Module: Strategic Management

Strategic Management : Overview

Strategy
Origin: 168090; < Gk stratga generalship, equiv. to stratg(s) military commander, general (strat(s) army + -gos n. deriv. of gein to lead)

Dictionary.com

The Strategic Management Process

Bateman, 135

Opportunity: As Supply Demand Gap

Show me the money!
Service Superior Offering Trust Value for Cost

Customer Needs/ Demands

Current Unmet Emerging

Quality

Ethics

Speed

Innovation

Availability

The Lord of the Rings

Accounting & Finance

General Management

Government

Legal Office
Marketing Research

Key Stakeholders
Marketing

Suppliers

Service

Administration

Distribution

Target Market Segments: Customers

Product Development

HRD/HRM/ Corporate Culture

Sales

Supply Chain Management

Production

Quality Management Distributors Ethics Office

Corporate IT

Competitors

What business are we in? What is our business?

What do we stand for? How should we behave?

Can we manage ourselves as a group?

Strategic Thinking

Edgar Schein on Organizations

Two Survival Problems
External Adaptation
An organization cannot survive if it fails to successfully adapt to its environment.

Organization Survival
Internal Integration
An organization cannot survive if it cannot manage itself as a group.

Edgar Schein, Coming to a New Awareness of Organizational

Culture, Sloan Management Review Winter 1984, pp. 3-15

What business are we in? What is our business?

What is the economic logic of our business? What business model do we choose?

External Adaptation

The Internal Environment

Accounting & Finance

General Management

Legal Office
Marketing Research

Service

Marketing

Administration

Distribution

Business Model: Revenue & Profit Streams

Product Development

HRD/HRM/ Corporate Culture

Sales

Supply Chain Management

Production

Quality Management Ethics Office

Corporate IT

Can we manage ourselves as a group?

Internal Integration

Corporate Culture

Corporate Culture Shared key values and beliefs of an organization

A source of sense of identity for its members Generates commitment to something larger than the self Enhances social system stability Guides and shapes behavior A source of competitive advantage

Linda Smircich, Concepts of Culture and Organizational Analysis, Administrative Science Quarterly, 28 (1983), p.345

What do we stand for? How should we behave?

External Adaptation

The Nature of a Business Corporation

A Business-Economic Organization

A Member of Society, A Social Institution

What is our value to Society?

Kenneth E. Boulding on Survival of the Business Institution

The survival of the business institution will depend much more on its ability to retain legitimacy than on the internal dynamics of the market environment itself.

American economist Educator, Univesrity of Michigan University of Colorado

Kenneth E. Boulding, The Legitimacy of the Business Institution, E. M. Epstein and D. Votaw, Rationality, Legitimacy, Responsibility: Search for New Directions in Business and Society (1975), p. 87

Talcott Parsons on Social Legitimacy

Legitimation is the process whereby an organization justifies to a peer or subordinate system its right to exist

American sociologist Educator, Harvard University

E. M. Epstein and D. Votaw, Rationality, Legitimacy, Responsibility: Search for New Directions in Business and Society, pp.72-73

Charles Perrow on Social Legitimacy

The issue of legitimacy in economic organizations is closely involved with good corporate citizenship or responsible professional management.

American sociological theorist Educator: Emeritus , Yale

Charles Perrow, Organizational Analysis: A Sociological View (1970), p. 100

Archie Carrolls CSR Pyramid (1979)

Be a good corporate citizen
Philanthropic Responsibilities

Contribute resources to the community; improve quality of life

Be ethical

Ethical Responsibilities

Obligations to do what is right, just and fair. Avoid harm.

Law is societys codification Of right and wrong. Play by the rules of the game. The foundation on which all others rest

Obey the law

Legal Responsibilities

Be profitable

Economic Responsibilities

A.B. Carroll, The Pyramid of Corporate Social Responsibility, Business Horizons, July-August 199

Freemans Enterprise Strategy: What A Firm Stands For

Social Responsibility Philosophy Leadership Philosophy

External Stakeholders Philosophy

Enterprise Strategy

Internal Stakeholders Philosophy

Social Contribution Statement Public Relations Policy

Ethical Codes of Conduct

Mission-Vision-Values

Values: What we stand for/ What we believe in/ How we will behave Mission: Why we exist/ What our common purpose is/ why we are allowed to exist

Vision: What we want to become/ What long-term success looks like

We define our market/social relevance and strategic direction

Survival: External Adaptation

Organizational Survival
External Adaptation

External Adaptation
Mission Vision Values

External Environment-Strategy Fit

Marketing Strategy: Product-Market-Customer Management Total Quality Management Enterprise Strategy: Corporate Governance-CSR-Code of Conduct

Survival: Internal Integration

Organizational Survival

Internal Integration

Internal Integration

Mission

Vision
Strategy Internal Environment Fit

Values

Business Model

Corporate Culture

Key Processes

Strategy & Business Model

Strategy

How we will succeed in our mission How we will succeed in attaining our vision How we will generate steadily growing revenues How we will generate attractive profits and ROI

Business Model

How We Will Succeed

Corporate Culture Business Model

Mission

BSC Strategy Map

Key Processes

Values

Vision

Marketing Strategy Enterprise Strategy

Internal Integration

Mission-Vision-Values
Planning

External Adaptation

Monitoring, Controlling, Improving

Organizing & Developing

Leading & Motivating

Strategic Management
Strategic Plan

Mission Vision & Values Goals Strategy &Objectives Initiatives Measures O1 AI2 AI3

Why we exist

Action Plans Evaluate Progress

What we want to be/What we believe What we must achieve to be successful O2

Specific outcomes expressed in measurable terms (NOT activities) Planned Actions to Achieve Objectives Indicators and Monitors of success Desired level of performance and timelines

AI1

M1 M2
T1 T1

M3
T1

Targets

Matt H. Evans, Strategic Planning Model ppt, http://www.exinfm.com/workshop_files/strategic_planning_model.ppt

Strategic Thinking: Core Frameworks & Analytical Tools

Strategic Direction Mission Vision Values

Business Scorecard

SWOT Analysis

Budget

Updated Mission Statement

Key Processes

Strategic Thinking: Elements & Outputs

Strategies & Objectives

Culture

Business Model

Organization Structure

BSC Strategy Map

Strategic Direction

Mission Vision Values

SWOT Analysis

External Analysis Internal Analysis SWOT

Updated Mission Statement

Key Factors For Success Competitive Strengths Strategic Issues

If needed Corporate level SBU level Operational level

Business Model

Strategy

Economic logic of the business

BSC Strategy Map

Strategy communication Chain of command, accountability Division of labor Communication

Culture

Organization Structure

External Adaptation & Internal Integration

Values-driven internal integration

Key Processes

Right systems & procedures

Budget

Strategic Control
Business Scorecard

How We Will Succeed

Corporate Culture Business Model

Mission

BSC Strategy Map

Key Processes

Values

Vision

Marketing Strategy Enterprise Strategy

Internal Integration

Mission-Vision-Values
Planning

External Adaptation

Monitoring, Controlling, Improving

Organizing & Developing

Leading & Motivating

M-V-V Statements

Drucker Davidson Freeman Selznick Caux Round Table Schein PEST/PESTEL SWOT Industry Attractiveness Analysis Industry Life Cycle
Updated Mission Statement

Drucker
Strategy & Objectives

Strategic Groups Clustering Porter Five Forces Model Stakeholder Analysis Product Market Life Cycle Market Structure Analysis Consumer Analysis

BCG Matrix Ansoff Matrix Directional Policy Matrix (DPM) Value Chain: Porter Performance Gap Analysis Resource Based View

Corporate level: Freeman. Davidson SBU Level Operational level: Kotler, Deming
Business Model

Business Model Canvass

BSC Strategy Map

Kaplan and Norton

Organization Structure

Chandler Schein Selznick

Key Processes

Culture

Strategic Thinking: Frameworks & Tools

Budget

Business Scorecard

Mission Vision-Values

SWOT Analysis

Updated Mission Statement

Corporate Strategy & Objectives

SBU Strategy & Objectives

Operational Strategies & Objectives

External Environment

If needed

Business Portfolio Strategy

Product Market Portfolio Strategy

Operational Strategies

Internal Environment

Corporate Business Model

Business Model(s)

Operational Model(s)

Key factors for Success (KFS)

Enterprise Strategy

SBU Structure

Dept./Unit Structure

Key Issues

Corporate Culture Strategy

SBU BSC Strategy Map & Balanced Scorecard

Strategy Map & Balanced Scorecard

Strategic Responses

Corporate Structure

SBU Budget

Operational Budgets

Corporate BSC Strategy Map & Balanced Scorecard

Corporate Budget

The Strategic Management Process

Strategy

References
Robert Kreitner, Management Principles Philippine Edition 2009, South-Western Stephen P. Robbins and Mary Coultier, Management 8th edition, Pearson Prentice Hall Gareth R. Jones, Jennifer M. George, and Charles W. L. Hill, Contemporary Management 2nd edition, Irwin McGraw-Hill Thomas S. Bateman and Scott A. Snell, Management 9th edition, McGraw-Hill Irwin Thompson, Arthur A., A. J. Strickland III, and John E. Gamble. Crafting and Executing Strategy: Text and Readings 17th Edition. International Ed. Philippines: McGraw-Hill Irwin, 2010. Print.

Thank you!