Strat 2 PDF

Strategic Control and Monitoring
Strategic evaluation and control as the last phase of the strategic management process are
‘employed so as to check and ensure if the designed business strategies are suitably and correctly
implemented.
Strategic Control Mecha
Let’s begin with the meaning of strategic control. There are so many ways of viewing
strategic control. According to Young, F. C. (2015).Strategic Management Made
Simple (First). Manila: Rex Publishing Company,, page 20, strategic control refers to the
monitoring process of the different organization's strategies and determining whether there
is a parallelism between the organizational climate and that of the environment. ‘The said
strategic control should be discussed and actualized in the environment context.
Likewise, same source cited the different types of strategic contro! according to
purpose and according to process these are the following:
A. Types of strategic control according to purpose:

1 Presupposition control- is designed to check regularly and systematically whether
the set arguments which was done during the process of planning and
implementation are stillbinding because in formulating strategies, the process are
based on certain assumptions or premises. However, there is a need to monitor
closely the set strategies and make changes when needed because external
environments are continuously changing.
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Implementation control - is applied to assess if there is a consistency on the

intermediate strategies with the overall strategy. In many cases, a strategy consists
of small activities which complement each other which lead to the attainmentof
the mother strategy. In cases of misalignment of the said activities, a review of the
reasons for such occurrence is needed.
3. Strategic surveillance - is a monitoring system whereby a wide range of
occurrences inside and outside the business organization threatens the strategy
implementation of an organization, The term, surveillancerefers to the process of
shadowing, observing and scrutinizing the context. Constant consciousness,
awareness and knowledge of how the strategy implementation is succeeding,
4, Vigilance control ~ is a special type of strategic control which is applied when
organization's strategy reconsideration is pursued. Such action is pursued when
unusual events happen and there is no choice for the business organization to
attend to it and do the needed changes.
B. Types of strategic control according to process:

1. Sequential strategic control- a traditional approach to strategic control which is
sequential wherein strategy formulation is followed progressively by the
implementation of the designed strategies. When the strategies have been
implemented, strategic monitoring is carried out. The approach does not lend itself
to versatility and change.
2. Interactive strategic control - amore suitable approach for strategic control wherein
there is communication and collaboration of the different processes ~ strategy
formulation, strategy implementation and strategy control. In this type, formulation
of strategies is done and implementation of the said strategies is being evaluated
constantly. Immediate suggestions and improvements are applied to better improve
what has been formulated before. Simultaneously, strategic control is being carried
‘out so as to determine whether the strategy formulation and implementation are
thoroughly and systematically evaluated. Interactive strategic control is better more
advantageous than the sequential strategic control in all aspects. Some of its
advantages are
‘+ The approach is open.
‘Interactive strategic control is flexible.
‘+ The approach minimizes the so-called “time leaks”
‘* Better strategic options can be crafted when needed.
3. Feedback strategic control ~ a combination of sequential and interactive approaches.

In this approach, the strategy formulation, implementation and monitoringare done
in sequence but there is a feedback loop which is essentially interactive.
How can feedback strategic control be measured? According to the same source,
feedback control can be accurately measured by performance. Performance refers to the
ratio of the results which is derived from the resources invested by business organization.
In short,
Performance = Results/resources
Likewise, the same source discussed the four categories of performance and the
metrics for each type of performance and these are as follow:
A. Financial Performance - Financial performance is most important for all
business organizations which has intention of making profit or at the least,
continue to exist. In measuring the financial performance, there are different
ways that can be utilized and these modes can be expressed through financial
metrics and some of them are the following:
1. Profitability measures - these are the indicators which show the business
firm's abilityto generate profit or earnings as compared to its expenses
and other significant costs incurred during a specific period.
Y Gross Profit Margin - turnover percentage wherein a high gross
profit margin is desirable. Results will show either the sales
prices are high or production costs are low.
Gross Profit Margin = Operating
“PGPprofit
Y Net Profit Margin - Turnover percentage less all expenses, It
shows either that sales prices are high or that all cost are well
kept under control.
Not Profit Margin = NetSSCPrOE*
profit 100
Y Return on Capital Employed (ROCE) - net profit generated from
Php 1 of assets employed is shown by this metrics. Capital
employed is total assets less current liabilities.
Net profit
Returnon capital employed (ROCE) = rag 100
Y Asset Turnover - Turnover generated from every P1 of assets

employed is shown here. A high asset turnover is desirable.
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‘Asset turnover = corieal employed
2. Liquidity measures - financial indicators which measure the extent to
which the business firm has cash to meet the short-term and immediate
obligations or the ability of its current assets to meet the current
liabilities.
Y Current ratio - company's ability to meet its short-term liabilities
as they fall due is measured using this. A ratio in excess of 1 is
desirable.
Current assets
Current ratio = Correne liabilities
Y Inventory Holding period - the average number of days which
inventory items were held are indicated using this measure.
Inventory-holding period decrease is desirable which means that
the business organization is able to sell or turn over its stock
keeping units (SKUs)
Inventory
Inventory holding period = cozrof sales 955
Y Receivables (debtor) collection period - The average period it
takes customers of companyto pay theirdebts. Collection period
decrease is desirable which will mean that the collection of
receivables of company r the credit control is efficient.
Receivables x 365
Receivables (debtor)period = “FTES
Y Payables (creditor)period - With this measure, the average

period that it takes a business organization to pay its debts is
shown. A decrease in the payment period is desirable which
means that the said organization is able to pay for its purchases.
Payables 1365
Payables (creditor)period = Purchases
3. Gearing (risk) measures - these are determinants of financial leverage.
Gearing ratio - Long-term debt as an equity percentage is shown,
using this measure. A low level of gearing is desirable where the
risk level is minimized in terms of debt payments.
Debt x100
Gearing ratio = Equity
¥ Interest cover- The operating profit is equal to the profit before
finance charges and tax) divided by the finance cost. Interest
cover decrease is desirable where operating profit is higher than
the finance cost.
Incerese cover = erating profit
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4. Other investor's measures

Y Earnings per share (EPS)-The profit attributable to each share is
measured here. Ideally, there should be an increase in earnings
per share.
Profit after tax less preference dividends
Earningsper share EPS) = ireigheed number of ordinary shares in issua
¥ Dividend cover— Increase in the dividend cover indicates that the
business organization is more able to make dividend payments to
shareholders.
Dien cover = Mt
¥ Dividend yield - Dividend yield increase means an increase in
returns to shareholders.
Dividend /share
Dividend yield = 7 ent share price 100
B. Efficiency and Productivity Performance - These are the emphasis of every
business firm which has the aim of achieving success. Measures of the said
success are quantitative in nature,
Y Productivity of resources - The output over input ratio which helps
identify how a business firm can maximize its resources to the fullest
extent possible so as to achieve higher revenues and sales.
Productivity of resources = Ousput
Input 100
¥ Employee labor productivity - the ratio of the entire plant productivity(
total number of products manufactured ) by the total number of hours
worked by workers for a specific period.
Total no.of products manufactured £100
Empey abr prod ca ried
Y Individual employee sales productivity - the ratio of the net sales of
individual over the number of hours worked .
Individual employee sales productivity= —__Netsales__
Number of hours worked 199
Y’ Efficiency ratio - Expense percentage over revenues
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Ef ficiency ratio = Expenses x100
Y Operating profit margin - a measurement of what proportion of the

revenues of business organization is eft after paying for variable costs of
production such as raw materials, wages and others.
Operating profit margin = Operating onincome «100
Y Defect age - the number of days since the defect is not fixed and open.
Y Defect/Reject Rate - the ratio of the number of rejects/defects over the
total number of items produced.
Defector Rejct race = Tatsnset steric» 199
Y Defect Resolution Rate - the rate of closing the open defects over a
period.
Defect Resolution Rate = Total total
no.of defects resolved
effort spent * 10°
C. Market Performance -through market performance metrics, feedback can be

adequately actualized in addition to financial performance.
Y Market growth rate - the increase in size, sales or demand observed
within a group of consumer over a specified period.
Market growth rate = Demand ‘Demand
(before) = Demand (now).
(before) 00
Y Market share - the percentage that the business firm has of the total
units(market) or sales for a specific product or service in a given period.
Total sales for a product
Market share = =a sales of the market for the product * ™ 00
¥ Net marketing contribution - a financial measure of marketing
profitability.
_Net marketing contribution = Sales revenues x Gross margins — Marketing & Soles Expenses
Y Marketing return on sales (ROS) - a marketing profitability metric which

is simple that allows a business firm to compare the performance across
the business organization and other companies.
on Sales (ROS) = Net marketing
‘Marketing Return ae contribution
Y Marketing return on investment (ROI) - a marketing profitability metric
which shows the ratio of marketing contribution to sales and marketing
expenses.
Net marketing contribution
Marketing return on investment (ROI) = ‘Marketing and sales expenses * °°
Y Customer retention - Customer relationship percentage which once
established, a business
is able to maintain on a long term basis.
Total customer
Customer Retention = Total customers retained
at the start of the year 100
D. People Performance ~ Productivity/efficiency and effectiveness are relevantly

correlated and interrelated because productivity/efficiency is essentially
measurable, effectiveness is basically descriptive and qualitative, The focus
here is on people and how they uniquely and operationally do things.
Measuring and analyzing differentiated people performance are expressed
through indices.
Y Employee engagement index - measures workplace approach in
business firm which is designed to ensure that its employees are
motivated to contribute to the success of business, committed to the
goals and values of organization and at the same time, are able to
improve their own sense of well being.
Employee satisfaction index- Measures satisfaction among employees in
terms of whether the said employees are content and happy and
whether the business firm is able to fulfill their needs, desires and
expectations at work.
¥ Leadership index- measures leadership in the management ability so as

to inspire others to perform well and to make sound decisions.
Y Effective communication index - measures communication effectiveness
as being a two-way process which involves sending right messages which
are being correctly received and understood by other persons.
—<—<<
Y Health profile index - measures the individual's health lifestyle which
means individual practice pattern and personal behavior choices which
are related to elevated or reduced health risk.
Y Quality of life index - measures the quality life from both subjective and
objective perspectives.
Y Motivation index - measures the motivation degree by which an
individual or the entire business organizationis inspired
to do their best.
in all undertakings.
A. Guide Questions:
‘Answer the following to check what you learned from the discussions so far. Check your
answers from the provided answer key at the end ofthis module. There is no need to
submit your answers to OEd.
1. Whatis strategic control?
2. Enumerate the different types of strategic control.
Strategic Incentive Management
One way to ensure quality people performance is through an effective and efficient
strategic incentive management. There are different types of incentives that can motivate
people in business organization. According to Incentive Management Strategies And
Employee Performance: A Study Of Manufacturing Firms In Port Harcourt (2017) Retrieved
December 15, 2019 from https://www.ijaar.org/articles/Volume3-Number8/Social-
Management Sciences/ijaar-sms-v3n8-aug17-p20.pdf. these are the following:
‘A. Employee's salaries and wages
1. Salary - In attracting retaining and motivating people in an
organization, salary is an important factor. Employees/workers in an
organization be compensated in relation to their work/performance.
2. Premium payments - another form of incentive which is given to
employees/workers in recognizing them for taking up additional work or
in working in unfavorable environment.
3. Payment for time not worked - this include sick leave, vacation leave, holidays,
lunch period and paid time off programs. The said payment is usually given
to employees or workers after a specific period of time. Employees with
families value this incentive. Because of this incentive, the said employees
families Value this incentive. Because of this incentive, the said employees
or workers have the opportunity to have time with their families while still
being paid.
4, Short-term incentive - These are usually called bonuses or commission which
are paid either monthly or weekly. Workers or employees are given this,
incentive when they are able to meet certain criteria.
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B. Non-monetary
1. Flexible work schedules - in this incentive, the employer gives the employees
or workers the opportunityto change work hours considering the latter's
personal schedule but still maintaining the pay and position.
2. Organizing activities - Business firm can give this type of incentive by
organizing activities like year party, company function or holiday party.
‘Through the said activities, employee morale is enhanced and can feel they
are appreciated.
3. Promotion - Before recruiting qualified persons for vacancies, promotion
from within is considered wherein the business firm designs programs for
employees to be promoted to higher positions. This is important for
employees in lower level especially those who have a desire to have
increased pay and responsibilities.
4, Verbal praise and positive feedback - these can be done through praising and
giving positive feedback for a job well done by employees or workers in a
gathering or program. Likewise, sending a thank you call or email to the
person may be done. Through these acts, employees feel they are valued and
appreciated by the business organization where they belong.
5. Educational reimbursement - this incentive is given to workers or employees
who prefer to have a further education. Here, the business organization
reimburses the workers or employees for expenses on their educational
qualification improvement. This is important and a big help for employees
who love to improve education not only for increased positions and pay but to.
be an asset to the organization where he or she belongs.
Likewise, the same author emphasized that there are studies which showed that
incentives are related to job satisfaction of employees. Incentives can motivate employees
to work well and in turn have a quality performance and further result to employees’
commitmentto the company. Incentive system plays an important part in human resource
management. Incentive design process always begins with goal and expected outcome
recognition which is usually known as incentive philosophy. The said philosophy is formed
by the balance of rewards - direct and indirect, the job role and the employee, and the
external-internal equity. Culture of business organization should entail adaptivity,
consistency, mission and involvement. To experience productivity, manufacturing
companies have to be consistent and involved with incentive practices. Managing incentive
strategically will ensure productivity among the workers or employees and in turn will make
the business successful. Effective incentive management always results to improved quality
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of work among workers and employees. Incentive is the center of the employment process,
between the employee and employer because the former depends on salaries and wages and
for the employers, decisions regarding remuneration affect the business cost and its
competitive capacity.
B. Guide Questions:
Answer the following to check what you learned from the discussions so far. Check your
‘answers from the provided answer key at the end of this module. There is no need to
1, Whatare the different types of incentives which can motivate employees?
2. Why do incentives related to job satisfaction of employees?
Strategy Analysis
‘What is the purpose of considering business analysis? Accordingto Strategy Analysis
Chapter Study Group Learning Materials (2015) Retrieved December 16, 2019 from
business analysis which includes analyzing the strategy should be considered so as to
collaborate with stakeholders to have the following: identification of the business needs,
addressing the said need by the said business organization and to have alignment of the
resulting strategy with other strategies. In addressing the said needs, defining the future and
any states of transition are needed. Through business analysis, possible solutions can be
discovered so that the capabilities of the business firm can be applied so as to reach the
desired set of goals and objectives. Through business strategy, present strategy can be
analyzed and measured. and if there is a need to make adjustment, the business firm should
consider the process of changing the present strategy. Likewise, same source discussed the
different tasks involved in strategy analysis and these are the following:
1. Analyze the current state - involves understanding of the needs of business
as well as the context for change. A definite reason for the need for such
changes should be determined. In the context of existing stakeholders,
technology, processes and enterprise's policy, change occurs. Current state of
the business firm can be described on differentlevels. Whilea change is being
developed, the current state is rarely static. In changing the current state,
alterations in the desired future state may be forced, have a change in strategy
or requirements and design. Aside from the business needs, in analyzing the
current state of the business, there are things that should be considered and
these are the present organizational structure and culture, capabilities and
processes, technology and infrastructure, policies, business architecture and
the external influencers such as the customers, competitors, suppliers,
technology, political and regulatory environment and the macroeconomic
factors. In analyzing the current state, there are different techniques that may
be utilized and these are the following:
* Benchmarking and market analysis
‘* Business capability analysis
‘© Business model canvas
‘© Business cases
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Concept modeling
Concept modeling
Data mining
Document analysis
Financial analysis
Focus group
Functional decomposition
Item tracking
Lessons learned
Metrics and key performance indicators (KPIs)
Mind mapping
Observation
Organizational modeling
Process analysis
Process modeling
Risk analysis and management
Root cause analysis
Scope modeling
Survey or questionnaire
‘SWOT analysis
Vendor assessment
Workshops
‘Through considering the given factors and the techniques that may be
used for analyzing the current state of the business organization, current state
and business requirements will be determined.
2 Define future state - involves identifying the goals and objectives. It also
involves determination of what needs to change in order to realize the
achievement of those goals and objectives. In defining the future state, there
are techniques which can be utilized and these are
Acceptance and evaluation criteria
Balanced score card
Benchmarking and market analysis
Brainstorming
Business capability analysis
Business cases
Business model canvas
Decision analysis
Decision modeling
Financial analysis
EL
Interviews
Lessons learned
Metrics and key performance indicators (KPIs)
Mind mapping
Organizational modelling
Process modelling
Prototyping
Scope modelling
SWOT analysis
Vendor assessment
Workshops
Assess risks - involves understanding the risks and recommending actions to
address the said risks. In assessing the risks, understanding of the undesirable
internal and external force consequences on the business during the transition
to or within the future state should be done so as to do the recommendation
of course of action may be done effectively. In this task. risks related to the
current and future state, the change itself, a change strategy or any activity
done by the enterprise should be analyzed and managed - the consequence:
the impact, likelihood of the risk and the potential time frame when such risks
occur. Identification, analysis and management of such risks will be utilized
as input to determine the change strategy. In analyzing and management of
the risks, the following techniques may be utilized:
* Brainstorming
Business cases
Decision analysis
Document analysis
Financial analysis
Interviews
Lessons learned
Mind mapping
Risk analysis and management
Root cause analysis
Workshops
Define change strategy - involves identifying alternatives for reaching the

desired state in the future. It also involves determining any required
transitional states. Capacity of business organization should also be assessed
to make and sustain the change in the future state. In this stage, preferred
change strategy from several options will be identified through a business
case. Likewise, requirements to be included in each phase, release or iteration
of change should be determined if the future state will be achieved over time,
‘The following techniques may be used in defining the change strategy:
* Balanced scorecard
Benchmarking and market analysis
+ Brainstorming
* Business capability analysis
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Business cases
Business model canvas
Decision analysis
Financial analysis
Focus groups
Functional decomposition
Interviews
Lessons learned
Mind mapping
Organizational modelling
Process modelling
Scope modelling
SWOT analysis
Vendor assessment
Workshops
Outputs of this phase will be the approach or strategy which the business
organization will follow or apply to guide change. Likewise, scope of solution
which will be achieved will be determined through the execution of the said
change strategy.
C. Guide Questions:
‘Answer the following to check what you learned from the discussions so far. Check your
answers from the provided answer key at the end ofthis module. There is no need to
submit your angyers to QE,
1. What is the purpose of considering business analysis?
2. Give the different tasks involved in strategy analysis.
Organizational Issues and Contingency
Business organizations once in a while meet problems or issues and some contingencies
can be considered to address the said issues and according to 4 Most Common
Organizational Problems: Organizational Development. (2019, May 16). Retrieved
December 16, 2019, from _ https://peopledynamics.co/4-common-organizational-
problems/., the four common problems encountered by a business firm or organization are
the following:
1. Vague or lack directions - There are times, when the leader of a business
organization fails to give a definite and clear directions to employees on what the
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business wants to achieve. Because of that the employees are left scattered and
sometimes the said talents of employees are wasted not utilized properly to achieve
the goal of making the business successful. Having a goal which will be common to
allwill prevent the company from deviatingits path. And so to address the said issue,
the business leader should see to it that the said goals and objectives will be
communicated clearly to all members of the business organization for long-term
growth and sustainability.
2. Poor communication and feedback - Another problem or issue occur in an
organization poor communication and feedback. An important element in effective
collaboration is communication. A good business leader should know how to
communicate well with all the people involved in the said organization - either
through oral, written or body language. Effective communication ensures
understanding of goals and other matters which will make the business successful.
Aside from communication, feedback also as important as communication. Through
effective feedbacking, all members of the organization will be more motivated to
work effectively and efficiently. As much as possible, constructive feedback should
always be done by the business leader so as to have a good employer-employee
relationship.
3. Ineffective teams
Another common issue which a business organization meets is ineffective teams.
Having multiple personalities in an organization may result conflict. If that conflict will
not be settled. there is a tendency that there will be ineffective teams which may result
to failure of achieving the business organization's goals and objectives. In this regard,
leaders in business organization should consider providing activities that will promote
camaraderie, unity and cooperation among its members. A good example is through
team building.
4, Lack of awareness -the last issue which is common to business organizations is the
lack of awareness. Each of the member of the organization has his job to do and that
is why the big picture of the said organization is sometimes set aside and overlooked.
In effective communication and absence of clear direction are some of the results of
the said reality. How this can be addressed? As a business leader, one should take
and set aside time to do reviewing of processes, practices, strategies and other
relevant things pertaining to the operation of business. Communicating and asking
feedback from the members of the organization will be a great help. Everyone should
consider business organization as a work in progress and constant assessment and
development are needed.
D. Guide Questions:
answers from the provided answer key at the end of this module. There is no need to
1. Whatare the four common problems or issues met by business organization?
2. How should the first two common issues be addressed?
Answers to the Guide Questions
Strategic Control and Mechanism

Question 1: Strategic control refers to refers to the monitoring process of the
different organization's strategies and determining whether there isa
parallelism between the organizational climate and that of the
environment.
Question 2: Strategic control can be classified accordingto purpose and process. In
terms of strategic control according purpose, these are the
presupposition control, implementation control, strategic surveillance
and vigilance control while strategic control according to approach,
these are the sequential strategic control, interactive strategic control
and the feedback strategic control.
Strategic Incentive Management
Question 1: Types of incentives which can motivate employees are classified
according to monetary and non-monetary. Monetary incentives include
salary, premium payments, payment for time not worked and short-
term incentive while non-monetary incentives include flexible work
schedules, organizing activities for employees, promotion, verbal
praise & feedback and educational reimbursement.
Question 2: Incentives are related to job satisfaction of employees. Incentives can
motivate employees to work well and in turn have a quality
performance and further result to employees’ commitment to the
company. Incentive system plays an important part in human resource
management. Incentive design process always begins with goal and
expected outcome recognition which is usually known as incentive
philosophy.
Strategy Analysis
Question 1: Business analysis which includes analyzing the strategy should be
considered so as to collaborate with stakeholders to have the
following: identification of the business needs, addressing the said
need by the said business organization and to have alignment of the
resulting strategy with other strategies.
Question 2: The different tasks involved in strategy analysis are the following:
First, analyze the current state: second, define future state: third,
assess risks and finally, define change strategy.
Organizational Issues and Contingency
Question 1: The common issues or problems met by business organization are vague
or lack direction, poor communication and feedback. ineffective teams
and lack of awareness.
Question 2: In terms of vague or lack direction, business firm should have a
common goal and the business leader should see to it
that the said goals and objectives will be communicated clearly to all
members of the business organization for long-term growth and
sustainability. With regards to poor communication, a constant and
effective communication should be ensured by the business leaders and
effective feedbacking should be done by the latter so as to achieve good
employer-employee relationship,
Balanced Scorecard
What is a balanced scorecard? According to Burton, B., Boo, M., & Borissov, T. (n.d.).
Balanced Scorecard Basics. Retrieved December 27, 2019, from
https://balancedscorecard.org/bsc-basics-overview/. , balanced scorecard refers to a
strategic planning and management system which business organizations utilize to
* Communicate what the business organization is trying to accomplish
* Make alignment of the day-to-day work which everyone is carrying out with
strategy
* Rank products, projects and services
* Evaluate and monitor advancement towards strategic targets
Another definition of balanced scorecard was given by other source and according to
What is a Balanced Scorecard? (n.d.). Retrieved December 17, 2019, from
https://asq.org/quality-resources/balanced-scorecard., balanced scorecard pertains to a
management system which gives feedback on both internal business processes and external
result to improve strategic performance and results continuously. At a level of strategic
performance and results, a balanced scorecard supports continuous improvement by
bringing together means around internal processes and external outcomes.
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According to the same source, through balanced scorecard, articulation and action
on one’s vision and strategy becomes possible. Specifically, the balanced scorecard is
utilized to
* Facilitate consistent and effective communication because everyone speaks
a shared metric language
* Carry on focus around the critical requirements
© Facilitate regular performance review
© Ensure alignment of organizational activities
According to Balanced Scorecard (Kaplan & Norton): Business. (2019, November 8).
Retrieved December 17, 2019, from
hi ‘www tutor2u.net/business/reference/balanced-scorecard-introduction-overvi
, the aim of balanced scorecard is to make the business activities aligned to the business
vision and strategy, improve the external and internal communication and to have a monitor
performance of business against the strategic goals. Important range of both financial and
non-financial data and information which supports effective management of business are
provided by the balanced scorecard.
Same author gave the background to the balanced scorecard and these are the following:
* There are no single measures can give a wide picture of the health of business
organization;
© Instead of utilizing single measure, why not utilize a composite scorecard involving
different measures.
* Kaplan and Norton developed a balanced scorecard, a framework which is based on
four perspective - financial, customer, internal (business processes) and learning and
growth.
* Critical measures for each of the said perspectives should be selected by the business
organization.
BENEFITS AND DRAWBACKS OF BALANCED SCORECARD
According to Balanced Scorecard (Kaplan & Norton): Business. (2019, November 8).
Retrieved December 17, 2019, from
https://www.tutor2u.net/business/reference/balanced-scorecard-introduction-overview
Likewise, according to same source, using balanced scorecard has main benefits and these
are the following:
1. Aids business organization focus on what needs to be done so as to create a
refinement in performance
2. Acts as a device which integratea diverse corporate programs
3. By translating strategy into targets and performance measures, balanced scorecard
makes strategy operational
4. In order to enable the employees and local managers to see what they need to do
well if they like to enhance organizational effectiveness. Balanced scorecard aids in
breaking down corporate level measures.
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Balanced Scorecard
5. Gives a thorough view which overturns traditional organization idea asa collection of
isolated, independent functions and departments.
However, same source cited some drawbacks of the balanced scorecard and these are
the following:
Arisk that the business will have so many performance indicators
Itis not easy to have a balance between the four perspectives
Management in the senior level may still be too concerned with the performance of
financial aspect
© There is a need for regular updating so as to make it useful
Aside from these, Wright, T. (n.d.). How to Implement

the Balanced Scorecard (2019
Update). Retrieved December 17, 2019, from https://www.executestrategy.net/blog/how-
to-implement-the-balanced-scorecard., some challenges encountered by some
implementers of balanced scorecard are the following:
* Too much is taken to set up across one’s business organization;
Too much is taken to set up across one’s business organization;
There is no full understanding of balanced score card which cause failure to benefit
from it;
* Balanced scorecard is inflexible and doesn’t account for business landscape changes.
Some find too focuses on financial measures compared to other perspectives.
© The focus in more on internal aspect, ignoring competitive and macro-economic
aspects of business .
Any business strategy tool like balanced scorecard can be considered an excellent
tool when properly implemented and truly will give benefit to business organization. Most
of the problems occurred in using the balanced scorecard when it is often viewed and
considered as mere reporting framework rather than a true and good way of managing one’s
business.
HISTORY OF BALANCED SCORECARD

According to the same source, balanced scorecard which is more than a system of
measurement but a management system was developed in early 1990s by Robert Kaplan and
David Norton. Balanced scorecard was described as an important move away from over
reliance on financial measures in Kaplan and Norton's book entitled, The Balanced Scorecard:
Translating Strategy Into Action. According to the Kaplan and Norton (1990) as cited by
What is a Balanced Scorecard? (nd.). Retrieved December 17, 2019, from
https://asq.org/quality-resources/balanced-scorecard., in the past report on financial
measures was all about offering enough story for industrial age companies but not story
about information age companies. For them, business organizations should create future
Course Module
value through investment in customers, employees, supplies, technology, processes and

innovation. Fora better management, organizational performance evaluation in a balanced
manner on the parameters should influence one’ s business.
gathering, hypothesis testing on which the strategy was based and necessary adjustme
making. Moreover, they emphasized that business organization should utilize balanc:
scorecard as the center of management process and not budgets.
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Balanced Scorecard
FOUR PERSPECTIVES OF THE BALANCED SCORECARD
Four Perspectives of the Balanced Scorecard
Financial
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Organisational
Capacity
Figure 1 - Balanced Scorecard Perspectives

According to What is a Balanced Scorecard? (n.d.). Retrieved December 17, 2019, from
https://asq.org/quality-resources/balanced-scorecard., balanced scorecard is a tool for
strategic management which views the business organization from different perspectives
like
Financial - shareholders’ perspectives
Customer - what the customers of the company perceive and experience
Business process - the key processes one use to encounter and surpass shareholder
and customer requirements
* Learning and growth - how one promote ongoing change and continuous
improvement
For each of the said perspectives, the balanced scorecard catalyze one to create
metrics, set target for performance and collect and analyze data. Efficient mechanism for
reviewing the implementation of strategy based on measurement is offered by the balance
scorecard.
The balanced scorecard according to Balanced Scorecard (Kaplan & Norton):

Business. (2019, November 8). Retrieved December 17, 2019, from
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https://www.tutor2u.net/business/reference/balanced-scorecard-introduction-overview..
produces a balance betwee!
© Four key perspectives in business : customer, financial, internal processes and
innovation
How the business organization sees itself and how other people see it.
The long run and the short run
The status at the present time and change over time
Summary of BSC Method by Kaplan and Norton (n.d.) Retrieved December 17, 2019
from https://www.valuebasedmanagement.net/methods balancedscorecard.html
emphasized that balanced scorecard method of Kaplan and Norton is actually a strategic
approach and a system for managing performance which enables business organizations to
have a translation of the vision and strategy of company into implementation through
working from the following perspectives:
Financial perspective - According to Kaplan and Norton as cited by the same
source, traditional need for financial data is not disregarded but aside from
enough handling and processing of financial data, it is hoped that with the
corporate database implementation, there will be centralized and automated
processing. There is a need to have inclusion of additional financial-related
data such as cost-benefit and risk assessment data in this category.
Customer perspective - Developing metrics in evaluating the satisfaction of
customers to products and services provided by a certain business firm should
be considered here because poor performance from this perspective may result
to present or future decline. Thus, in the said development of metrics, the kinds
of customers and type of processes for which business firm is providing
products either in a form of goods and services to the said customer groups.
Business process perspective - it pertains to internal processes in business. The
managers are allowed to know well if their business is running smoothly or not
through the metrics based on this perspective. Likewise, conformance of the
company’s products and services with customer requirements or mission is
determined. An intimate and careful designing of the said metrics should be
done by those who know the said processes. Aside from the process with
regards to strategic management, two kinds of business processes may be
determined and these are the mission-oriented processes and support
processes. The former are the government offices’ special functions and many
unique challenges are encountered in these processes while the latter are more
repetitive in nature which with the use of generic metrics, are easier to
measure and benchmark.
Learning and growth perspective - this includes training of employees and

corporate cultural attitudes related to improvement - both for individual and
corporate enhancement. For Kaplan and Norton, learning is more than training
and things like mentors and tutors within the business organization as well as
the communication among employees which allows them to get help on a
problem once itis needed. Technological tools like intranet is also included.
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Strategic Management a
Balanced Scorecard
Typical scorecard metrics for each perspectives were given by Wright, T. (n.d.). How
to Implement the Balanced Scorecard (2019 Update). Retrieved December 17, 2019, from
these are the following:
1. Financial perspective
© Sales performance
* Cash flow
© Return on equity
© Operating income
2. Customer perspective
© On-time delivery
* %ofsales from new products
© Share of wallet
* Net promoter score
3. Internal business process
© Cycle times
Unit costs
© Error rates
© Yield
4. Learning ad growth
‘© Rate of retention of high performing staff
* Employee engagement score
© Skill increases of staff
How should a balanced scorecard be implemented effectively? According to the same

source, instead of looking at balanced scorecard as a simple and series of equally weighted
perspectives in its usual diagram, it should be considered a process whereby , from the
bottom, the business organization has to work way upwards through each perspective with
a view to have financial gain. Each perspective unlocks the business man's ability to deliver
effectively against the one above it. Figure 2 should be the model to be utilized in
implementing the balanced scorecard.
Financial S
—__ 4
Customer
Learning o
&Growth
Figure 2 - Balanced Scorecard as a Process

Wright, T. (n.d.). How to Implement the Balanced Scorecard (2019 Update). Retrieved
December 17, 2019, from https://www.executestrategy.net/blog/how-to-implement-
the-balanced-scorecard.
If the diagram on Figure 2 will be considered in utilizing the balanced scorecard, one will
see that the end of the process will the increase in profit (Financial profitability). The ability
to manage business’ internal processes will be dictated directly by the ability to learn and
grow which will result to improvement of internal processes. The said improvement will
surely have a positive impact on customers and at the same time will reduce business costs.
Combination of lower costs and higher engagement of customers in the business firm's
product will lead to the end goal - increase profit and financial return.
It was also emphasized by the same source that when balanced scorecard will be
implemented as discussed in the previous paragraph, it will be a powerful tool in helping
business organization to do the following functions:
© Create a tangible roadmap
Graton OC Strategic Management 5

Balanced Scorecard
* Determine major areas and roadblocks where the business firm lack the critical
competencies to proceed in the next phase.
© Express how the business goals will directly aid the business firm to move upwards
through the stages
* Prioritize activities of business in the order they need to be tackled so as to allow the
most rapid progression through phases.
In short, the chief benefit of the balanced scorecard is not really the creation of the
perspectives but rather from the process of strategic management using the four
perspectives as phases to undergo to achieve success.
Why should a business firm utilize a balanced scorecard? According to Should Your
Business Use a Balanced Scorecard Approach? (2019, January 15). Retrieved December 17,
2019, from https://onlinemasters.ohio.edu/blog/should-your-business-use-a-balanced-
scorecard-approach/. , balanced scorecard should be utilized by business firm because it
gives a framework for the entire business organization in terms of guiding performance.
Specific reasons why business organization should use a balanced scorecard were cited by
the same source and these are the following:
* Communicate the vision and strategy of business
* Share goals and objectives which support the vision and strategy of business
* Show how these strategic objectives give impact to long-term objectives and
strategy
Create budgeting, tracking and system of reward based on business goals.
Facilitate organizational changes at the operational level.
Compare performance among different business units
In terms of strategy and performance, tighten up gaps
Take action to close gaps which are unfavorable
According to Describe the Balanced Scorecard and Explain How It Is Used - Principles
of Accounting, Volume 2: Managerial Accounting, (n.d.). Retrieved December 17, 2019, from
hi ooks /principles-managerial-accounting/pages/12-4-describe-the-
balanced-scorecard-and-explain-how-it-is-used, in general, managers as well as their
employees strive to create and work in an ethical business environment. In order to develop
the said business environment, the employees need to be informed of the values and ethical
standards of the business firm where they belong and have an understanding of the laws
and regulations under which the business organization operates. What will happen if the
said employees do not have knowledge of the standards by which they will be measured,
there might be no awareness if their behavior is ethical or not. Employees are enabled to
understand their obligations to business organization where they belong and to assess their
own obligation in the workplace.
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Business organizations can hold meetings to evaluate their ethical environment. Such
meetings use ethical analysis metrics, A good example isthe strategy review meeting which
companies usually conduct so as to have a discussion of the indicators and initiatives from
the balance scorecard of a certain unit and evaluate the progress of and hindrances to the
execution of the strategy. In the said meeting, the metrics to be analyzed should include the
employee participation in the ethics training, the availability of a hotline, the satisfaction of
employees, customers and other stakeholder, regulation compliance, employee turnover,
environmental awareness, community involvement, diversity, efficient usage, legal
expenses, condition of assets and social responsibility. Metrics should be crafted to business
organization's values and desired results. The utilization of balanced scorecard helps lead
to the employees and managers’ ethical environment.
A. Guide Questions:
1. Define a balanced scorecard.
2. What are the benefits and drawbacks of balanced scorecard?
Balanced Scorecard
Question 1: Balanced scorecard refers to a strategic planning and management
system which business organizations utilize to
* Communicate what the business organization is trying to accomplish
* Make alignment of the day-to-day work which everyone is carrying
out with strategy
* Rank products, projects and services
* Evaluate and monitor advancement towards strategic targets
Balanced scorecard can also pertains to to a management system

which gives feedback on both internal business processes and external
result to improve strategic performance and results continuously.
Question 2: Some benefits of using balanced scorecard include the following:
* Aids business organization focus on what needs to be done so as to
create a refinement in performance
Acts ad a device which integrate a diverse corporate programmes
By translating strategy into targets and performance measures,
balanced scorecard makes strategy operational
© Iorder to enable the employees and local managers to see what they
need to do well if they like to enhance organizational effectiveness.
Balanced scorecard aids in breaking down corporate level measures.
Gives a thorough view which overturns traditional organization idea
as a collection of isolated, independent functions and departments.
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Balanced Scorecard ut
However, some of its drawbacks are the following:

Arisk that the business will have so many performance indicators
It is not easy to have a balance between the four perspectives
Management in the senior level may still be too concerned with the
performance of financial aspect
‘© There is a need for regular updating so as to make it useful
Strategy from a Deeper Perspective
Framework ofa Strategy

‘Schemes and tactics were informally implemented as when a person joined ina game,
when a government went to war or when a business organization engaged in business in
the past. Their actions indicates an approach which is called as strategy. Strategy took a
more formal character through individuals who studies its varied forms and nature and
modes of implementation through the years.
Strategies are implemented by individuals in their personal lives and in workplace.

Individuals, organizations, groups, communities and governments devise strategies. It was
stated and discussed in the previous module that strategies are plans which are formulated
and implemented with the purpose of attaining the set goals and objectives of an
organization. Likewise, the term is also associated with the map to chart, a plan to be
executed and a path to follow. Moreover, itis an approach, a policy, a tactic
or line of attack.
In this module, we will seek to_dig deeper into the essence of the term strategy and diverge
a little or importantly away from how it has always been treated and considered. This
module will focus on the viewpoint of strategy as a concept, as a tool and as people.
Strategy as Concept
Through the years, the word, strategy, due to its popularity, thoughts and
perceptions evolved. Some management gurus consider strategy as an idea, concept,
a model, a theory or simply beliefs and views. Concepts related to strategy are
according to Young, F. C. (2015). Strategic Management Made Simple (First). Manila:
Rex Publishing Company,, pp.140-142, are the following:
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a. Strategy is intellectual elasticity. This concept came from management guru from.
Japan in the name of Kenichi Ohmae who wrote The Mind of the Strategist in
1982. For him, strategies originate from creative minds and not from rote
memory. Ohmae is also known for developing curious mode of thinking called
strategic thinking which underscores that the strategist’s mind is
characteristically that of intellectual elasticity. What is intellectual elasticity?
According to the same source, intellectual elasticity refers to the adaptability and
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flexibility in coming up with realistic responses to changing situations. Three
main players should be taken into account in designing business strategy and
these are the customers, the company and the competitors. Strategy as
intellectual elasticity can be best portrayed accordingto Ohmae in the following
situations:
‘© Strategy is referred to as creativity in radical initiative launching.
* Strategy may refer to investment of additional time, effort and money in
the factors which have the greatest potential to succeed in identifying the
key success factors of business.
‘+ Strategyis having the flexibility to adapt and study to the environment,
to segment and to specify improvement strategies in matching the unique
skills of company to customers’ needs.
‘© Strategy refers to comparing of company’s strengths with those of
competitors and exploiting the advantages to build on superiority. For
Ohmae, human mind has the infinite potential of achieving a creative
mode of strategic thinking,
). Strategy is mindset, Richard Pascale, a faculty of the Graduate School of Business
at Stanford University and an associate professor at Oxford University in his
book, Managing the Edge, considers strategy asa frame of attitude and mind. For
him, an outlook which is deliberate and monitored should be developed within
the system of business organization. Any business cycle begins with the business
organization coming up with a strategic concept which is of product - product or
service, organizes itself around the basic product and in the process, creates a
personality and culture for itself. Then the business enjoys the success for a
while but begins to falter. The business organization goes back to basics
naturally and tires to rediscover its old formula of success. Developing a
different mindset is Pascale's strategy concept. For him, management of
business should be future from the past but present should be managed from the
future. In other words, the strategies that should be adopted by companies are
those which are realistic but anticipatory and visionary. A strategic mindset
is always innovative and active. It should be alive and filled with ideas. Itis more
on looking at the future to deal with the present.
Strategy is learning._In the learning organizational model, change demands
learning and the latter refers to continuous change. Likewise, the model refers
to the process of maintaining and enhancing performance experientially.
Learning is not an accidental activity based on facts and data although it may
happen consciously or unconsciously. What is learning? According to the same
source, learning refers to any knowledge and competencies which may be old
and new, gained or improved from persons, books, institutions, training,
experiences and others. This comes in a form data, information, facts, skills,
attitudes, values or philosophies. Learningis not limited to personal learning
but it’s center is in organizations. Organization's learning is easily determined
and distinguished in activities. Moreover, according to the same source, there
are forms of learning domains and these are continuous improvement,
innovation and differentiation, benchmarking and continuous adaptation.
Continuous improvement refers to ongoing constant process of doing things
better. Life cycle improvement never ends. Innovation refers to learning new
concepts and new ways of doing things - new knowledge, new modes of thinking
and new products. Differentiation is a shade of innovation ~ enhancing,
improving and enriching what is existent. Benchmarking is the combination of
continuous adaptation which refers to responding to environmental changes
and continuous improvement. The former also implies resilience, flexibility and
a spirit of openness to change.
4. Strategy is natural capital. For Hawken et. Al(1999) as cited by Young, F.C.
(2015). Strategic Management Made Simple (First), Manila: Rex Publishing
Company., page 141, strategyis a natural capital. Natural capital components
include natural resources, ecosystem services and living systems. Natural
capitalism central strategies are also stated by the same source and these are
the following:
* Shift to biologically-inspired model to eliminate wastes
* Moving to a model of a solution-based business where value is delivered
as service flow
+ Reinvesting in natural capital to reverse planetary destruction.
It was emphasized that both economic and environmental priorities are

compatible with one another. Natural capital creates competitive advantage
when taken in this light- considering strategy as natural capital.
. Strategy is intellectual capital. Strategy is an intellectual capital in a closer

perspective. Two categories of knowledge are considered in the book,
Intellectual Capital which is published in 2004 and these are the common
knowledge and intellectual capital. The first one refers to stale and ordinary
because minimum expectations and knowledge are satisfied by this category of
knowledge. A knowledge which is important and outstanding which is over and
above this category is called the intellectual capital. Intellectual capital refers to
synergistic convergence and interrelationships of the valued resources of
business organization. Itis intangible and can be felt. It creates impact and can
be assessed. In attaining success in business, itis critical.
Strategy as a Tool
Strategic guru consider also strategyas a tool, an approach mode by which goals
and objectives can be achieved. Strategy as a method, process or technique relevantly
catalyzes growth and success of organization. Some of these strategy tools are the
information technology and a balance scorecard which was discussed fully in the
previous module.
1. Strategy as information technology. Radical development of information technology
was seen for the past 30 years. Things which have received impact of the said
information technology are on designing of products and services, doing things and in
the aspect of manufacturing. Work becomes easier, simpler and more efficient because
of information technology. According to Hammer and Champy (1993) as cited by
Young F. C. (2015). Strategic Management Made Simple (First). Manila: Rex Publishing
Company, 143, technologyis a significant strategy to moving business organizations
toward the fast achievement of corporate and entrepreneurial success. According the
same source, there are steps to be taken in optimizing technology and these are the
following:
a, Initially, a business organization begins on process improvement. Here, in
initiating changes within the organization, the entire workforce is empowered.
The said changes are minute enhancements which are confined to specific
functions. It creates a unique effect on work culture although this approach
brings little progress since all are involved in the process.
b. Process redesign follows when process improvement is in place. This step
goes beyond just initiating changes which involves a more thorough and
serious study of the goals, directions and plans in the light of business
profitability and customer expectations. In this step, there is a greater need
for information technology and at the same time, high degree of change is
present. In pursuing process redesign and resistance to change , there are
‘more risks because the common issue here is keeping the status quo.
. The business organization can pursue business process re-engineering
when the process redesign is in place. What is business process re-
engineering? According to Hammer and Champy (1993) as cited by Young, F.
C. (2015). Strategic Management Made Simple (First). Manila: Rex Publishing
Company., page 143, business process re-engineering (BPR) refers to the
fundamental rethinking and radical redesign of business processes so as to
achieve dramatic enhancements in critical contemporary measures of
performance such as quality, costs, quality, speed and service. The
technology's role here is important. Expectations of results are higher, costs
for improvement are bigger and time for substantial redesign to materialize
is longer in business process re-engineering.
2. Strategy as balanced scorecard. The ability to quantify performance is a competitive

strategy. Real measurement figures are given by that competitive strategy wherein
business organization are allowedto plan and devise ways of achieving their set goals,
and objectives. Balanced scorecard is one of the most recent developments in
measuring performances. In the book, The Balanced Scorecard written by two
management gurus in the name of Robert Kaplan and David Norton, balanced
scorecard asa strategy tool was introduced. Whatisa balanced scorecard? According
to Kaplan and Norton as cited by Young, F. C. (2015). Strategic Management Made
Simple (First). Manila: Rex Publishing Company. page 144, a balanced scorecard refers
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to astrategy template which illustrates four significant perspectives for performance

measurement namely learning and growth, customer, internal process and financial.
Learning and growth - These measures are the engines of other measures.
In actualizing other measures, learning and growth measures motivate
employees otherwise, business firm will find difficulty in translating
strategies to workable performance.
* Customer - These measures are utilized by business organizations so as to
increase customer reach and satisfaction.
+ Internal process - Important measures are on supply chains for operationally
excellent organizations. ‘The measures are on innovation for product leader
organizations while focus is on customer satisfaction for customer intimate
organizations.
* Financial - The need to determine a mechanism which measures growth and.
profitability is stressed on this perspective.
‘The said perspectives need

to be aligned to the vision and mission of organization.
It includes the business functions of finance, accounting, management, marketing,
human resource and production. Strategy maps were introduced by Kaplan and
Norton as cited by Young F. C. (2015). Strategic Management Made Simple (First).
Manila: Rex Publishing Company., p. 144 so as to concretize the balanced scorecard and
make it workable. Strategy maps refers to visual tools utilized in determining strategic
goals, designing strategies and implementing them. They are utilized to connect the
value-creating processes to the intangible assets. Four perspectives of the balance
scorecard are shown by strategy maps. Learning and growth is at the bottom which
consists of information capital, human capital and organization capital. Itis followed
by the internal process perspective where customer, operations innovation and
regulatory processes are emphasized. Product and service attributes, image and
relationships are emphasized by the customer perspective. The last one which is the
productivity and growth strategies make up the financial perspective. Activities are
mapped and linked by cause-and-effect arrows so as to achieve strategic goals. The
process is sequential. Utilizing the balanced scorecard is a strategy and allows for
accurate assessments of organizational indicators, raw data and specific measurements
and the results of which are helpful in planning and running a company.
People: Strategy
Aside from beinga concept and a tool, strategy is also people. People are strategies
in themselves. People are the individuals who possess effective management and
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leadership, monopolistic intellectual capital and creativity. They are managers,

executives, supervisors, subordinates and anyone who directs, leads and supports the
business firm toward the realization of goals and objectives. They are strategy
personified.
1. Strategy is effective management and leadership. Effectiveness is the common
denominator of effective management and leadership. Peter Drucker who has
been considered as the “guru of all management gurus” has placed the study and
practice of managementto a level of great relevance. The same source cited
examples of individuals who exemplify strategy as both effective management
and leadership and these are the following:
a. Alfred Sloan - He was a professional manager and well known for his
service at General Motors in 1950s and 1960s. For him, a manager should
be adecision maker and aleader. He has a belief that a chief executive
should not have friends on the job and studied management as discipline.
Some of his teachings are the following:
‘* Management is a profession and usually people in the management
preach but failed to practice it.
+ The professional should lessen his own interests and consider
more on the interest of customers.
* Professionals should make decisions accordingto facts but not by
preferences and opinions.
* Professional manager should see to it that only performance
matters and not to change or like people.
* Performance is above the “bottom line’ and professional manager
should set example like tolerance for diversity and integrity.
* Division and conflict are desirable and necessary because these
bring about consensus, understanding and commitment.
* Leadership is performance, trustworthiness and consistent
behavior and not public relations, charisma and showmanship.
* Professionalsare servants.
b. Harold Geneen - After Sloan, Geneen is said to be the greatest business

manager. He became an excellence symbol in business management and
was called the “Michael Angelo of Management’. His growth and
acquisition policies made the International Telephone and Telegraph
Company (ITTC) the biggest empire in the 1960s. He is an ultimate and
genius manager and remembered with deep appreciation and fondness for
impact on the careers and lives of his people; he had a natural enthusiasm,
high energy level and a quick mind. Some of his teachings or strategy
lessons are the following:
* One cannot run anything even business on a theory. There is no
formula, secret and no theory.
* In running a business, one should start with the end and do
everything one must do to reach it.
* Everyone is paid in two coins: experience and cash. Take the
former first and the latter will come later.
* Every business firm has two organizational structures. The first
one is the formal one which is written on the charts and the other
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Strategy froma Deeper Perspective
one is shown in the everyday living relationship of people in the
organization.
* Management should manage.
* Leadership can only be learned and cannot be taught.
* Egotism is the worst disease which can affect business executives
in their work and not alcoholism.
© The toil of numbers will make you free.
+ Develop spirit ofcorporate entrepreneurship.
+ There isa need foran independent and free board of directors.
Emotional attitude is the key element in good business
management.
€. Lee Lacocca - In management and leadership, Lacocca is one of the most.

widely read biographies. He worked for Henry Ford and Mustangs one of
his best car products. He had amazing ideas on administration which are
workable. For him, customer are very important. Lacocca conducted a
management system which is the quarterly review system. Some of his
teaching or strategy lessons are the following:
* When one borrow something itis advised to write it down so as not
to forget it
Use knowledge in fighting back and not your fist.
Establish priorities.
Utilize time well.
Managers are motivators and decision makers with a team spirit.
People is the key to success and not the information.
Donot waste.
Run instead of just walking.
Never make the same mistake twice.
Get a good liberal arts education. The key is to get a solid
grounding in writing, reading and psychology.
Do not fight back with your fist when he is bigger than you.
* Be friendly and shake hands. It isa significant lesson on leadership.
‘* For some people learning salesmanship takes time. One should
practice it repeatedly.
© Unless one has something to compare to hapiness, you will never
know it.
* Bankers will end up owning an individual when he engage in a
capital-intensive business.
d. Jack Welch - known as the “Tiger Woods of Management” who

succeeded Reginald Jones as CEO of General Electric. A learning
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enterprise was also created by Welch wherein he emphasized that there is

aphilosophy_on management and no gospel. When he became the CEO of
General Electric, there are several organizational realities he fixed
according to Young, F. C. (2015).Strategic Management Made
Simple (First). Manila: Rex Publishing Company. pp. 148-149, these are the
following:
© He went on to create a flat management hierarchy because he saw
that GE had too many organizational layers. Various positions were
abolished by him.
© He dealt with the reality of superficial congeniality where on the
surface, people in the company were pleasant but in fact distrustful
and beneath it, with savagery boiling beneath it.
+ His members were challenged by him to action. He created a vision
. which is to be number one or number two, to be the leanest and
lowest in cost and to excel in producing quality products and
services. He coupled the said vision with excellence, quality and
human element. He propagated the strategy, “fix it, sell it, or close it
“which means if small business units were not in rank 1 or 2, the
said businesses should be sold or closed down.
* He called the GE as people factory where he created the vitality curve
which is likea normal curve where employees were classified into A
the top 20, B the vital 70 and C the bottom 10. TheA people possess
the 4Es of GE leadership namely: abilityto ENERGIZE, high ENERGY
levels, ability to ENERGIZE other around the common goals and the
EDGE to make tough yes-and-no decisions and the ability to
consistently EXECUTE and deliver on their promises. All of these
need passion. The Bs are heart and passion of the company. The Cs.
are those who cannot have the work done so must be removed.
* He pursued four major initiatives: engaging in services of their
products, globalization and collaborating in Japan, adopting Six
Sigma and pursuing E-business. Six Sigma refers to a statistical
quality tool which espouses 0/034% waste reduction.
2. ‘Strategy _is monopolistic intellectual capital. As mentioned in the previous

module, strategy is intellectual capital and a competitive advantage which is
created by business organizations to be in the forefront of business and industry.
When this intellectual capital is one-of-a-kind, monopolistic and only one, then it
isa unique strategy.
Strategy is creativity. Creativity is the challenge today for every business

organization. Creativity means that people should have unique attributes:
imagination or a mind's eye which generates bright ideas; inspiration which
motivates people; originality which innovates products, plans and processes
motivates people: originality which innovates products, plans and processes
ingenuity which is markedly resourceful: foresight which is strategic and prudent
and expertise which is highly competent. People with these qualities drive their
organizations to reach broader and higher perspectives, Pulsating
accomplishment environment and pride in the organization are created by these
Kind of people. Creativity is the mind of the strategist. Creativity is strategy and
strategy is creativity.
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A. Guide Questions:
1, Whatare the concepts related to strategy?
2. Cite the steps to be taken in optimizing technology.
Different Perspectives of Strategy
Aside from considering strategy as concept. tool and people, there are also other
ways of looking at strategy. Some managers consider doing business like engaging in a war,
others consider it as playinga game wherein one aims to win.
1. Military Perspective of Strategy

Business boardrooms are like battlefields according to Young F. C.
(2015). Strategic Management Made Simple (First). Manila: Rex Publishing Company.,
pp. 160-165. Engaging in business is like fighting in war where guns and ammunitions
are used as their strategies during any engagement. To further understand this
perspective, let us consider the contents of two popular books written on warfare
Which will enable us to relate business strategyto military strategy. According to the
same author, these are the following:
a The Art of War - This book is written by Sun Tzu who is Chinese in origin. An
oldest military classic in Chinese literature in 400 to 320 BC. Here, Sun Tzu
‘was the commander-in-chief of HO Lu, the King of Wu of China in 500 BC.
Based on this book. Sun Tzu waged and won many battles. Some pieces of
advice which Sun Tzu gave to his military leaders which made them won in
the said battles wherein present business managers can relate and
consider inrunning their own business, according to the same author are
the following:
+ Inplanning
¥ Sun Tzu's writing
War is a matter of importance to the State. It concerns the
lives and deaths of people and has an effect to the survival or
demise ofthe State. Itneeds careful and detailed planning to win,
Course Module
Y Present-day Strategy
Indoing business, itis necessary
to have a thorough planning.
If there will be no planning, there will be difficulty to attain
success.
* On the business environment

Y Sun Tau's writing
Victory will not be threatened if one know his enemy and
himself. One should know the terrain, weather and there will be
a complete victory.
In any business venture, business organizations should
competently familiarize with its external and internal
environment.
* On measurement
© Sun Tzu's writing
Environment gives birth to measurement and measurement
produces the force estimation. Force estimation provides rise to
plouutes Wie WILE ESUIMGUUL, FULLE EDUNAUUN pruviUes 1198 Ww
calculating number of men which gives rise to weighing strength.
‘Thus, weighing strength gives birth to victory.
Present-day Strategy
Itis a must to have an accurate measurement of performance
such as sales figures, precision in productivity, business expenses
and investments in facilities, technology and others. Knowingits
resources will ensure the achievement of set goals and objectives.
* Oncompetence
Sun Tzu’s writing
Generals should have the following strengths: knowledge,
wisdom. strictness, credibility , courage, benevolence, skillful,
unconcerned by punishment, unconcerned by fame, tranquil,
places army first, obscure, self-discipline, upright and clever with
all-encompassing talents.
Business executives and managers should possess qualities
which epitomize expertise, strong character, leadership, good
values, management skills and ethical standards. Convergence of
traits enable business organizations to attain success.
© Other Lessons
from Sun Tzu
ALINE OEd
fucation
© Sun Tzu's writing #1

“Compare the army of your enemy with yours so as to know
your strengths and weaknesses.”
‘+ Present-day Strategy #1
Change your strategies continuously. There should be
ce
a The Art of War - This book is written by Sun Tzu who is Chinese in origin. An
oldest military classic in Chinese literature in 400 to 320 BC. Here, Sun Tzu
‘was the commander-in-chief of HO Lu, the King of Wu of China in 500 BC.
Based on this book. Sun Tzu waged and won many battles. Some pieces of
advice which Sun Tzu gave to his military leaders which made them won in
the said battles wherein present business managers can relate and
consider inrunning their own business, according to the same author are
the following:
+ Inplanning
¥ Sun Tzu's writing
War is a matter of importance to the State. It concerns the
lives and deaths of people and has an effect to the survival or
demise ofthe State. Itneeds careful and detailed planning to win,
Course Module
Indoing business, itis necessary
to have a thorough planning.
If there will be no planning, there will be difficulty to attain
success.
* On the business environment

Y Sun Tau's writing
Victory will not be threatened if one know his enemy and
himself. One should know the terrain, weather and there will be
a complete victory.
In any business venture, business organizations should
competently familiarize with its external and internal
environment.
* On measurement
© Sun Tzu's writing
Environment gives birth to measurement and measurement
produces the force estimation. Force estimation provides rise to
plouutes Wie WILE ESUIMGUUL, FULLE EDUNAUUN pruviUes 1198 Ww
calculating number of men which gives rise to weighing strength.
‘Thus, weighing strength gives birth to victory.
Itis a must to have an accurate measurement of performance
such as sales figures, precision in productivity, business expenses
and investments in facilities, technology and others. Knowingits
resources will ensure the achievement of set goals and objectives.
* Oncompetence
Sun Tzu’s writing
Generals should have the following strengths: knowledge,
wisdom. strictness, credibility , courage, benevolence, skillful,
unconcerned by punishment, unconcerned by fame, tranquil,
places army first, obscure, self-discipline, upright and clever with
all-encompassing talents.
Business executives and managers should possess qualities
which epitomize expertise, strong character, leadership, good
values, management skills and ethical standards. Convergence of
traits enable business organizations to attain success.
© Other Lessons
from Sun Tzu
ALINE OEd
fucation
© Sun Tzu's writing #1

“Compare the army of your enemy with yours so as to know
your strengths and weaknesses.”
‘+ Present-day Strategy #1
Change your strategies continuously. There should be
ce
Sun Tzu's writing #2
“Whoever is the first in the field will be fresh to await the
enemy. The second will hasten and arrive exhausted.”
Present-day Strategy #2
Tactics whereby one conquers can be seen by all men but
none can see strategy out of which victory evolved.
Sun Tzu's writing #3
‘The result is insubordination when the common soldiers are
too strong and their officers are too weak but the result is collapse
when the common soldiers are too weak and their officers are too
strong.
Present-day Strategy #3
Ifyou attach places which are not defended, you can be sure
of victory.
b. The Book of Five Rings - This book is written by Miyamoto Musashi who is
Japanese in origin. Way of strategy was discussed in this book. According
tothe author, there are four ways by which men pass through life and these are the
following:
‘* Gentlemen and samurai - belonged to highest category and included wealthy
people and officials.
Farmers - next in rank because they provided rice crops.
Artisans or carpenters
Merchants - later rose to prominence because of the wealth they
accumulated.
Musashi considered the said ways by which men pass through life in giving
points on how to run a business specifically in using business strategies to attain
success and according to the same source, these are the following:
Course Module
1. The ‘Way of the Gentlemen Warrior

1, The Way of the Gentlemen Warrior
“To master the virtue of his weapons is the way of the warrior. The gentleman
will not appreciate the benefits of weaponry if he dislikes the strategy.”
Businessman or executive should learn how to appreciate the worth of his,
skills, capabilities and expertise. Resources like capital, people, facilities,
technology, equipment and other assets should be valued by him at his
disposal. This is what valuing means.
2. The Way of the Farmer
Farmer sees springs through autumns with an eye on the changes of the
season using agricultural instruments.
‘A businessman or executive can manage business organization
successfully by being attuned to the changes in the environment with
adequate and valuable information on developments. Thisis what observing
means.
3. The Way of the Carpenter
Tobecome proficientin the utilization ofhis tools is the way of the artisan,
First, to lay his plans with a true measure and then to perform his work
according to plan.
Business organizations have to be expert in the use of business models,
tools and resources such that plans are achievable and accurate. Thus, goals
can be concretized and achieved. This is what doing means.
4. The Way of the Merchant
“The winemaker obtains his ingredients and puts them to use to make his
living, To live by making profits is always the way of the merchant.
Every businessman or executive should optimize his human resources
and potentials. His goal is to create opportunities for growth, to make profit
and to gain every benefit or advantage available. This is what creating means.
2. Game Perspective of Strategy

Strategy can be viewed from the standpoint of playing games which is based on
the mathematical model called game theory. What is game theory? According to
Game Theory (nd). Retrieved December 20,2019, _—_ from
http://www.laits.utexas.edu/~anorman/05/qqgamehtml., game theory refers to
the study of strategy from mathematics perspective. Ina game, decision makers are
called game players. Strategies are the alternatives or options from which the players
‘Management Made Simple (First). Manila: Rex Publishing Company. pp. 168-171,
game theory is essentially linked to neoclassical economics. The concept of
GOOUINE|oes
rationalityis their commonality. Based on the assumption of neoclassical economics,

‘human beings are logical when making economic choices which means that a person
makes a decision in the light of targeting to maximize his rewards. The said rewards
may be in the form of returns or income. Through game strategies, framework for
reality check is given. Games may be classified into those which are played with
different moves and according to the same author these are the following:
1. Games with sequential moves - Sequential moves refer to the steps taken
chronologically where an action is a consequence of a previous move.
2. Games with simultaneous moves - These are taken concurrently under
conditions of imperfect or incomplete information. Here, movement should
be done by the players without the knowledge of what their co-players have
decided to do.
3. Games with strategic moves - these are devices which are applied to work
to one’s advantage. The action should be irreversible and observable to
adopt this mode. Three types of strategic moves can be commitment,
threats and promises. This principle may be applied in situations like
markets, bargaining, auction, competition, labor arbitration and policy
setting which are all important in making the business successful.
Styles in Game Strategies -There are certain styles in undertaking game
strategies and these include rational irrationality, use of surprise, deliberate study of
previous moves undertaken, collection of information, an earnest move to go back to
the root problem, collaborative action. effort to monitor moves, sometimes not doing
anything and abandonment.
In essence, winning and achieving a reward is the focus of game perspective of
strategy. In winning a game, information isa critical component. Game moves can
follow one another, be at the same time or simply smart which are all applicable to
business, wherein different strategies can be formulated, implemented and
evaluated using the said game moves. Dominant strategies give the highest payoff.
Therefore, application of game strategies to business necessitate the use of intuitive
skills, consideration of the environment and utilization of the element of surprise.
3. Economics Perspective of Strategy
Analysis of business strategy from the angle of economics should also be

considered. There are durable principles which are applicable in business nowadays
although different strategic solutions continually evolve due to inevitable growth and
change variables. The said theories or principles can guide business strategists in
Course Module
understanding better how business firms compete, thereby providing them bases
when making decisions strategically. According to the same author, economists
emphasized some adaptive strategy principles in dealing with the different
parameters in economics and these are the following:
A. Conditions
There isa continuous change in the environmental conditions. The said
conditions affect the business evolution form simple to the more complicated.
The product of development is growth so strategies should be sensitive to
developing business conditions.
B. Infrastructure
© Transportation
‘The need to transfer products, services and people accelerated
mobility and development. In any business activity, efficiency delivery,
shipping, hauling, storage of goods, money and services should be
considered in the formulated strategy.
© Communication
In bringing ideas and information to business entities, markets
and agents, communication plays an important role. Provisions for
efficient interaction. transmission and exchange of business
information and ideas should be made by strategies.
* Financing
‘The strategies to be adopted by firms are dictated by the role of
financing. The degree, depth and extent of business strategies are
dependent largely on the business entity's financing component.
* Production technology
Strategies for competitiveness, profitability and cost

effectiveness are largely dependent on the expertise’s sophistication
equipment. process and tool while technology has catalyzed
production.
© Government
‘As business grows in operations and size, government
regulates its activities. Great consideration of government laws,
policies and regulations should be included
in strategies.
B. Guide Questions:
GOMLINE ocd
Strategic Management i
1, What are the different perspectives of strategy?
2. Discuss the military perspective of strategy.
Horizontal and Vertical Boundaries / Strategies of the Firm

1. Vertical Boundaries/Strategies ofthe Firm
A whole range of activities are involved in the production of any product or
ne songs Us auuarnsos ere say vaveM set wie pruuieaeuee Us aiyy yous UE
operation of any service. It starts with the raw material acquisition and ends with
the finished good distribution and sale. Accordingto Young, F.C. (2015). Strategic
Management Made Simple (First). Manila: Rex Publishing Company. page 173, this
is referred to as supply chain management or the vertical chain, Major and support
tasks are present in vertical chain. Examples of major activities may include
production, sales and distribution while support activities may include promotion,
market research and janitorial and security services. The said activities may be
classified as upstream activities which are conducted in the early processes of
vertical chain and under downstream activities when conducted in the latter
stages. There are two choices available for a business firm which are to perform
the activity or buy the activity form specialized providers in the market which are
called market firms.
2. Horizontal Boundaries/Strategies of the Firm

‘There are parameters which consider the horizontal boundaries of company.
The horizontal boundaries of a business include two things and these are the
variety of products and services and the quantity of the products produced and
services rendered. One reason why there are companies which produce same
products but sell them at different prices at reasonable margins of profits may be
in the quantity of products sold. Both economies of scale and scope are generally
present whenever there is large-scale production and marketing due to cost
advantage which affect and even shape strategy decisions in business.
Whats economies of scale? Accordingto the same source, economies of scale
pertains to a condition which is exhibited when the average cost (AC) or the cost
per unit of output declines over a range of output which can be product or service.
For average cost to decline as output increases, the marginal cost or the cost of the
last unit produced should be less than the overall average cost.
Course Module
C. Guide Questions:
‘answers from the provided answer key at the end of this module. There is no need to
1, Whatis supply chain management?
2. Give the horizontal boundaries ofa business.
Framework of Strategy
Question 1: The concepts related to strategy are the following: strategy is intellectual
elasticity: strategy is mindset: strategy is learning; strategy is natural
capital and strategy is intellectual capital.
Question 2: The steps to be taken in optimizing technology are the following:
1. Process improvement
2. Process redesign
3. Process re-engineering
Different Perspectives ofStrategy

Question 1: The different perspectives of strategy are military perspective, game
perspective and economics perspective.
Question 2: Military perspective of strategy states that engaging in business is like
fighting in war where guns and ammunitions are used as their
strategies during any engagement. It emphasized that planning and
thorough knowledge of external and internal environment should
always be considered in running a business. Appreciation the skills,
capabilities and expertise of managers and its people should also be
considered.
Horizontal and Vertical Boundaries / Strategies of the Firm
Question 1: ‘Supply chain management or vertical chain refers to a whole range of
activities wherein the product of any productor operation of any service
are involved. It starts with the raw material acquisition and ends with
the finished good distribution and sale.
Question 2: ‘The horizontal boundaries of a business are the variety of products and
services and the quantity of the products produced and services
rendered.
nal Development Strategic Perspective/Case Analysis
National Development and Strategy
If emphasis is given to strategies by business organizations, individuals and

communities, nation should also give great emphasis to strategies. First, what is a nation?
According to Young, F. C, (2015). Strategic Management Made Simple (First). Manila: Rex
Publishing Company,, p. 188, nation refers to a community of people with similar or
different traditions, beliefs and aspirations who live in the same geographic area, The
population of the said nations engage in different activities like agriculture, trade, mining,
education and research to sustain the everyday living conventional routine. — Good
governance is necessary so as to lend order and direction to these pursuits. Government
isthe institution which is tasked and responsible to do this job. Asa fundamental unit with
given control, ascendancy and dominance, it declares regulations, rules and policies with the
earnest effort to bring about the national development.
According to the same source, national development may mean growth and progress,
maturity or simply improvement. Itis largely dependent on how a country is thrusted and
pushed toward the positive nationwide changes which lead to a better lifefor its people and
competitiveness. Therefore, every country’s success is dependenton a conjunction of two
significant basic components which according to same source are the structure and the
strategy.
Course Module
A, Structure
According to the same author, in governance, structure pertains to the operational
framework which will serve as a basis for national growth and development, Context
is set and agenda on which a nation can drive itself toward national wealth and
prosperity are outlined by the said structure. Plans and programs will be difficult
to actualize without structure. ‘There will be uncertainty in understanding,
implementation, direction, allocation and resource utilization. With structure, action
plans or strategies can be formulated and designed. These schemes are implemented
on the light of spearheading a journey of country toward economic wealth and
progress. Likewise, the different kinds of structure in any country were given by the
same author and these are the following:
1. Political structure ~ pertains to the political system which exist in the country.
When social equality exists, there is democracy, when dictators rule a nation,
there is autocracy; and when control is socialist or collective, there
communism,
2. Economic structure ~ pertains to how business is conducted in a nation, On a
macro level, this includes investment, consumption, trade and government.
Consumption is more than 50% of the gross domestic product in some
developed countries like Europe and United States, and in Japan's trade in
terms of import and export is more than 100% of GDP.
3. Institutional structure -is reflected in the banking system of a country, its
military powers, justice system and the rule of law.
B. Strategy
To achieve national advancement, nations need strategies, To achieve this

successfully, a national structure is needed. Both strategy and structure should be
preferably intercorrelated to create a good fit, In other words, correct and
appropriate correspondence plus accurate combination can create the best outcomes
which can lead to. positive national gains. On a national scale, strategies for
development include the country's policies, resources and the government which sets
goal. In achieving the set goal, policies have to be formulated and enforced. Ground
ules should be set for the people to follow and that is why policy is needed. In this
way, order and efficient policy implementation are ensured. Policies according to
Young, F.C. (2015). Strategic Management Made Simple (First). Manila: Rex Publishing,
Company,, pp.189-193, are both macro and micro in perspectives.
1. Macro Policies
a. Fiscal policy ~'The government's fiscal policy can be any of the following:
‘© Balanced budget- there is enough budget,
Surplus - there is an excess in budget
‘Deficit there is a shortfall in the budget.
Surpluses are achieved and deficits are incurred by the
government depending on their policies on spending. There are
governments which misallocate, mismanage or misspend their funds.
They prioritize projects which ado not generate fiscal gains sometimes.
Governments can reduce spending, generate higher incomes through
business investments or increase taxes. For instance, the Philippine
government asked the Congress to pass a law which would increase the
value-added tax from 10-12% so as to reduce its budget deficit,
Likewise, all governments would like to have a surplus in their budgets
so that health care systems, infrastructure projects, education and other
important government services can be provided to people.
b. Monetary policy- is fiscal policy's important complement. The purpose

of setting monetary policies by the country’s central bank is to possibly
make the supply of money at a given rate grow. One way of generating
enough money for financing the nation’s economic growth of a nation is
by the government engagement in buying and selling of treasury bills to
the public. Government makes sure that the inflation rate is managed
properly and maintained at single digit.
© Policy on exchange rate - Another macro concern is the policy on
exchange rate. Some countries allow their currency to freely float at
market rates but others fix or control their currency rates to prevent
depreciation or undue appreciation. There are reasons for some nations
in adopting either market or fixed based exchange rate. Appreciating
exchange rate may mean making commodities more expensive, exports
less profitable and higher demands for wages. How about depreciating
the currency rate? It may mean purchasing expensive raw materials and
imported goods.
. Income policy- Prices and wages are directly affected by the country’s
income policy. Adirect correlation between prices and wages is present.
When there is a price increase, a demand for higher wages is present.
When there is a wage increase, increase of prices of goods is present too.
This situation is a chicken-and-egg cycle where nobody can pinpoint
which of the two comes first. Therefore, the government should reach a
level where both wages and prices are managed in such a way that no
destabilizing impact is minimized or created. In many cases, the
government subsidizes the price differences. For instance, 1 kilo of rice
is sold to customers at Php 35 when in fact the current price ranges from
Php40-45.
2. Micro Polici
a. Trade policy - Use of tariffs. quotas and other trade contracts which may
carry certain restrictions and limitations make up the trade policy ofa
country. The more popular trade agreements are the AFTA (Asean Free
Trade Area), NAFTA (North American Free Trade Agreement) and WTO
(World Trade Organization). Tariffs were to be gradually lowered on
imported products in the said agreements. 100-200% tariffs were
gradually decreased to 10 to 5 percent and eventually will end up to zero
tax. The said trade policies are attractive to developed nations but more
disadvantageous to developing countries like the Philippines. For
instance, some imported goods come in less expensive to the point of
“killing” local goods. As a result, some local companies will opt to close
shop because of the inabilityto compete with the imported good pricing.
b. Foreign direct investments - Economic development is brought about the
foreign direct investments or investments from sources outsidea nation.
Jobs are generated and business is energized because of infused capital.
Almost all countries welcome the said financial outlays. To entice
foreign investors to engage in business activities, infrastructure projects,
and other national undertakings, attractive business packages and
financial incentives are given. To achieve these trade exhibits are setup,
trade missions are sent and trade negotiations are closed.
Policy on privatization or nationalization - With regards to privatization,
the government may come up with the said policy if the acquired
business of the government were not managed effectively and efficiently
by civil servants, Privatization pertainsto selling of government owned
business to individuals other than the government. Meanwhile, a
government may also decide to buy, take over or confiscate an
enterprise and manage it. Thisis what nationalization means. There are
specific reasons for nationalization and these include making sure there
is equity, controlling or seeing to it that there is no shortage.
. Economic policies -To ensure that the nation’s financial system is sound
and that it is able to provide education, livelihood, welfare and quality of
life for its people. Food security is the reason why nations invest on
agriculture. Other strategies include investing in alternative sources of
power, creating economies in different regions, using RORO orts and
boats, promoting entrepreneurship and searching for new markets for
overseas employment.
e. Competition policy - this policy emphasizes on the development of
natural and human resources. In anation, people are the greatest source
of productivity and to make sure that they are competitive, a country
should make sure that quality education is provided to its people.
Intelligent, hardworking and nationalistic people drive a country
toward material prosperity. Thus the emphasis is on knowledge
workers, information technology competence, speaking of global
language seafaring and tourism skills, competence, leadership and
managerial effectiveness and positive personal qualities. A degree of
competitive advantage is created in people through this policy.
GOMLINE ed
National Development Strategic Perspective/Case Analysis
Subsidy policy - To help the population, subsidy policy is used. To make

prices affordable, the government shoulders a part of it. In certain
instances, when the country has surplus or ithas funds for such support,
a country can do it.
3. Resources ~ Resources are the most important competitiveness supply.
Resources can make or unmake a nation at the same time can bring them to
prosperity and dearth according to Young, F. C. (2015). Strategic Management
Made Simple (First). Manila: Rex Publishing Company. page 194.
a. Natural resources - consist of arable land, energy fuels, minerals aside
from forest land and aquatic life. To give people a better life, the said
resources should be harnessed.
b. Human resources - include a population with adequate education and
are healthy and high skilled.
Technology - another resource which contribute to national
advancement and these may include advances in science, research and
development, information technology, communication, medicine and
manufacturing.
4. Capital - Capital which is according to CAPITAL: definition in the
Cambridge English Dictionary. (n.d). Retrieved December 23, 2019, from
refers to possessions and money which is used in producing wealth or
used in starting and operating a business should be invested wisely. If
invested wisely according to Young, F. C. (2015). Strategic Management
Made Simple (First). Manila: Rex Publishing Company., page 194 can
provide a better standard ofliving, can generate more employment and
bring about an efficient exchange of goods, wealth and series.
A. Guide Questions:
Answer the following to check what you learned from the discussionsso far. Check
Your answers from the provided answer key at the end of this module. There is
no need to submit your answers to OEd.
1. Ingovernance, what is structure? What are the different kinds of
structure in any country?
2. Differentiate surplus from deficit.
Course Module
Writing and Conducting Case Analysis
Conducting Case Analysis
Let us begin with the term, “case”. According to Young, F. C. (2015). Strategic
Management Made Simple (First). Manila: Rex Publishing Company., page 204, case
refers to a situation which requires a decision. This may be technical, business or
administrative in nature. _ Cases may be a presentation of interrelated information,
an enumeration of factual data, an indication of pressing problems or pointing out of
critical issues and urgent concerns. To resolve a case, a method which involved a
logical, formal and systematic process which is called case method is considered to
resolve a case. The said method, various cognitive activities are involved and these
are the analysis, interpretation and synthesis of situations and facts. Specifically, same
source emphasized that the case method strives to do the following:
1. Develop the individual's ability to investigate minute details which are
important to organization ;
2. Improve the individual's analytical adeptness, problem solving skills and critical
thinking:
3. Develop the abilityof the individual to make relevant decisions which are based
on factual data in the context of the environment - organizational , local and
global;
4. Provide opportunity to make competent proactive plans.
Moreover, according to the same source, there are important point to consider
so.as_ to come up with a good case analysis, and these are the following:
41. Clearly understand what the case is all about. It is essential to identify the
basic concerns, issues or problems.
2. Careful investigation of the supporting facts, exhibits and appendices should be
considered.
3. Case analysis should be conducted in the context of prevailing situation.
4. In the solution ofa case, objectivity
is required.
5. Itis helpful to underline important facts and take down notes to aid the
individual understand and analyze the case.
Components of Case Analysis

The different components of case analysis according to Young, F. C.
(2015). Strategic Management Made Simple (First). Manila: Rex Publishing Company.,
pp. 205-207 are the following:
1. Title of the Case
- the name of the case
2. Time Context - this refers to the duration of the case. All cases have to be
probed and solved with time as a significant consideration. In some situations,
what is considered as advantageous, practical, significant and best today may
not have been 25 years ago. In solving a case, stating the specific period is
necessary.
3. Perspective - One should state specifically from whose point of view he/she is
looking at the case in analyzing and solving the case. The standpoint chosen
by individual should be of someone competent, credible and with the rightful
power and authority to make decisions. The outlook of an outsider will never
be acceptable.
4. Central Issue - Every case involves a situation or problem which requires a
corresponding course of action or solution. In clearly identifying the root or
real issue, care should taken because there is alot of issues which may be trivial
or insignificant. A central issue pertains to a condition which necessitates a
resolution. It may be an uncertainty, dilemma or simplya major concern which
needs to be solved, but not necessarily to be corrected. Sometimes, only
enhancements, realignments and improvements are needed. In taking course of
action, there are steps to follow and according to the same source and these are
the following:
a. Analyze the central issue. Facts which brought about this concern
should be looked into and one way of doing this is by discovering obvious
signs which are worth analyzing like increase in the number of
complaints and rejects, decrease in number of customers and sales,
outmoded equipment and facilities, lack of financial resources,
inefficiency of employees and other concerns in organization. Likewise,
the same source cited the five major aspects of the said organizational
concerns and these are the following:
‘* Labor- refers to human resources of business organization.
Materials - refer to supplies and raw materials.
Methodology - pertains to process
Machinery - refers to facilities and equipment
Money - refers to compensation, incentives and benefits.
b. Look for other related details - the people involved, the cost
considerations, gravity degree of the issue or problem, the operational,
managerial, financial, technological, human resources or environmental
implications.
c. Prioritize problems or issues according to impact on the business
organization and according to the degree of urgency, importance and
criticality. Same source name the different classifications of impact ad
these are
© 5-toavery greatextent
4-to a great extent
3-toa moderated extent
2-to a least extent
1-toa very least extent
Concerns or issues are urgent when there is a need to attend to
the said issues immediately. Problems are considered as important
because they have to be addressed and finally, issues are considered
critical when the organization, department or individual is less or not
capable to address them all.
Statement of Objectives - this part enumerates the specific intentions to be
achieved. It aids to identify the alternative courses of action may be taken to
solve the case. Set objectives should be SMART - specific, measurable,
attainable, realistic and time-bound.
6 ‘Areas of Consideration: Internal and External Environment - these pertain to
the facts of the case. These are the paramount elements in the environment -
organizational, local and even global which may have contributed to the issue
or may have been the root cause of the central issue itself. These are related
{in one way or another to any of the different organizational functional areas like
production, finance, marketing, operations or human resource. A SWOT
analysis is recommended to make the analysis more complete and
comprehensive.
Alternative Courses of Action - One comes up with alternative courses of action
once the areas of consideration have been analyzed. An Alternative refers to an
choice to make or option to take. According to the same author, the following
are the characteristics of alternative courses of action :
‘© These are mutually exclusive no over overlaps or redundancies; these
are independent of each other.
These specify the period.
‘These are relevant. realistic and appropriate.
Decision Matrix ~ After enumerating the alternative courses of action, one may
comes up with a decision matrix wherein a decision which refers to resolution,
judgment or conclusion to make should be seen after accomplishing
the decision
matrix. To justify the conclusion, a standardized point of reference can be
applied in competently arriving ata decision. A good criterion is a combination
of relevant measures like the risk involved if one has to choose a particular
course of action, the cost involved to implement the decision and the benefits
derived and finally the ease of implementation. A rating scale from 1 to 5 is
utilized with the five being the highest and one, the lowest in assessing each
alternative course of action.
© Forrisks, Sis the least and 1 is the most risky
+ For costs, 5 is the least and 1is the most costly
‘* For benefits derived, 5 is the most and 1 is the least beneficial
‘* For the ease of implementation, 5 is the easiest and 1 is the most difficult
9. Conclusion ~The one which yields the highest accumulated point score should
be chosen and implement as the solution of the issue or problem in the case
study.
10. Recommendations - The corresponding recommendation should be given and
stated clearly after completing the evaluation and arriving at a conclusion.
Accordingto RECOMMENDATION: definition in the Cambridge English Dictionary.
5 oes
Saou Strategic Management 5
National Development Strategic Perspective/Case Analysis
(na). Retrieved December 25, 2019, from

recommendation refers to advice what
is the best thing to do or consider to make
a particular conclusion more effective and efficient.
11. Action plan - Your recommendation should have an accompanying action plan.
According to Young, F. C. (2015). Strategic Management Made Simple (First).
Manila: Rex Publishing Company., page 207, action plan refers to a program of
activities which includes the following:
‘* Activities to be implemented
Objectives to attain
Department, division or unit involved
Person/s responsible
The cost involved
Other resources needed
Timetable
Gant Chart should be considered too in preparing an action plan. It is an

operational calendar of activities which shows the specific time frame for each
activity. The said activities are expressed in terms of number of days, weeks, months
and even years. Through Gantt chart. concreate time bound monitoring of progress,
concrete evaluation and completion of stated activities are ensured. The
inefficiencies and bottlenecks which cause non-completion can be pinpointed
through Gantt Chart. Likewise, successful advancement and conclusion of jobs well
done can be shown too through Gantt Chart.
Strategic Analysis
Aside from understanding the basic concepts of strategic management, one
should also learn how to apply its approaches and principles. Strategic analysis is a
powerful tool of competitiveness when smartly and appropriately applied. Doing
strategic analysis should be holistic. According to Young, F. C. (2015). Strategic
Management Made Simple (First). Manila: Rex Publishing Company. there are phases
or steps involved in doing strategic analysis and these are the following:
1. Industry analysis. It is a cognitive approach _ wherein business environment
where the company is part of is evaluated. Using Porter's Five Forces of
Competition isthe best way to conduct an industry analysis. Bargaining power
of customers, bargaining power of suppliers, ease of entry of new firms,
availability of substitute products and rivalry among existing firms are the
parameters of the said tool. . There are some issues which an help one make a
Course Module
significant industry analysis and according to the same source, these are the
following:
‘© Whoare the consumers? In terms of their buying capabilities, have they
changed?
* Do you have very powerful suppliers? Did they change their prices or
depreciated in quality which make their products and services les
attractive to customers?
‘+ Whoare the competitors and what are their present market shares/ Are
you a challenger, a market leader ofa follower?
+ Isthere anyone who easily engage in the same business line as yours?
Does the industry have trade associations which can help, if not protect,
the smaller ones?
the smaller ones?
+ Are your products and services still important or have they outgrown
their significance?
‘Is the industry regulated to prevent a competition which is unethical
one?
‘* Asa whole, is the industry growing? How fast is it growing? Can the
industry supply the demand for such products?
‘+ What are the steps to take so as to address this dismal situation if the
industry is declining?
Likewise, key success factors which refer to variables that are importantin
realizing company’s set goals. The said key factors according to the same source are
the following:
‘Satisfying customer requirements - Customer requirements should be
satisfied. The wants, needs and even demands continue to become
challenging and mature. Because of that fact, companies have to be
proactive and alertto these changes. The most needed to get the feel of
changing breaking point is the external intelligence.
‘* Meeting competitive factors - Customers in a customer-oriented
environment expect more than minimum requirements. They expect
efficient service, quality goods , speed in serving customer , attractive
packaging, cheaper prices and valuable after-services which when met
will promote better relationship toward customers.
‘© Obeying and respecting business regulations /industry standards in the
business - In doing business, it is important the government procedures
and industry directives are followed.
‘© Satisfying resource requirements to implement competitive strategy -
Resource requirements are becoming more difficultto satisfy because of
the demands of doing business. For instance, due to global demands
labor resources are harder to find. More capital investments are
required by competition: prices are brought down by the economies of
scale, and policies on expansion have become more urgent. Doing
business becomes tougher in one global market because of the reality of
hyper competition.
* Technical and technological requirements - Requirements on technical
and technological aspects place undue demands on doing business,
information technology has become commonplace, product
development has become faster. In business, research development has
became a necessary component.
2. Strategic analysis. Accordingto the same author, business strategic analysis

refers to the reviewing process of the strategic goals set by the company, the
skills and capabilities of its people resources, the strategies formulated and the
performance metrics established.
3. External auditof the environment. External environment of business such as
the social, economic, political environmental and technological forces or factors
may or may not have an influence a company. That is why PEST analysis can be
undertaken to have the said external audit of the environment. Those forces
which affect the company should be taken into consideration.
Strategy evaluation. it refers to the assessment of the strategies implemented
including the enumeration of critical issues and determination of competitive
advantage of company. if possible. There are ways on how to do the evaluation
according to the same author and these are the following:
‘+ Application of SWOT ANALYSIS
‘© Balanced scorecard
‘* Determination of the competitive advantage of company.
5. Recommendation. itrefersto rewriting reformulation or reinforcement of the
objectives of company followed by the respective strategies which will bring
about a more competitive and consequential company.
B. Guide Questions:
Answer the following to check what you learned from the discussionsso far. Check
Your answers from the provided answer key at the end of this module. There is
no need to submit your answersto OEd.
1. Enumerate the components of case analysis.
2. Whatis strategic analysis? Give the different phases involved in strategic
analysis.
National Development and Strategy
Question 1: In governance, structure pertains to the operational framework which
will serve as a basis for national growth and development.
Question 2: Surplus is present when there is an excess in budget and deficit is
present when there is a shortfall in the budget.
Writing and Conducting Case Analysis
Question 1: The different components of case analysis are the following: title of the
case, time context, perspective, central issue, statement of objectives,
areas of consideration, alternative courses of action, decision matrix,
conclusions, recommendations and action plan.
Question 2; Strategic analysis refers to powerful tool of competitiveness when
smartly and appropriately applied. The different phases involved in
strategic analysis are industry analysis, strategic analysis, external
audit of environment. strategy evaluation and recommendation.
References and Supplementary Materials

Books and Journals
41. Hill, Charles W. L. et. Al. ((2015). Strategic Management: Theory (Eleventh). US.A.:
Cengage Learning.
2. Young, F.C. (2015). Strategic Management Made Simple (First). Manila: Rex Publishing
Company.
3. CAPITAL: definition in the Cambridge English Dictionary. (n.d). Retrieved December
23, 2019, from https://dictionary.cambridge.org/us/dictionary/english/capital.
4, RECOMMENDATION: definition in the Cambridge English Dictionary. (n.d.). Retrieved
December 25, 2019, from
IS: is ridge.o1 ior (er (rec ndation.
Online Supplementary Reading Materials

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Strategic Control and Monitoring

A. Types of strategic control according to purpose:

Implementation control - is applied to assess if there is a consistency on the

B. Types of strategic control according to process:

3. Feedback strategic control ~ a combination of sequential and interactive approaches.

Y Asset Turnover - Turnover generated from every P1 of assets

Y Payables (creditor)period - With this measure, the average

Incerese cover = erating profit

4. Other investor's measures

Ef ficiency ratio = Expenses x100

Y Operating profit margin - a measurement of what proportion of the

C. Market Performance -through market performance metrics, feedback can be

Y Marketing return on sales (ROS) - a marketing profitability metric which

D. People Performance ~ Productivity/efficiency and effectiveness are relevantly

¥ Leadership index- measures leadership in the management ability so as

Strategic Incentive Management

Define change strategy - involves identifying alternatives for reaching the

Organizational Issues and Contingency

Strategic Control and Mechanism

Aside from these, Wright, T. (n.d.). How to Implement

HISTORY OF BALANCED SCORECARD

value through investment in customers, employees, supplies, technology, processes and

FOUR PERSPECTIVES OF THE BALANCED SCORECARD

Four Perspectives of the Balanced Scorecard

customer |¢{ Years [ol itera

Figure 1 - Balanced Scorecard Perspectives

The balanced scorecard according to Balanced Scorecard (Kaplan & Norton):

Learning and growth perspective - this includes training of employees and

How should a balanced scorecard be implemented effectively? According to the same

Figure 2 - Balanced Scorecard as a Process

Graton OC Strategic Management 5

Answers to the Guide Questions

Balanced scorecard can also pertains to to a management system

However, some of its drawbacks are the following:

Framework ofa Strategy

Strategies are implemented by individuals in their personal lives and in workplace.

It was emphasized that both economic and environmental priorities are

. Strategy is intellectual capital. Strategy is an intellectual capital in a closer

2. Strategy as balanced scorecard. The ability to quantify performance is a competitive

to astrategy template which illustrates four significant perspectives for performance

‘The said perspectives need

leadership, monopolistic intellectual capital and creativity. They are managers,

b. Harold Geneen - After Sloan, Geneen is said to be the greatest business

€. Lee Lacocca - In management and leadership, Lacocca is one of the most.

d. Jack Welch - known as the “Tiger Woods of Management” who

enterprise was also created by Welch wherein he emphasized that there is

2. ‘Strategy _is monopolistic intellectual capital. As mentioned in the previous

Strategy is creativity. Creativity is the challenge today for every business

Different Perspectives of Strategy

1. Military Perspective of Strategy

* On the business environment

© Sun Tzu's writing #1

* On the business environment

© Sun Tzu's writing #1

1. The ‘Way of the Gentlemen Warrior

2. Game Perspective of Strategy

rationalityis their commonality. Based on the assumption of neoclassical economics,

3. Economics Perspective of Strategy

Analysis of business strategy from the angle of economics should also be

Strategies for competitiveness, profitability and cost

Horizontal and Vertical Boundaries / Strategies of the Firm

2. Horizontal Boundaries/Strategies of the Firm

Different Perspectives ofStrategy