BACARAT, NORODEN P.

BS - ACCOUNTANCY

MGT 104 (Strategic Management)

QUIZ/ ASSIGNMENT #1

Answer the following questions:

1. What is Strategic Management?
 Strategic management is the process of establishing goals, procedures, and objectives to
increase the competitiveness of a company or organization. Strategic management
typically considers how to best deploy staff and resources to achieve these objectives.

2. What are the three (3) Stages of Strategic management process?

 Strategy formulation - is the process of defining an organization's mission and
objectives, as well as selecting among alternative strategies. Strategy formulation is also
known as "strategic planning" at times.
 Strategy implementation - is the strategic management action stage. It refers to
decisions made to implement new strategies or strengthen existing ones. The basic
strategy – implementation activities include setting annual goals, developing policies, and
allocating resources. Strategy implementation also entails making decisions about how to
align strategy and organizational structure, as well as developing budgets and
motivational systems.
 Strategy evaluation and control. - Because internal and external factors are constantly
changing, all strategies are subject to future modification. Managers determine whether
the chosen strategy is achieving the organization's objectives during the strategy
evaluation and control process. The basic strategy evaluation and control activities are as
follows: reviewing internal and external factors that serve as the foundation for current
strategies, measuring performance, and taking corrective actions.

3. Define the following key terms:

a. Competitive - The goal of strategic management is to gain and maintain a competitive
advantage. This term refers to any activity that a firm performs particularly well in
comparison to activities performed by rival firms, or any resource that a firm possesses that
rival firms desire. Having fewer fixed assets than competitors can provide significant
competitive advantages.
b. Strategists - Individuals involved in the strategic management process are known as
strategists. Strategic decisions may involve several levels of management. The board of
directors, president, chief executive officer, chief operating officer, and division managers, on
the other hand, are in charge of major strategic decisions.
c. Vision - Many businesses today create a vision statement to answer the question, "What do
we want to become?" "Creating a vision statement is frequently regarded as the first step in
strategic planning, preceding even the creation of a mission statement."
 d. Mission - The mission of an organization is the distinct reason for its existence that
distinguishes it from all others (A. James, F. Stoner, and Charles Wankel) The mission of an
organization describes why the organization exists and guides what it should be doing. The
mission of an organization is frequently defined in a formal, written mission statement.
Because the mission is intended to guide the entire organization, mission decisions are the
most important strategic decisions.
e. External Opportunities and Threats - It refers to economic, social, cultural, demographic,
environmental, political, legal, governmental, technological, and competitive trends and
events that have the potential to significantly benefit or harm a business in the future.
f. Internal Strength and Weaknesses – Internal strengths and weaknesses are the controllable
activities of an organization that are performed exceptionally well or poorly. They manifest
themselves in a company's management, marketing, finance/accounting,
production/operations, research and development, and management information systems
(MIS) activities. Identifying and evaluating organizational strengths and weaknesses in the
functional areas of a business is an essential strategic-management activity.
g. Long-term objectives - Objectives are specific outcomes that an organization seeks to
achieve in order to carry out its basic mission. Long-term refers to more than a year.
h. Strategies - Strategies are the means by which long-term goals are attained. "A strategy is a
unified, comprehensive, and integrated plan that connects the firm's strategic advantages to
the challenges of the environment, and it is designed to ensure that the enterprise's basic
objectives are met through proper execution by the organization."
i. Annual objectives - Annual objectives are short-term goals that organizations must meet in
order to achieve long-term goals. Annual objectives, like long-term goals, should be
measurable, quantitative, challenging, realistic, consistent, and prioritized.
j. Policies – Policies are the means by which annual goals will be met. Policies are guidelines,
rules, and procedures put in place to help people achieve their goals. Policies serve as
decision-making guides and address recurring or repetitive situations.

4. Distinguish long-range planning and strategic planning.

 Long-range planning is commonly thought to assume present knowledge of future
conditions.
 Strategic planning, However, it is assumed that your organization must be quick to
respond to a dynamic, changing environment, which may necessitate future changes.

5. List reasons why objectives are essential for organizational success?

 Objectives are critical for organizational success because they provide direction, aid in
evaluation, foster synergy, reveal priorities, focus coordination, and serve as the
foundation for effective planning, organizing, motivating, and controlling activities.

6. Why are policies important in strategy implementation?

 Policies are especially important in strategy implementation because they define what an
organization expects from its employees and managers. Policies ensure consistency and
coordination both within and across organizational departments.
7. What are the characteristics of annual objectives?
 Annual goals should be quantifiable, quantitative, challenging, realistic, consistent, and
prioritized.

8. Explain the importance of vision and mission statement.

 Creating a mission and vision statement forces strategists to consider the nature and
scope of current operations, as well as the attractiveness of potential future markets and
activities. A mission and vision statement not only broadens an organization's future
direction, but it also serves as a constant reminder to its employees of why the
organization exists and what the founders envisioned when they risked their fame and
fortune (and names) to bring their dreams to life.

9. Discuss the relationships among objectives, strategies and policies.

 Strategic management is the ongoing planning, monitoring, analysis, and evaluation of all
the resources required by an organization to achieve its goals and objectives. Policies are
typically guidelines that help a company or organization achieve predetermined goals
established by top-level management. Generally, objectives are the endpoints associated
with plans designed to achieve company goals. Policies and business objectives can both
be formulated into plans by a business organization. While the goal is the end result of a
plan, policy is the mode and manner in which each goal is achieved.

10. What are the financial and non-financial benefits of a firm engaging in strategic planning?
 Improves Company Stability - Some management strategies help your company grow
by expanding its opportunities.
 Decreases Your Risk - According to the Corporate Finance Institute, strategic
management should include implementing corporate governance, internal controls, and
policies and procedures that reduce your legal exposure. These may include conflict-of-
interest policies for partners or board members, employee policies, and the use of
external contract audits.
 Improves Brand Management - Just because you can profit from something does not
mean it will benefit your company in the long run. Introducing a new product or
acquiring a company that does not fit with your market image can harm your brand.
Strategic management considers your brand-management objectives and guides you in
every business decision you make. Developing a distinct brand as part of your strategic
management plan will assist you in determining which opportunities will strengthen your
business and which should be avoided.
 Identifies Areas of Need - Strategic management entails assessing the overall company's
and its individual components' strengths, weaknesses, opportunities, and threats.
Identifying these can assist you in identifying issues with your company's product line,
pricing model, distribution channels, online presence, marketing, or staffing.