances
•
Develop organization that is committed
to
•
Excellence
•
Ethical behavior
•
Learning organization responsive to
•
Rapid and unpredictable change in
today’s competitive environments
•
Corporate entrepreneurship and
innovation
•
New opportunities
•
Enhance
innovative capacity
•
Autonomous entrepreneurial behavior
•
Product champions
•
New ventures and small businesses
•
Major engine of economic growth
•
Recognize viable opportunities
•
Entrepreneurial leadership skills
Corporate Governance and Stakeholder Management
•
Corporate governance: the relationship
among various participants in determining the direction and performance of
corporations
•
Shareholders
•
Management (led by the CEO)
•
Board of directors
•
Board of directors
•
Elected representatives of the owners
•
Ensure interests and motives of management
are aligned with those of the owners
•
Effective and engaged board of directors
•
Shareholder activism
•
Proper managerial rewards and incentives
Stakeholder Management
•
Two views of stakeholder management
•
Zero sum
n Stakeholders
compete for attention and resources of the organization
n Gain
of one is a loss to the other
•
Symbiosis
n Stakeholders
are dependent upon each other
n Mutual
benefits
Social Responsibility
•
Social responsibility: the expectation
that businesses or individuals will strive to improve the overall welfare of
society
•
Managers must take active steps to make
society better
•
Socially responsible behavior changes
over time
•
Triple bottom line
Strategic Management Perspective
•
Integrative view of the organization
•
Assess how functional areas and
activities “fit together” to achieve goals and objectives
•
All managers and employees must take and
integrative, strategic perspective of issues facing the organization
•
Key driving forces increasing the need
for strategic perspective and involvement
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Globalization
•
Technology
•
Intellectual capital
•
These forces are
•
Interrelated
•
Accelerating the rate of change and
uncertainty
Enhancing Employee Involvement
•
\Have significant profit and loss
responsibility
•
Champion and guide ideas
•
Create a learning infrastructure
•
Establish a domain for taking action
•
Have little positional power and formal
authority
•
Generate their power through the
conviction and clarity of their ideas
Coherence in Strategic Direction
Company vision
•
Massively inspiring
•
Overarching
•
Long-term
•
Driven by and evokes passion
•
Fundamental statement of the
organization’s
•
Values
•
Aspiration
•
Goals
Mission statements
•
Purpose of the company
•
Basis of competition and competitive
advantages
•
More specific than vision
•
Focused on the means by which the firm
will compete
Strategic objectives
•
Operationalize the mission statement
•
Provide guidance on how the organization
can fulfill or move toward the “higher goals”
•
More specific
•
Cover a more well-defined time frame
•
Measurable
•
Specific
•
Appropriate
•
Realistic
•
Timely
•
Challenging
•
Resolve conflicts that arise
•
Yardstick for rewards and incentives
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