SMA Flashcards
Organisations should:
- avoid not making choices
- avoid growth for growths sake
- have competent leaders
Core features of SMA
- links to customer accounts info for strategic purposes
- increased use of NFI for performance evaluation
What is SMA?
form of management in which emphasis is placed on information which relates to factors external to the firm, as well as NFI and internally generated info
Lord (1996) Strands
- extension from TMA to include external info about competitors
- relationship between strategic position chosen by firm and expected emphasis on MA
- Gaining competitive advantage through exploring linkages in the value chain.
External info: about competitors
- managers require info that indicates by whom and by how much they are gaining or being beaten.
External info: about markets
- need for market analysis to examine scope for sustainable competitive advantage
To optimise profit need to know:
- what environmental state company is in
- what state it should be in
- is there a need to change strategies and capabilities due to changing environment
Porter (1985) suggests using three generic strategies to gain comp adv
- cost leadership
- differentiation
- focus
- VC analysis
business using defender strategy
use of financial measures for rewarding managers
business following prospector strategy
increase in non-financial measures to determine executive bonuses
business following a build strategy
NFM for determining manager bonuses
repetitive environment
unchanging, consistent, stable
Changing environment
change is slow and incremental deviations from the past
Discontinuous environment
major changes are not familiar
Surpriseful environment
industry ill defined and not fully established
SMA system must contain info that…
- mostly non-financial
- focused on the future
- both internal and external to the firm
- based on realistic projections of the future, not extrapolations of the past
TMA
- historical focus
- single decisions, periods, entities
SMA
- future focused
- emphasis on competitive position over multiple periods
SMA practices: techniques of value creation
- customer profitability analysis
- intellectual capital reporting
- human capital reporting
Strategic management control
- balanced scorecard
- strategy maps
