8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 1/23

© Prentice Hall, 2002 End Show 1 - 1

Strategic Management in Action

Introducing the Concepts

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 2/23

© Prentice Hall, 2002 End Show 1 - 2

Learning Objectives

1. Discuss why strategic management is important.

2. Define strategy and strategic management.

3. Describe the strategic management process.

4. Describe the three levels of organizational strategies.

5. Explain the historical evolution of strategic management.

6. Rebut misconceptions about strategy and strategic

management.

7. Explain who’s involved with strategic management and their 

role in managing strategically.

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 3/23

© Prentice Hall, 2002 End Show 1 - 3

WHY IS STRATEGIC M ANAGEMENT IMPORTANT?

Strategic Management

• 

• 

• 

• 

Gives everyone a role

Makes a difference in performance levels

Provides systematic approach to uncertainties

Coordinates and focuses employees

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 4/23

© Prentice Hall, 2002 End Show 1 - 4

WHAT IS STRATEGIC M ANAGEMENT?

Strategy 

vs.

Strategic Management

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 5/23

© Prentice Hall, 2002 End Show 1 - 5

The Basics of  Strategy & Strategic Management

 Definition of Strategy 

•  A series of goal-directed decisions and actions

matching an organization's skills and resources

with the opportunities and threats in its environment 

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 6/23

© Prentice Hall, 2002 End Show 1 - 6

The Basics of  Strategy & Strategic Management

Strategy Involves:

• 

• 

• 

•

 

• 

Organization’s goals 

Goal-directed action

Related decisions and actions

Internal strengths

External opportunities and threats

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 7/23© Prentice Hall, 2002 End Show 1 - 7

The Basics of  Strategy & Strategic Management

 Definition of Strategic Management 

Decisions and actions where organizations

• 

• 

•

 

• 

Analyze current situation

Develop appropriate strategies

Put strategies into action

Evaluate, modify, or change strategies

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 8/23© Prentice Hall, 2002 End Show 1 - 8

The Basics of  Strategy & Strategic Management

Strategic Management entails:

• 

• 

• 

•

 

• 

Basic managerial functions

Planning

Organizing

Implementing

Controlling

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 9/23© Prentice Hall, 2002 End Show 1 - 9

Basic

Activities

of 

Strategic

Management

Figure 1-1

The Basics of  Strategy & Strategic Management

Strategy

Formulation

Strategy

Implementation

Strategy

Evaluation

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 10/23© Prentice Hall, 2002 End Show 1 - 10

The Basics of  Strategy & Strategic Management

Strategic Management“Big picture” view of organization 

influenced by its external environment

Four aspects

that set apart

StrategicManagement

Interdisciplinary

External focus

Internal focus

Future direction

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 11/23© Prentice Hall, 2002 End Show 1 - 11

The Strategic Management Process

AnalyzingCurrentSituation

Decidingon

Strategies

PuttingStrategiesin Action

Evaluating andChangingStrategies 

SituationAnalysis

StrategyFormulation

StrategyImplementation

StrategyEvaluation

Chapter 2 Chapter 3

Chapter 4

External

 Analysis

Internal

 Analysis

Organizational

Context

Chapter 5 Chapter 6

Chapter 7

Functional  Competitive 

Corporate 

Strategic Management in Action Figure 1-2

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 12/23© Prentice Hall, 2002 End Show 1 - 12

The Strategic Management Process

Situation Analysis 

• 

• 

• 

Scanning and evaluating context

External environment

Organizational environment

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 13/23© Prentice Hall, 2002 End Show 1 - 13

The Strategic Management Process

Strategy Formulation 

Three organizational levels

• 

• 

• 

Functional strategies

Competitive strategies

Corporate strategies

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 14/23© Prentice Hall, 2002 End Show 1 - 14

The Strategic Management Process

Strategy Implementation • 

• 

• 

Process of putting strategies into action

Strategy Evaluation 

Process of evaluating: 

How the strategy has been implemented

Outcomes of the strategy

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 15/23© Prentice Hall, 2002 End Show 1 - 15

The Strategic Management Process

Continuing Process of Strategic Management in Action 

Ongoing and continuous cycle of 

• 

• 

• 

Strategy formulation

Strategy implementation

Strategy evaluation

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 16/23© Prentice Hall, 2002 End Show 1 - 16

Looking at Strategic Management’s Past 

 Strategy’s Military Roots 

• 

• 

• 

• 

Battlefield strategies to gain an edge

Exploit weak spots

 Academic Origins of Strategic Management 

Economic theory

Early organizational studies

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 17/23© Prentice Hall, 2002 End Show 1 - 17

Looking at Strategic Management’s Past 

Strategic Planning & Strategic Management Emerge 

• 

• 

• 

Before 1960Not an area of study

During the 1960sStrategy and Structure 

Corporate Strategy 

 Business Policy: Text and Cases 

During the 1970s and 1980sBecomes distinct academic field

Research focus on strategic decisions vs. performance

Mi ti Ab t

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 18/23© Prentice Hall, 2002 End Show 1 - 18

Misconceptions AboutStrategy and Strategic Management

Misconceptions 

• 

•

 

• 

• 

• 

Strategy and strategic planning are dead

Strategy is strictly for top management

Strategy is about planning

Strategy is stable and constant

Strategic management outlines

ultimate destination & route

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 19/23© Prentice Hall, 2002 End Show 1 - 19

WHO’S INVOLVED WITH STRATEGIC M ANAGEMENT?

The Role of the Board of Directors• 

• 

• 

• 

• 

• 

• 

Elected representatives of the company’s stockholders 

Legally obligated to represent and protect stockholder’s interest 

The Role of Top ManagementResponsible for every decision and action of every employee

Providing effective leadership

Other Strategic Managers and Organizational EmployeesImplement — put the strategies into action and monitor performance

Evaluate — do the actual evaluations and take necessary actions

Open book management  

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 20/23© Prentice Hall, 2002 End Show 1 - 20

The Role of the Board of Directors

Table 1-2 Typical Board Responsibilities

• 

• 

• 

• 

• 

• 

• 

• • 

• 

Review and approve strategic goals and plans

Review and approve organization's financial standards and policies

Ensure integrity of organization's financial controls and reporting systems

Approve an organizational philosophy

Monitor organizational performance and regularly review performance results

Select, evaluate, and compensate top-level managers

Develop management succession plans

Review and approve capital allocations and expendituresMonitor relations with shareholders and other key stakeholders

Other responsibilities may be assigned depending on the unique culture and

needs of the organization

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 21/23© Prentice Hall, 2002 End Show 1 - 21

The Role of Top Management

Top Management 

• 

• 

•

 

• 

CEO Chief Executive Officer

COO Chief Operating Officer

CFO Chief Financial Officer 

CIO Chief Information Officer 

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 22/23

© Prentice Hall, 2002 End Show 1 - 22

The Role of Top Management

EffectiveStrategic

Leadership

Exploiting andMaintaining

Core Competencies

DevelopingHuman

Capital

Creating andSustaining Strong

Organizational Culture

EmphasizingEthical Decisions

and Practices

EstablishingAppropriately

Balanced Controls

DeterminingOrganizational

Purpose or Vision

Effective

StrategicLeadership

Involves

Figure 1-5

8/4/2019 ch01ppt760[1]

http://slidepdf.com/reader/full/ch01ppt7601 23/23

1 23

Chapter One

Questions