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Mcgraw-Hill/Irwin © 2003 The Mcgraw-Hill Companies, Inc., All Rights Reserved
Mcgraw-Hill/Irwin © 2003 The Mcgraw-Hill Companies, Inc., All Rights Reserved
McGraw-Hill/Irwin
Chapter Topics
The Nature and Value of Strategic Management
Dimensions of Strategic Decisions Formality in Strategic Management Benefits of Strategic Management Risks of Strategic Management Executives Views of Strategic Management
The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a companys objectives.
McGraw-Hill/Irwin
McGraw-Hill/Irwin
What is Strategy? Large-scale, future-oriented plan for interacting with the competitive environment to achieve objectives Companys game plan Framework for managerial decisions
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McGraw-Hill/Irwin
McGraw-Hill/Irwin
POM/R&D strategies
Marketing strategies
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POM/R&D strategies
Marketing strategies
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Means
(How is to be achieved)
Board of Directors
Corporate Managers
Grand strategy
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Functionallevel decisions
Involve action-oriented operational issues Are relatively short range and low risk Incur only modest costs
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Are less costly, risky, and potentially profitable than corporate-level decisions Are more costly, risky, and potentially profitable than functional-level decisions
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Role of CEO
Provides long-term direction Assumes ultimate responsibility for firms success Solicits guidance from Board of Directors
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Enhances the firms ability to prevent problems Emphasizes group-based strategic decisions likely to be based on best available alternatives Improves employees understanding of the productivity-reward relationship Reduces gaps/overlaps in activities among employees as their participation clarifies differences in roles Resistance to change is reduced
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External environment
Internal analysis
Desired?
Functional tactics
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Internal Analysis
Depicts quantity and quality of companys financial, human, and physical resources Assesses companys strengths and weaknesses Contrasts past successes and concerns with current capabilities to identify future capabilities
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Continuous improvement
Provides another approach to strategic control Allows an organization to respond more proactively and timely to rapid developments
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