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1-1
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 1
Basic Concepts
of Strategic
Management
Strategy vs. Technique
• Strategy usually requires some sort of
planning. You'd probably use strategy
when faced with a new situation, ie. the
strategy to win a game.
• Technique is a procedure or skill for
completing a specific task. I'd imagine this
would be used for predictable events, ie.
solving a long division equation.
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Methods vs. Approach
• Method is a way something is done.
Perhaps used for routine tasks.
• An approach is treating something in a
certain way. Experiments must be
approached the same way to repeat
desired results.
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Strategic Management Defined
Set of managerial decisions and actions that determines the long-run performance of a firm.
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Basic Concepts of Strategic Management
4 Phases of Strategic Management
1. Basic financial planning
2. Forecast-based planning
3. Externally-oriented planning
4. Strategic management
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Basic Concepts of Strategic Management
Highly Rated Benefits
• Clearer sense of strategic vision
• Sharper focus on strategic importance
• Improved understanding of changing environment
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Basic Concepts of Strategic Management
Basic Elements of the Strategic
Management Process
1-8
Environmental Scanning Defined
Monitoring, evaluation, and disseminating information from external and internal environments –to key people in the firm
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Basic Concepts of Strategic Management
Environmental
Variables
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Environmental Scanning
SWOT Analysis
• Strengths – Weaknesses
• Opportunities - Threats
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Strategy Formulation
Development of long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses
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Strategy Formulation
Mission Statement
• Purpose/reason for organization
• Promotes shared expectations
• Communicates public image
• Who we are; what we do; what we aspire to
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Organizational Adaptation
Organization “fit” with environment
• Theory of population ecology
• Institution theory
• Strategic choice perspective
• Organizational learning theory
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Organizational Adaptation
Strategic flexibility
• Demands long-term commitment to development of critical resources
• Demands firm become a learning organization
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Learning Organizations
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
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Learning Organizations
4 Chief Activities
• Systematic problem solving
• New approach experimentation
• Learning from experiences
• Intra-organization knowledge transfer
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Basic Concepts of Strategic Management
Hierarchy of
Strategy
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