Chapter 5: Strategic management

Question 1

What is strategic management?

Answer 1

Approaches adopted by organizations to ensure successful performance in the marketplace

Question 2

Competitive strategies

Answer 2

• cost leadership
• differentiation
• market niche

Question 3

Strategic management and total quality

Answer 3

Total quality relates to strategic management in that it enhances an organization’s ability to gain a sustainable competitive advantage in the marketplace

Question 4

Core competencies and competitive advantage

Answer 4

Core competencies are things an organization does so well they can be viewed as providing a competitive advantage

Question 5

Creative thinking in strategic planning

Answer 5

Thinking creatively to eliminate “sacred cows” that work against competitiveness

Question 6

Components of strategic management

Answer 6

1. strategic planning
2. 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)

Question 7

Strategic planning overview

Answer 7

1. SWOT
2. develop vision
3. develop mission
4. develop guiding principles
5. develop broad strategic objectives
6. develop specific tactics (action plan)

Question 8

SWOT

Answer 8

strengths, weaknesses, opportunities and threats

Question 9

vision

Answer 9

An organization’s vision is its guiding force, the dream of what it want to become and its reason for being

Question 10

Characteristics of a well-crafted vision statement

Answer 10

• 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

Question 11

Mission

Answer 11

• who are we
• what do we do
• where are we going

Question 12

Guiding principles

Answer 12

They establish the framework within which an organization will pursue its mission –> summarize value system

Question 13

Broad strategic objectives

Answer 13

They translate its mission into more specific terms that represent actual targets at which the organization aims

Question 14

Characteristics of a well-defined broad strategic objective

Answer 14

1. broadly stated
2. specific enough to be measured
3. single issue focus
4. directly tied to mission / vision
5. in accordance with guiding principles
6. show what the organization wants to accomplish

Question 15

Steps in writing broad strategic objectives

Answer 15

1. Assemble input
2. find optimum input
3. resolve differences
4. finalize input
5. publish objectives

Question 16

Cautions concerning broad strategic objectives

Answer 16

1. keep them few in number
2. keep the language simple
3. tie them to mission and vision
4. don’t let them be limiting or restrictive
5. make them a means to an end not an end themselves
6. do not use them in the employee appraisal process
7. relate them to all employees
8. make them challenging but not impossible

Question 17

Specific tactics

Answer 17

Tactics are well-defined, finite projects and activities undertaken for the purpose of specific desired outcomes in support of the broad objectives

Question 18

Characteristics of specific tactics

Answer 18

1. specific in nature
2. measurable
3. can be quantifiable
4. can be accomplished within a time frame
5. can be assigned
6. tied directly to a broad objective

Question 19

Activities to execute the strategic plan

Answer 19

1. Communicate: make sure all stakeholders understand the plan and where they fit into it
2. Build capabilities: make sure all stakeholders have the skills needed to carry out their assignments and responsibilities
3. Establish strategy-supportive stimuli: reward and recognition incentives
4. Eliminate administrative barriers
5. Identify advocates and resisters: assign all initial activities to advocates
6. Exercise strategic leadership: set a positive example
7. Be flexible and improvise
   Monitor and adjust as needed