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1、PARTIII1.ECTURENOTESCHAPTER1THENATUREOFSTRATEGICMANAGEMENTCHAPTEROUT1.INE WhatisStrategicManagement? KeyTermsinStrategicManagement TheStrategic-ManagementModel BenefitsofStrategicManagenwnt WhySomeFirmsDoNoStrategicPlanning PitfallsinStrategicPlanning GuidelinesforEffectiveStrategicManagement Compar
2、ingBusinessandMilitaryStrategy TheCohesionCase:McDonaIdsCH.PTEROBJECTIVESAfterstudyingthischapter,youshouldbeabletodothefollowing:1. Describethesira(egic-nanagementprocess.2. Explaintheneedforintegratinganalysisandintuitioninstrategicmanage11wnt.3. Defineandgiveexamplesofkeytermsinstrategicmanagemen
3、t.4. Discussthenatureofstrategyformulation,implementation,andevaluationactivities.5. Descril)ethebenefitsofgoodstrategicmanagement.6. DiscusstherelevanceofSunTu,sHieAnofWar(ostrategicmanagement.7. DiscusshowaIlnnmayachievesustainedCOmPCliIiVeadvantage.CHAPTEROVERVIEWChapterIPrOvideSanoverviewofSirat
4、cgicmanagement.Aprac(ical,inlegralivemnnulating,implementing,andevaluatingcixsj-functionalelexisionsthatenableanorganizationtoachieveitsobjectives.1. hete11nstrategicmanagementisusedsynonymouslywithstrategicplanning.2. Thepurposeofstrategicmanagementis10exploitandcreatenewanddifferentOpporiuniiiesIb
5、rtomorrowwhilelong-rangeplanningtriestooptimizefortomorrowthetrendsoftoday.B. StagesofStrategicManagement1. Thestrategic-managemeniprocessconsistsofthreestages.a. Strategyformulationincludesdevelopingavisionandmission,identifyinganorganizationsexternalopportunitiesandthreats,determininginternalstren
6、gthsandweaknesses,establishinglong-termobjectives,generatingaliemaivestrategies,atichoosingpalicularstrategiestopursue.b. Strategyimplementationrequiresafr1110establishannualobjectives,devisepolicies,motivateemployees,andallocateresourcessothatformulatedstrategicscanbeexecuted;strategyimplementation
7、includesdevelopingastrategy-supportiveculture,creatinganeffectiveorganizationalstructure,redirectingmarketingefforts,preparingbudgets,developingandutilizinginlo11nalionsystems,andlinkingemployeeCOinpensalion(oorganizationalperformance.c. Strategyevaluationisthefinalstageinstrategicmanagement.Manager
8、sdesperatelyneedtoknowwhenparticularstrategiesarenotworkingwell;strategyevaluationistheprimarymeans(Orobtainingthisinlb11nalion.VTN(VisitTheNet):Thewebsitem11,.spsu.eduplanassesssrategic.himprovidesanarrativeonstrategyformulationandinlemenationatSouthernPolytechnicStateUniversity,2. Ihreefundamental
9、strategyevaluationactivitiesareprovidedbelow:a.Reviewingexternalandinernalfactorsthatarethebasesforcurrentstrategiesb.Measuringperformancec.Takingcorrectiveaction3Strategyformulation,implementation,andevaluationactivitiesoccuratthreehierarchicallevelsinalargeorganization:coorate.divisional,andfuncti
10、onal.Smallerbusinessesmayonlyhavethecorporateandfunctionallevels.C. IntegralingInluilionandAnalysis1. Thestrategic-managementprocesscanbedescribedasanobjective,logical,systematicapproachformakingmajordecisionsinanorganization.Itattemptstoorganizequalitativeandquantitativeinformationinawaythatallowse
11、Oectivedecisionstobemadeunderconditionsofunceriain(y.2. Mostpeoplerecognizethatintuitionisessentialtomakinggoodst11Hcgicmanagementdecisions.Intuitionisparticularlyusefulformakingdecisionsinsituationsofgreatuncertaintyorlittleprecedent.D. AdaptingtoChange1. Thestrategic-managementprocessisbasedontheb
12、eliefthatorganizationsshouldConiinuallyiwnitorinternalandexternaleventsandtrendssothattimelychangescanbemadeasneeded.Therateandmagnitudeofchangesthataffectorganizationsareincreasingdramatically.2. Byeliminatingboundariesandspeedingtheowofinformahon,c-commerceandglobalizationarctransformingbusinessan
13、dsociety.3. Theneedtoadapttochangeleadsorganizationstokeystrategic-managementquestions,suchas,oWhatkindofbusinessshouldwebecome?”Areweintherightfield?”tiShouldwereshapeourbusiness?”t*Vhatnewcompetitorsareenteringourindustry?TeachingTip:Strategy&Businessisamagazinethatpublishesarticlesthatfocusonstra
14、tegicmanagementissues.Themagazine,whichcontainsexcellentfeaturearticles,isavailableonlineathttp:/www.strategy-TeachingTip:TheBusinessPolicy&StrategyDiViS沁nOftheAcademyofManagementmaintainsawebsitethatcontainsawidevarietyofusefulinformationonstrategicmanagementtopics.TheAcademyofManagementwebsiteisav
15、ailableath(ip:/wvv.aomonline.org/aom.asp.Thewebsitefor(heBusinessPolicyandStrategyDivisionisavailableathtip:/www.bpsdiv.org.VTN(VisitTheNet):Thewebsiteh,hti.csuchico.edn/mgmt/strategy/nuHluleIAldMI.Iuniprovidesanoven,iewofhowfirmsevolveusingstrategicnianagement.VTN(VisitTheNet):Thewebsitecsuhicoxdum
16、gmtsraegynuHluleI/sldO32,htmrevealsthatactualstrategyresultsfromplannedstrategycoupledyvithreactivechanges.II. KEYTERMSINSTRATEGICMANAGEMENTA. CompetitiveAdvantage1. Competitiveadvantageisdefinedasanythingthatafirmdocsespeciallywellcomparedtorivalfirms.2. Firmsshouldseekasustainedcompetitiveadvantag
17、ebycontinuallyadaptingtochangesinexternaltrendsandinternalcapabilitiesandevaluatingstrategiesthatcapitalizeonthosefactors.3. AnincreasingnumberofcompaniesaregainingacompetitiveadvantagebyusingtheInternetfordirectsellingandforComnwnicaiionwithsuppliers,customers,creditors,artners,shareholders,clients
18、,andcompetitorswhomaybedispersedglobally.B. Strategists1. StrategistsareindividualswhoareInaSlresponsiblefor(hesuccessorfailuvofanrganialion.2. Strategistsholdvariousjobtitles,schaschiefexecutiveofficers,president,owner,chairoftheboard,executivedirector,chancellor,dean,orentrepreneur.3. Strategistsh
19、elpanoanizatiogahecanalyze,andorganizeinfb11mtion.TheyIraCkindustryandCQmPeliliVetrends,developRXeCaJUingndekandscenarioanalyses.evaluatecorporateanddivisionalperft11uince,sp()lemergingmarlelopportunities,identifybusinessthreats,anddevelopcreativeactionplans.C. VisionandMissionStatements1. Visionsta
20、tementsanswerthequestion:ifcWhatdowewanttobecome?2. MissionStatcnwntsarcenduringstatementsofpurposethatdistinguishonebusinessfromothersimilarfirms.Amissionstatementidentifiesthescopeofafirmsoperationsinproductandmarketterns.Itaddresseshebasicquestionthatfacesallstrategists:Whatisourbusiness?”hshould
21、includethevaluesandPriOEieSofanorganization.D. ExternalOpportunitiesandThreats1. ExternalOpPOrIUnilieSandexternalthreatsrefertoeconomic,social,cultural,demographic,environmental,political,legal,governmental,technological,andCompclilive(rendsandeventsthatcouldsignificantlybenefitorharmanorganizationi
22、nthefuture.2. Opportunitiesandthreatsarelargelybeyondthecontrolofasingleorganization,thusthetermexternal.3. Tosurviveinaglobaleconomicrecejsiontfi11smustbeawareofIhenewopportunitiesandthreatsthathavesurfacedasaresult.4. Abasictenetofstrategicmanagementisthatfirmsneedtoformulatestrategiestotakeadvant
23、ageofexternalopportunitiesandtoavoidorreducetheimpactofexternalthreats.5. Theprocessofcomiuctingresearchandgatheringandassimilatingexternalinformationiscalledenvironmentalscanningorindustryanalysis.E. InternalStrengthsandWeaknesses1. Inlernalstrengthsandinternalweaknessesareanorganizationscont)llabl
24、eactiviiesthatareperfc)11edespeciallywellorpoorly.2. Identifyingandevaluatingorganizationalstrengthsandweaknessesinthefunctionalareasofabusinessisanessentialstrategic-managementactivity.3. Strengthsandweaknessesareke.III. THESTRATEGlCMANAGEMENTMODE1.A.TlieStrategicManagementMixlelisshowninFigure1-1.
25、1. TheframeworkillustratedinFigureI-Iisawidelyaccepted,comprehensive11iclofthestratcgic-managc11wntprocess.Thismodeldocsnotguaranteesuccess,butitdoesrepresentaclearandpracticalapproachforformulating,implementing,andevaluatingstrategies.2. Theslrategic-managcmeniprocessisdynamicandcontinuous.Achangei
26、nanyoneofthemajorcomponentsinthemreprofitableandsuccessfulIhanthosethatdonot.2. High-performingfirmstendcodosystematicplanningtoprepareforfuturefluctuationsintheexterna)andinternalenvironments.Firmswithplanningsystemsmorecloselyresemblings(rategic-managenenitheorygenerallyexhibitsuperiorlong-termfin
27、ancialperformancerelativetoIheiriluslries.B. NonfinancialBenefits1. Besideshelpingfirmsavoidfinancialdemise,strategicmanagementoffersothertangiblebenefits,suchasanenhancedawarenessofexternalthreats,animprovedunderstandingofconetitors,strengths,increasedemployeeproductivity,reducedresistaretochange,a
28、ndaclearerunderstandingofperformarwe-rcwa11lrelationships.2. Inadditiontoempoweringmanagersandemployees,strategicmanagcnwntoftenbringsorderanddisciplinetoanotherwiseflounderingfirm.3. Cjreenleyslatedthatstrategicnanagenenoffersthesebenefits:a. IlallowsIbridentiIlcation,PrioriliZation,andexploitation
29、ofopportunities.b. Itprovidesanobjectiveviewofmanagementproblems.c. Itrepresentsaframeworkforimprovedcoordinationandcontrolofactivities.d. Itminimizestheeffectsofadverseconditionsandchanges.e. Itallowsmajordecisions(obettersupportestablishedobjectives.f. Ilallowsmoreeffectivealkxrationoflimeandresou
30、rcestoidentifiedopportunities.g. Itallowsfewerresourcesandlesstimetobedevotedtocorrectingerroneousoradhocdecisions.h. hcreatesaframeworkibrinternalcommunicationamongpersonnel.i. IihelpsintegratethebehaviorOfindividualsintoatotaleftbrt.j. ItProVideSabasisforclarifyingindividualresponsibilities.k. Ile
31、ncouragesforwardthinking.l. Itprovidesacooperative,integrated,andenthusiastic叩PrOaChtotacklingproblemsandopportunities.m. Itencouragesafavorableattitudetowardchange.n. ItgivesadegreeOfdisciplineandformalitytothemanagementofabusiness.VTN(ViSillheNet):Thewebsitementargaxojnxtnuplanmdex.htmp11)videsane
32、xcellentnarrativeonthebenefitsofstrategicplanningpitfallsinplanning,andstepsindoingstrategicplanning.V. WHYSOMEHRMSDONOSTRVEG1CP1.ANNINGSomereasonsforpoorornostrategicplanningareasfollows: 1.ackofknowledgeorexperience POOrrewardstructures Firvfighting WasteOfIime Tooexpensive 1.aziness Conteniwithsu
33、ccess Fearoffailure Overconfidence Priorbadexperience Seirinteresi Fearof(heunknown HonestdifferenceofOPiniOn SuspicionrN(VisittheNet):Thewebsitexiniindto()ls.coni/plf(ulpl.htmlgivexreasonsmanyOrfianimtionxavoidstrategicplanning.VI.PITFA1.1.SINSTRATEGICP1.ANNINGSomepitfallsiowatchorandavoidinstrateg
34、icplanningareprovidedbelow: Usingstrategicplanningtogaincontroloverdecisionsandresources DoingstrategicplanningonlytoSatiSfyaccreditationorregulatoryrequirements Toohastilymovingfrommissiondevelopmenttostrategyformulation Failingtocommunicatetheplantoemployees,whocontinueworkinginthedark Topmanagers
35、makingmanyintuitivedecisionsthatconflictwiththeformalplan TOPmanagersnotactivelysupportingthestrategic-planningprocess Failingtouseplansasastandardformeasuringpertb11nance Delegatingplanningtoaplannerratherthaninvolvingallmanagers Failingtoinvolvekeyemployeesinallphasesofplanning Failingtocreateacol
36、laborativeclimatesupportiveofchange Viewingplanningtobeunnecessaryorunimportant Becomingsoengrossedincurrentproblemsthatinsufficientornoplanningisdone BeingsoformalinplanningthatflexibilityandcreativityarcstifledVII. GUIDE1.INESFOREFFECTIVESTRATEGICMANAGEMENTA.Failure(oFollowCertainGuidelinesinPlann
37、ingCanCauseProblems1. Anintegralpartofstrategyevaluationmustbetoevaluatethequalityofthestrategic-managementprocess.IssuessuchasoIsstrategicmanagementinourfirmapeopleprocessorapaperprocess?*shouldbeaddressed.2. Aninp)11antguidelineforeffectivestrategicmanagementisopen-mindedness.Awillingnesstoconsidernewinformation,view
