Introduction to Strategic

Management & Business Policy

Chapter 01

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Strategic Management and Business Policy

How Strategic Management Evolves
Financial planning
Forecast-based planning
Strategic Planning: Externally-oriented planning
Strategic management: Seeks Competitive Advantage and
Consider Implementation & Control)

Benefits of Strategic Management

Long term orientation and fit between environment,
strategy, structure and processes may lead to competitive
advantage

Challenges: Globalization & E-Commerce

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Theories of Organization Adaptation

Theory of Population Ecology
Institutional theory
Strategic Choice Perspective
Organization Learning Theory
Learning Organizations
Strategic Flexibility
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Basic Model of
Strategic Management
Four Basic Elements

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1. Environmental Scanning

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2. Strategy Formulation
Mission Statement

Setting Objectives & Goals

A statement of purpose (strategic intent)
committing the organization to ambitious
overarching (stretch) objectives.
Provides a sense of direction and
purpose.
Drives strategic decision making and
resource allocations.
Forces the seeking of significant
performance improvements to attain
objectives

Customer Orientation and Business

Definition
Abells Framework for Defining the
business
Consumer-oriented
versus Product-oriented business
definition

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2. Strategy Formulation
Selecting Strategy
Corporate strategy (Stability, Growth,
Retrenchment)
Business strategy (Competitive,
Cooperative)
Functional strategy (Technological
Leadership, Technological Followership)
Defining Policies
Guidelines for decision making that links
formulation to implementation
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3. Strategy Implementation
Programs
Strategy
Implementation

Budgets
Procedures

4. Evaluation & Control

- Continuous process
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Strategic Decision Making Model

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Strategic Decision Making

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