S T R AT E G I C

MANAGEMENT
 STRATEGY
The tasks of crafting, implementing, and executing company
strategies are the heart and soul of managing a business
enterprise.

A company’s strategy is the game plan management is using to

stake out a market position, conduct its operations, attract
and please customers, compete successfully, and achieve
organizational objectives.
-Thompson, Strickland, Gamble
 A strategy entails managerial choices
among alternatives and signals
organizational commitment to
STRATEGY specific markets, competitive
approaches, and ways of operating.
-Thompson, Strickland, Gamble
 • Management’s plan for making money in a
particular business.

• A company’s business model deals with

the revenue-cost-profit economics of its
BUSINESS strategy – the actual and projected
revenue streams generated by the
MODEL company’s product offerings and
competitive approaches, the associated
cost structure and profit margins, and the
resulting earnings stream and return on
investment.
-Thompson, Strickland, Gamble
 • Strategy relates to a company’s
competitive initiatives and business
DIFFERENCE approaches (irrespective of the financial
BETWEEN A and competitive outcomes it produces).
COMPANY’S
STRATEGY AND • Business model deals with whether the
ITS BUSINESS revenues and costs flowing from the
MODEL strategy demonstrate business viability.
- Thompson, Strickland, Gamble
 MOST TRUSTWORTHY SIGNS OF
GOOD MANAGEMENT
• Good strategy

• Good strategy execution

- Thompson, Strickland, Gamble

 STRATEGIC MANAGEMENT
• Strategic management refers to the
managerial process of forming a strategic
vision, setting objectives, crafting a
strategy, implementing and executing the
strategy, and then over time initiating
whatever corrective adjustments in the
vision, objectives, strategy, and execution
are deemed appropriate.
- Thompson, Strickland, Gamble
 FIVE TASKS OF
STRATEGIC MANAGEMENT

Task 1 - Developing a Strategic Vision and Mission

Task 2 - Setting Objectives

Task 3 - Crafting A Strategy To Achieving The

Objectives

Task 4 - Implementing And Executing The Strategy

Task 5 - Evaluating Performance, Monitoring New

Developments, And Initiating Corrective
Adjustments
 THE FIVE TASKS

Task Task Task Task Task

1 2 3 4 5

Improve/ Improve/ Recycle

Revise as Revise as Change Change to Tasks 1,
Needed Needed as as 2, 3, or 4
Needed Needed as needed
 The Management Control Process
Strategic
Planning

Revise Budget Financial Planning/

Evaluation
Budgeting

Implementation
Reporting

BENJAMIN A I. ESPIRITU (1997)

All Rights Reserved
Task 1 - Developing a Strategic Vision and Mission

DEFINITION OF VISION

✓ A clear, measurable and challenging description of a

desired future goal around which an organization can
direct its program of work.

✓ An image of how we see our purpose unfolding

✓ A picture of the preferred future we seek to create

✓ An answer to the question “What do we really want?”

 WHAT IS A VISION?
BENEFITS OF A VISION

CREATES INSPIRES

DREAMS PEOPLE

PAINTS
PROVIDES
FUTURE
FOCUS
ENVIRONMENT
 WHAT IS A VISION?
QUALITIES OF A VISION
v It motivates, inspires

v It is a stretch, moves towards greatness

v It is clear, concrete

v It is achievable, not a fantasy

v It fits with the highest values

v It is easy to communicate
SAMPLE VISION STATEMENT
- INTEL
“Our vision: Getting to a billion
connected computers
worldwide, millions of servers,
and trillions of dollars of e-
commerce.”
SAMPLE VISION STATEMENT-
MICROSOFT

• “A computer on every desk and in every home

using great software as an empowering tool.”

• “Empower people through great software

anytime, anyplace, and on any device.” (1999)
 TUP: A premier state
university with recognized
excellence in engineering
TUP VISION
and technology education at
par with leading universities
in the ASEAN region.
 Task 1 - Developing a Strategic Vision and Mission

THE MISSION STATEMENT

DEFINITION

Mission is the organization’s driving purpose for

existence usually specified in terms of mandate and
principal products and services; people it serves; and
key elements of the organization’s philosophy.
 WHY IS A MISSION
STATEMENT IMPORTANT?
• Defines what the organization means for us.
• Distinguishes the organization from other
organizations.
• Directs ventures. It may exclude some activities and
yet still allow for creative growth.
• Serves as a framework for evaluating current and
prospective activities.
 COMPONENTS OF
MISSION STATEMENTS
1. A description of the mandate of the
organization
2. The mission of the organization,
sometimes described as a short and
powerful strategic intent
3. The organization’s key strengths
4. Broad strategies to be pursued in order
to achieve the mission
5. The values the organization adheres to
in pursuit of its mission
SAMPLE MISSION STATEMENT – OTIS
ELEVATOR; AVIS RENT-A-CAR
• “Our mission is to provide any customer a
means of moving people and things up,
down, and sideways over short distances
with higher reliability than any similar
enterprise in the world.”

• “Our business is renting cars. Our mission

is total customer satisfaction.”
 TUP MISSION
• The mission of TUP is stated in Section 2 of P.D. No.
1518 as follows:
The University shall provide higher and advanced
vocational, technical, industrial, technological and
professional education and training in industries and
technology, and in practical arts leading to
certificates, diplomas and degrees. It shall provide
progressive leadership in applied research,
developmental studies in technical, industrial, and
technological fields and production using indigenous
materials; effect technology transfer in the
countryside; and assist in the development of small-
and-medium scale industries in identified growth
centers.
 Task 1 - Developing a Strategic Vision and Mission

CORE VALUES

DEFINITION OF VALUES
v enduring standards of what is worthwhile which
serve to guide behavior in meeting objectives, in
dealing with the people the organization serves
(clients), colleagues and others
v reflect the way the organization will achieve its
mission
v can be a source of strength if consistent with
strategies
v enduring beliefs that a specific mode of conduct or
end-state of existence is personally or socially
preferable to an opposite or converse mode of
conduct or end-state of existence
ORGANIZATION WITH
ALIGNED VALUES

Vision
ORGANIZATION WITH
MIS-ALIGNED VALUES

Vision
JPMorgan Chase

Values:

Behaviors and principles that describe what

we stand for – integrity and respect – and

what we deliver – excellence and innovation.

• Integrity
Striving at all times to do what’s right
and adhere to the highest ethical standards.

• Respect
Valuing the perspectives and expertise of all to
surface the best ideas and insights.

• Excellence
Achieving high-quality results by continuous
improvement and superb execution.

• Innovation
Going beyond the commonplace to break new
ground.
 TUP CORE VALUES
• T - Transparent and participatory governance
• U - Unity in the pursuit of TUP mission, goals, and objectives
• P - Professionalism in the discharge of quality service
• I - Integrity and commitment to maintain the good name of the University
• A - Accountability for individual and organizational quality performance
• N - Nationalism through tangible contribution to the rapid economic growth of
the country
• S - Shared responsibility, hardwork, and resourcefulness in compliance to the
mandates of the university
VISION
“What we want to be”
The organization’s dream

MISSION
“Why we exist”
The organization’s purpose in life

SHARED VALUES
“How we do things”
Widely shared beliefs that guide behavior
Task 1 - Developing a Strategic Vision and Mission

COMPETENCIES
A broad - based grouping of knowledge, skills,
behaviors, attributes and values that support
superior performance.

CORE COMPETENCIES
– distinctive, differentiating competencies of the
organization
– the collective competencies of the organization’s
workforce
 COMPETENCIES
• A competence is something an organization is
good at doing.
• A core competence is a proficiently performed
internal activity that is central to a company’s
strength and competitiveness.
• A distinctive competence is a competitively
valuable activity that a company performs better
than its rivals.
-Thompson, Strickland, Gamble
EXAMPLES of CORE COMPETENCIES
• Customer focus
Accurate in-depth understanding of customer’s
unique challenges and needs and wants in order to
build effective partnerships.

• Marketing information management

Effectively collect, analyze and disseminate
information regarding marketing strategies and
customer needs (including demand forecasting).

• Technology leveraging
Use technology to improve effectiveness and
efficiency. (Organization/Employee Competency Dictionary)
VISION

MISSION

VALUES COMPETENCIES
 Task 2 – Setting Objectives

GOAL / OBJECTIVE
SETTING
OBJECTIVES

The targeted goals of an

organization towards which

resources and efforts are

channeled.
Stoner and Wankel
GOOD OBJECTIVES ARE:

➢S pecific

➢M easurable ➢C ommunicated

➢A chievable ➢O wned

➢R elevant ➢W ritten

➢T ime-bound
 GOOD OBJECTIVES VS. DEFICIENT
OBJECTIVES
Sample of deficient objective:
“To increase income.”

Proper objective setting:

"To increase interest income from
housing loans by 10% in calendar year
2008.”
GOOD OBJECTIVES VS.
DEFICIENT OBJECTIVES

Deficient “To train accounting personnel.”

objective:

Proper “To train accounting personnel on the computerized

accounting system - 25% by the end of February; 25% by the
objective end of April; 25% by the end of June; and the remaining 25% by
setting: the end of August.”
STRATEGIC OBJECTIVES

A BIGGER MARKET QUICKER DESIGN- HIGHER PRODUCT LOWER COSTS

SHARE TO-MARKET TIMES QUALITY THAN RELATIVE TO KEY
THAN RIVALS RIVALS COMPETITORS

SUPERIOR ON-TIME SUPERIOR WIDER GEOGRAPHIC RECOGNITION AS A

DELIVERY CUSTOMER SERVICE COVERAGE THAN LEADER IN
COMPARED TO RIVALS TECHNOLOGY
RIVALS AND/OR PRODUCT
INNOVATION
 FINANCIAL OBJECTIVES
• Growth in revenues
• Growth in earnings
• Higher dividends
• Bigger profit margins
• Higher returns on invested capital
• Strong bond and credit ratings
• Bigger cash flows
• Stable earnings during periods of recession
 • The surest path to
sustained future
WHICH TAKE
PRECEDENCE – profitability year after year
STRATEGIC OR is to pursue strategic
FINANCIAL
OBJECTIVES?
actions that strengthen a
company’s competitive and
business position.
 • Objectives should
be set high enough
to produce
ORGANIZATIONAL outcomes at least
STRETCH incrementally
better than
current
performance.