Chapter 5: Strategic management Flashcards
What is strategic management?
Approaches adopted by organizations to ensure successful performance in the marketplace
Competitive strategies
- cost leadership
- differentiation
- market niche
Strategic management and total quality
Total quality relates to strategic management in that it enhances an organization’s ability to gain a sustainable competitive advantage in the marketplace
Core competencies and competitive advantage
Core competencies are things an organization does so well they can be viewed as providing a competitive advantage
Creative thinking in strategic planning
Thinking creatively to eliminate “sacred cows” that work against competitiveness
Components of strategic management
- strategic planning
- strategic execution
- implementing strategies set forth in strategic planning
- monitoring progress toward their achievement (against benchmarks)
- Adjusting plans and strategies as necessary (when not producing desired results)
Strategic planning overview
- SWOT
- develop vision
- develop mission
- develop guiding principles
- develop broad strategic objectives
- develop specific tactics (action plan)
SWOT
strengths, weaknesses, opportunities and threats
vision
An organization’s vision is its guiding force, the dream of what it want to become and its reason for being
Characteristics of a well-crafted vision statement
- easily understand
- sets the tone
- not concerned with numbers
- stirs excitement
- creates a unity of purpose
- challenging yet attainable
- brief yet comprehensive
- lofty yet tangible
Mission
- who are we
- what do we do
- where are we going
Guiding principles
They establish the framework within which an organization will pursue its mission –> summarize value system
Broad strategic objectives
They translate its mission into more specific terms that represent actual targets at which the organization aims
Characteristics of a well-defined broad strategic objective
- broadly stated
- specific enough to be measured
- single issue focus
- directly tied to mission / vision
- in accordance with guiding principles
- show what the organization wants to accomplish
Steps in writing broad strategic objectives
- Assemble input
- find optimum input
- resolve differences
- finalize input
- publish objectives
Cautions concerning broad strategic objectives
- keep them few in number
- keep the language simple
- tie them to mission and vision
- don’t let them be limiting or restrictive
- make them a means to an end not an end themselves
- do not use them in the employee appraisal process
- relate them to all employees
- make them challenging but not impossible
Specific tactics
Tactics are well-defined, finite projects and activities undertaken for the purpose of specific desired outcomes in support of the broad objectives
Characteristics of specific tactics
- specific in nature
- measurable
- can be quantifiable
- can be accomplished within a time frame
- can be assigned
- tied directly to a broad objective
Activities to execute the strategic plan
- Communicate: make sure all stakeholders understand the plan and where they fit into it
- Build capabilities: make sure all stakeholders have the skills needed to carry out their assignments and responsibilities
- Establish strategy-supportive stimuli: reward and recognition incentives
- Eliminate administrative barriers
- Identify advocates and resisters: assign all initial activities to advocates
- Exercise strategic leadership: set a positive example
- Be flexible and improvise
Monitor and adjust as needed
