Republic of the Philippines

State Universities and Colleges

GUIMARAS STATE COLLEGE
San Joaquin Extension
San Joaquin, Iloilo

Subject: Strategic Planning and Management in Education

Name of Professor: Armando E. Gabion Jr. Ph.D.
Reporters: Derlyn T. Montalba
Rhea Z. Hualde
Topic: The Process of Planning
Meaning of Strategic Management
Evolution of Strategic Management
Description of the Strategic Management Process/ Model
Key Terms in Strategic Management
Seventeen Guidelines for the Strategic Planning Process to be Effective

The Strategic Planning Process

Strategic planning is one of the most important responsibilities of the senior management of an
organization. It is the vehicle that senior management should use to set the organizational vision,
determine the strategies required to achieve that vision, make the resource deployment decisions
to achieve the selected strategies, and build alignment to the vision and strategic direction
throughout all levels of the organization. Unfortunately, strategic planning is also one of the most
misunderstood and poorly used tools in many organizations. Strategic plans are often large
documents with detailed plans created arduously over months at great effort...only to gather dust
and languish after they have been duly acknowledged and then filed away. There are several
reasons why strategic plans are not developed properly, or not implemented properly. Among the
most common are:

*Senior management does not follow a defined process to accomplish this task. As a
consequence, months of effort are wasted in creating reams of paper that do not have strategic
import. The process is delegated to a planning group, or assigned to the various functional
leaders to complete for their respective areas. If completed in individual functional areas, the
plan may work for individual departments, but is likely to sub-optimize the whole organization.
If assigned to a planning group, the result is often not truly embraced and endorsed by senior
leadership.

*Senior management does not set aside the time to develop the strategic plan as a collective team
work product.

*The organization does not understand what a strategic plan is actually designed to provide.
Therefore, the strategic plan is a tactical business plan with multiple year extrapolations. There is
very little about it that addresses actual strategic direction.
*Senior management does to follow a defined process or methodology that will result in a
strategic plan in a timely and efficient yet comprehensive manner.

* The plan is developed but there is no process to communicate it throughout the organization
and build organization-wide alignment to its implementation.

*The plan is developed with no implementation guidelines at all. At best, it is implemented in

pieces. At worst, it is unfunded and ignored.

This does not have to become the reality. Strategic plans can be developed in an efficient and
timely manner as long as the senior management team of an organization is committed to
meeting and working together over a period of several months to develop it. The general scope
of work is a series of dedicated sessions for one day each conducted with the senior management
team once a month for 3-5 months. The number of work sessions may vary, depending on the
complexity of the organization and the shifts in the business environment. The process can also
be conducted in a series of half day sessions once every two weeks. In either case, once the
process has begun it must be applied with consistency and dedication by the senior team...as a
team. In addition, members of the senor team should be prepared to spend an amount of time
equal to the length of each session for follow-up work from each session. Members of their
individual organizations may be required to provide some staff input as well.

Strategic Management – Definition

Art & science of formulating, implementing, and evaluating, cross-functional decisions that
enable an organization to achieve its objectives.

In essence, the strategic plan is a company’s game plan.

Note : Strategic management (SM) is used exchangeable with strategic planning
The purpose of SM is to exploit and create new and different opportunity for tomorrow

SM characteristics

It is not a reaction to short – term changes -------while it is a response to long –term perspectives
(5-10 year or more )

It is not a quantitative exercise-------- but it is a qualitative in nature and reflects a realistic

imagination of how the future looks.

It is not a normative statement of where the firm would like to be in the future --------while it is
a road map which describes the steps the firm should undertake to get there finally it is a set of
practical ,well thought–out perspectives and actions on how to deal with uncertainties of the
future.
 Strategic Management

Strategic management achieves a firm’s success through integration:

Evolution of Strategic Management

In late 500, Sun Tzu authored a book called The Art of War, which contains 13 chapters that
focus on military strategies and tactics. According to Sun Tzu, the positioning of an army was
important and while doing so one should take into account the physical environment and
subjective beliefs of one's opponents on the field. He emphasized the importance of responding
quickly to the environment in order to appropriately meet changing conditions. In a static
environment, planning works successfully, but in a dynamic and changing environment plans
rarely work.

Strategic management slowly blossomed into a distinct and important discipline over a five-
decade period. During the 1950s it was in the embryonic stage, where the focus of the top
management team was on budgetary planning and controls and key concepts revolved around
financial control. To achieve control over the budgeting, management made use of accounting
tools such as capital budgeting and financial planning. At this time companies achieved
competitive advantage through coordination and control of budgetary systems. During the 1960s
through 1970s, management teams started focusing on corporate planning. Most companies
initiated corporate planning departments to plan for growth and diversification and used
forecasting as the primary tool to visualize growth. Companies embarking on growth attempted
to seek opportunities for diversification. By the 1970s, strategic management started evolving on
a more serious note, extending beyond the budgetary planning and control, and corporate
planning, to include positioning companies in relation to competitors.

Corporations tried to jockey for power and focused on selecting particular market segments and
positioning for leadership. During this period, companies analyzed industry to determine
attractiveness in terms of entry barriers, available suppliers, and potential buyers. Companies
attempted to diversify and expand through entry into the global arena during this period. To align
structure with strategy, companies started slowly moving toward hybrid and matrix structures.
By the late 1980s through 1990s, the growth of strategic management as a separate discipline
started taking its own shape. This can be seen in terms of companies attempting to secure
competitive advantage. The key concepts of the companies concerned the sources of sustained
competitive advantage (i.e., ways and means of gaining success over potential rivals).
In the early stages of development, strategic management concepts revolved around
microeconomics. As the theory of firm addresses the question of why firms exist and what
determines their scale and scope,1 other theories also revolved around this basic theme. The
initial answer was in terms of the neoclassical theory of perfect competition that considers the
firm as a combiner of inputs to produce desired outputs. Firms aim at achieving the least among
the cost combinations of inputs in the production process, equating the marginal cost to the
marginal revenue to determine the level of output that maximizes profit. The inherent and highly
restrictive assumptions are that resources are perfectly mobile and the buyers and sellers have all
necessary information. Most importantly, firms are small in size and produce single products,
and hence all firms are assumed to be identical. The firm's size is determined by technological
and managerial factors.

Gradually, researchers realized that these highly restrictive assumptions may not be applicable in
real life. Some degree of monopoly power exists in industry. The firms that have monopoly
power are capable of restraining output to maximize their profits. When power gets diluted,
which can be seen in terms of low industry concentration, firms compete for market share and
engage in different strategies depending on the context and purpose. The industry structure
(called structure) as determined by the number

Table 2.1. The Evolution of Strategic Management

of buyers and sellers, entry barriers, product differentiation, and proportion of fixed to variable
costs sets the tone for the strategy (called conduct), which may be seen in advertisement wars
and price wars between firms. Performance is a close combination of these forces' structure
conduct. Therefore, subsequent scholars (e.g., Bain 1954) in strategic management focused on
examining the structure-conduct-performance relationship.

The first and foremost scholar who brought recognition to strategic management as a separate
discipline was Chandler after he wrote the book titled Strategy and Structure in 1962. Chandler
explained how giant corporations (such as General Motors, Standard Oil, and DuPont) have
grown over the years in such a way that senior managers had to direct their energies to make
long-term decisions and move away from daily routine decisions. He was the first to label a
formal term—strategy—for these long-term plans. The term actually was derived from the Greek
word strategies (which means "art of the general").

Stages of Strategic Management

The SM process consists of three main stages

• Strategy formulation

• Strategy implementation

• Strategy evaluation
Strategic Management process step:1

Strategic Management process step :2

Strategic management process step:3

 Prime Task of Strategic Management
“Think through the overall mission of a business. Ask the key question: What is our
Business?”
Peter Drucker

Integrating Intuition & Analysis

The strategic management process attempts to organize quantitative and qualitative
information under conditions of uncertainty.

Intuition is based on:

Past experiences
Judgment
Feelings

Intuition is useful for decision making in:

• Conditions of great uncertainty
• Conditions with little precedent

• Note:_

In the Arab world, there is a cultural tendency to emphasize on the role of intuition and
imagination in decision making.

There are many companies which, because of luck and Abundant opportunities, have
experienced great growth but only for a short time .
 Strategic Management Model (Cont’d)

1. Identify Existing:
• Vision
• Mission
• Objectives
• Strategies
2. Audit external environment
3. Audit internal environment
4. Competing in the global market-place
5. Establish long-term objectives
6. Generate, evaluate, and select strategies
7. Implement selected strategies
8. Leadership and culture
9. Measure & evaluate performance
 Key Terms in Strategic Management

 Competitive advantages

 Strategists

 Vision & mission

 External opportunity & threats

 Internal strengths & weaknesses

 Long – term objectives

 Strategies

 Annual (short- term)objectives

 Polices

SM :key term (1)

Competitive Advantage:

Anything that a firm does especially well, compared to rival firms

Organizations is said to have a SCA when it is:-

1. Adapting to change in external trends, internal capabilities, and resources

2. Effectively formulating, implementing, and evaluating strategies

S.M. Key Term (2)

The Strategists – Those that affect a firm’s success or failure:
• Chief Executive Officer (CEO)
• Chief Strategy Officer (CSO)
• President
• Owner
• Board Chair
• Executive Director

S.M. Key Term (3)

Vision Statement:

What do we want to become?

Mission Statement:

What is our business?

S.M. Key Term (4)

Opportunities and Threats (External analysis)

External opportunities and threats are largely out of the control of a single organization.

Opportunities and Threats (External) Cont’d…

Analysis of Trends:

• Economic
• Social
• Cultural
• Demographic/Environmental
• Political, Legal, Governmental
• Technological
• Competitors

The basic tenet of strategic management:

 S.M. key term (5)
Strengths and Weaknesses (Internal analysis)
Strengths & Weaknesses (Internal):
Controllable activities performed especially well or poorly

Strengths and Weaknesses (Internal) Cont’d…

Strengths and weaknesses are typically located in the functional areas of the firm, such as:
• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Computer Information Systems

Assessing the Internal Environment

Long Term Objectives

Long-term Objectives:
Mission-driven pursuit of specified results more than one year out

S.M. key term (6)

Long Term Objectives (Cont’d)

Long term objectives are essential for ensuring a firm’s success. They:

• Provide direction
• Help with evaluation
• Create synergy
• Focus coordination
• Basis for planning, motivating,
and controlling

S.M. key term (7)

Strategies

Strategies:
The means by which long-term
objectives are achieved

Strategies (Cont’d)
Some examples of different strategies are:
• Geographic expansion
• Diversification
• Acquisition
• Market penetration
• Retrenchment
• Liquidation
• Joint venture

S.M. Key Terms (8)

Annual Objectives:
Short-term achievements that firms must recognize to attain long-term objectives

Key Terms (9)

Policies:
Means by which annual objectives will be achieved

Benefits of Strategic Management

Strategic benefits :

• Is proactive in shaping firm’s future

• Initiates and influences firm’s activities
• Helps to formulate better strategies that are systematic, logical, and rational

Benefits of Strategic Management

 Financial Benefits

• Improvement in sales

• Improvement in profitability

• Productivity improvement

Benefits of Strategic Management

Nonfinancial Benefits

• Improved understanding of competitors’ strategies

• Enhanced awareness of threats
• Increased employee productivity
• Reduced resistance to change
• Enhanced problem-prevention capabilities
According to Gordon Greenley of Aston Business school in the united Kingdom S.M.
offers the following benefits :-

1. It allows for identification of opportunities

2. It provides an objective view of management problems
3. It represents a framework for improved coordination & control of activities
4. It minimizes the negative effects of conditions & changes
5. It allows major decisions to better support established objectives
6. It allows more effective allocation of time and resources
7. It reduces resources and time to be spent in correcting erroneous decisions
8. It creates a framework for internal communication among personnel
9. it provides a basis for clarifying individual responsibilities
10. It encourages forward thinking
11. It provides a cooperative approach to tackling problems and opportunities
12. It encourages a favorable attitude toward change
13. It gives a discipline to the management of business

Seventeen Guidelines for the Strategic-Planning Process to Be Effective

1. It should be a people process more than a paper process.

2. It should be a learning process for all managers and employees.
3. It should be words supported by numbers rather than numbers supported by words.
4. It should be simple and nonroutine.
5. It should vary assignments, team memberships, meeting formats, and even the planning
calendar.
6. It should be challenge the assumptions underlying the current corporate strategy.
7. It should welcome bad news.
8. It should welcome open- mindness and a spirit of inquiry and learning.
9. It should not be a bureaucratic mechanism.
10. It should not become ritualistic, stilted, or orchestrated.
11. It should not be too formal, predictable, or rigid.
12. It should not contain jargon or arcane planning language.
13. It should not be a formal system for control.
14. It should not disregard qualitative information.
15. It should not be controlled by “technicians”.
16. Do not pursue too many strategies at once.
17. Continually strengthen the “good ethics is good business” policy.

References:

David, Fred R. (199). Strategic Management

Concepts, 7th Edition. Upper Saddle River.

David, Fred R. Strategic Management

Concepts and Cases: A Comparative
Approach, 14th Edition

Hitt, M.A., Steward, B.J., Porter, W., Lyman. (2009. )

Management 2nd Edition