Extra chapter Flashcards
Strategic management
What does Strategic management do?
1.Considers organization’s environment to identify opportunities and threats as well as internal strengths and weakness.
2.Provides direction and intent to organization
3.Identifies ways of creating value for stakeholders
4.Provides a system for coordinating management activities
5.Understanding internal and external environments is key to organization planning-can adapt to changes
Overall purpose of strategic management
Overall purpose is to ensure consistency in the management of the organization
Highest level
Corporate-level strategy is concerned with managing the multi-business corporation and is the domain of the corporate board of directors
Next level
Seek sources of sustainable competitive advantage. Provides the framework for functional managers to develop and implement functional strategies.
Lowest level
It is the responsibility of supervisors or first-line management to manage from day to day in line with the overall strategic direction of the organization
External consistency
Consistent with the opportunities and threats presented by the external environment
Dynamic consistency
Consistent with the core and distinctive capabilities of the organisation
Internal consistency
Policies and procedures have to be aligned with the chosen strategic direction of the organisation
Good strategic management process leads to three outcomes
1.Optimizes consistency between different levels of management
2.Optimizes consistency between the organization and internal and external environments
3.Leads to sustained performance higher than the industry norm.
Strategic management process
1.Strategic direction
2.Strategic objectives
3.External environment
4.Internal analysis
5.Strategic choice
6.Strategy implementation
7.Strategy control
Strategic direction and objectives(in terms of vision)
1.Should serve as inspiration to stakeholders
2.Should be short enough to remember
3.Should be closely identified with the organisation
4.Contains an indication of the future direction of the organisation
External environmental analysis
1.Identify opportunities and threats
2.Opportunities allow the organization to meet or exceed strategic objectives
3.Threats constrain the ability of the organization to meet objectives
4.Threats may threaten the existence of an organization
Internal analysis
1.Discover what an organization is better at than its competitors
2.Uncover key weaknesses that could prevent the organization from attaining objectives or make it vulnerable to its competition
3.Roles of resources and core capabilities has become increasingly important
4.Approach suggests organizations can be successful by exploiting their assets and capabilities
Strategic choice
Differentiation strategies
Cost leadership strategies
Focus strategies
Differentiation strategies
Competitive advantage stems from higher prices that customers are willing to pay for perceived quality of product
Cost leadership strategies
Competitive advantage stems from its ability to produce products and services at lower production costs than competitors
Focus Strategies
Organization attempts to gain dominance in narrow segment of the market through differentiation or cost leadership
Strategy implementation
Alignment of business and functional strategies
Leadership and culture:
Routines, rituals, stories, symbols, power structures, control systems, organization structure, Paradigm
Creation of technology systems and organizational processes to support the strategy:
Competencies, technology and processes
Strategic control
1.Forward looking as well as backward looking
2.Have internal and external focus
3.Be able to manage by exception
4.Be actionable
5.Be systematic
Aspects of strategic control
Competitive intelligence
1.Human intelligence
2.Customers
Business intelligence systems(BIS)
1.Online analytical processing(allows users to compare data based on a criteria)
2.Data mining(designed to explore data in search of consistent patterns)
3.Executive ISs(operational data presented in the form of charts and tables)
4.Strategy alignment(refers to the alignment of business-unit functions with the functions of info for effective use of info)
Integrating mechanisms(role is to ensure that all available data is integrated, analyzed, and presented to management decision-makers in such a way that it supports the decision-making process)
1.CI officers or analysts
2.Processes like scenario analysis and planning
3.Technology
Strategic direction and objectives(in terms of mission)
Current focus and long-term purpose of the organization
provides mechanism to ensure internal consistency
Objectives should not only be financial, should follow SMART
Alignment of business and functional strategies
Ensuring that functional strategies support the business level strategy directly or indirectly
Leadership and culture
The leaders of the organization play a critical role in ensuring that the culture of the organization is aligned with the strategic direction
Competencies ,technology and processes
Individuals have the right competencies, different technologies can play a role in the strategy implementation, production and information and communication strategies, all integrated in processes to deliver
