Course Title: Strategic

Management
Course Instructor : Md. Ruhul Amin
Mollah, MRes (China), MBA, BBA (CU)

Fifth Semester
Course No: EACCT 6519

Department of Accounting & Information Systems

Jagannath University
Dhaka
EMBA

23-09-2016

Jagannath University

Chapter One: The Nature of Strategic Management

CONTENTS

Defining strategic management

1
4

Benefits of Strategic Management

Guidelines for effective strategic

management

Key terms in strategic management

The strategic management model

Defining strategic
strategic management
management
Defining
Strategic

management

can

be

defined

Jagannath University

as

the

art

and

science

of

formulating, implementing, and evaluating cross-functional decisions that

enable an organization to achieve its objectives.
Strategic management is defined as the set of decisions and actions
resulting in the formulation and implementation of strategies designed
to achieve the objectives of the organization(John A. Pearce II and
Richard B. Robinson, Jr.).
These two presidents decided to go on a camping trip to discuss a possible
merger. They hiked deep into the woods. Suddenly, they came upon a grizzly
bear that rose up on its hind legs and snarled. Instantly, the first president took
off his knapsack and got out a pair of jogging shoes. The second president said,
Hey, you cant outrun that bear. The first president responded, Maybe I cant
outrun that bear, but I surely can outrun you!
Chips related example..

KEY TERMS IN STRATEGIC MANAGEMENT

Competiti
ve
Advantage

Jagannath University

Strategic management is all about gaining and

maintaining competitive advantage. This term can be
defined as anything that a firm does especially well
compared to rival firms.

Strategist
s

Strategists are the individuals

who are most responsible for
the success or failure of an
organization. Strategists have
various job titles, such as chief
executive officer, president,
owner, chair of the board,
executive director, chancellor,
dean, or entrepreneur.

Vision

KEY TERMS

An
inspirational
description of what an
organization would like to
achieve or accomplish in
the mid-term or long-term
future. It is intended to
serves as a clear guide
for choosing current and
future courses of action.

KEY TERMS IN STRATEGIC MANAGEMENT

External l opportunities
and threats

External opportunities
and external threats
refer
to
economic,
social,
cultural,
demographic,
environmental,
political,
legal,
governmental,
technological,
and
competitive trends and
events
that
could
significantly benefit or
harm an organization
in the future.

Jagannath University

Internal strengths and

weaknesses

KEY TERMS

Internal
strengths
and
internal weaknesses are
an
organizations
controllable activities that
are performed especially
well or poorly.

KEY TERMS IN STRATEGIC MANAGEMENT

Jagannath University

Strategy

Strategy is the potential

action that requires top
management decisions and
large amounts of the firms
resources.
It
forms
a
comprehensive master plan
that
states
how
the
corporation will achieve its
mission and objectives. A
strategy is a plan of action
designed
to
achieve
a
specific goal or series of
goals
within
an
organizational
framework.
Example: Diversification of
business by launching a new
product.

Mission

KEY
TERMS

Mission
is
a
single
statement which answers
the question- why does the
organization exist for? An
organizations mission is the
purpose or reason for the
organizations existence.

KEY TERMS IN STRATEGIC MANAGEMENT

Jagannath University

Objectives

Policy

Objectives can be defined

as specific results that an
organization
seeks
to
achieve in pursuing its
basic mission.
Example:
Increasing
annual sales by 10 percent

A policy is a broad
guideline for decision
making that links the
formulation
of
a
strategy
with
its
implementation.
Policies
include
guidelines, rules, and
procedures established
to support efforts to
achieve
stated
objectives.
Example: New hires
shall be subject to a
three
month
probationary
period
during
which

Key
Terms

Difference between Mission and Vision

Basis
Meaning

Mission
statement

describes

Vision
that A short statement that
the depicts

company's objectives.
What it is? Cause
Talks
Present
about
Shows

Where

Term
Purpose

present?
Short term
To inform

we

are

the

company's

aspiration for the future.

Effect
Future
at Where we want to be?
Long term
To inspire

Strategic Management Model

Jagannath University

Benefits of Strategic Management

Hebei University

General
1. It allows for identification, prioritization, and exploitation of opportunities.
2. It provides an objective view of management problems.
3. It represents a framework for improved coordination and control of activities.
4. It minimizes the effects of adverse conditions and changes.
5. It allows major decisions to better support established objectives.
6. It allows more effective allocation of time and resources to identified opportunities.
7. It allows fewer resources and less time to be devoted to correcting
erroneous or ad hoc decisions.

8. It creates a framework for internal communication among personnel.

9. It helps integrate the behavior of individuals into a total effort.
10. It provides a basis for clarifying individual responsibilities.
11. It encourages forward thinking.

12. It provides a cooperative, integrated, and enthusiastic approach to tackling

problems and
opportunities.
13. It encourages a favorable attitude toward change.
14. It gives a degree of discipline and formality to the management of a business

Benefits of Strategic Management

Financial
Improvement in sales,
Increased profitability,
Increased productivity

Hebei University

Non-Financial
An enhanced awareness of external
threats,
Improved understanding of
competitors strategies,
Increased employee productivity,
reduced resistance to change and
A clearer understanding of
performancereward relationships.

Guidelines for Effective Strategic Management

Hebei University

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 non-routine.
5. It should vary assignments, team memberships, meeting
formats, and even the planning calendar.
6. It should 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.

10

Guidelines for Effective Strategic Management

Hebei University

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.