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Chap001 MGT-331
Chap001 MGT-331
Chapter 1
McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
1. Explain the concept of strategic management
2. Describe how strategic decisions differ from other
decisions that managers make
3. Name the benefits and risks of a participative
approach to strategic decision making
4. Understand the types of strategic decisions for which
different managers are responsible
5. Describe a comprehensive model of strategic decision
making
6. Appreciate the importance of strategic management
as a process
7. Give examples of strategic decisions that companies
have recently made
1-3
The Nature and Value of Strategic
Management
Strategic management:
The set of decisions and actions that result
in formulation and implementation of
plans designed to achieve a company’s
objectives
1-4
Nine Critical Tasks of Strategic
Management -- Tasks 1-5:
Formulate the company’s mission
Conduct an internal analysis
Assess the external environment –
competitive and general contexts
Analyze the company’s options by
matching its resources with the external
environment
Identify the most desirable options in
light of the mission
1-5
Nine Critical Tasks of Strategic
Management -- Tasks 6-9:
Select a set of long-term objectives and
grand strategies that will achieve the most
desirable options
Develop annual objectives and short-term
strategies that are compatible with long-
term objectives and grand strategies
Implement the strategic choices
Evaluate the success of the strategic
process for future decision making
1-6
What is Strategy?
1-7
Dimensions of Strategic Decisions
Strategic issues require top-
management decisions
Strategic decisions over-arch several
areas of a firm’s operations
Usually only top management has
the perspective needed to understand
their broad implications
Usually only top managers have the
power to authorize necessary
resource allocations
1-8
Dimensions of Strategic Decisions
(contd.)
1-9
Dimensions of Strategic Decisions
(contd.)
1-10
Dimensions of Strategic Decisions
(contd.)
1-11
Dimensions of Strategic Decisions
(contd.)
1-12
Dimensions of Strategic Decisions
(contd.)
1-13
Three Levels of Strategy
1-15
Characteristics of Strategic
Management Decisions: Corporate
1-17
Characteristics of Strategic
Management Decisions: Business
1-18
Formality in Strategic Management
1-19
Forces Determining Formality
1-20
Three Modes of Formality
1-21
Strategy Makers
1-24
Risks of Strategic Management
1-25
Strategic Management Process
1-26
Strategic Management
Model
1-27
Components of Strategic
Management Model
Company Mission Internal Analysis
External Analysis Strategic Analysis &
Choice
Long-Term Objectives
Generic & Grand
Short-Term Objectives Strategies
Policies Empowering Functional Tactics
Action Restructuring,
Strategic Control & Reengineering &
Continuous Refocusing
Improvement
1-28