Strategic Management (8th & 9th Week)

1. What Managers Do in Strategic Management:

• Develop the organization's strategies.
2. Strategies Defined:
• Decisions and actions determining long-run organizational performance.
• Focuses on customer value and profitability.
3. Business Model:
• A strategic design for how a company intends to profit.
4. Importance of Strategic Management:
• Higher organizational performance.
• Adapting to business environment changes.
• Coordination of diverse organizational units.
• Integral to managerial decision-making.
5. Strategic Management Process:
• Step 1: Identifying the organization's mission, goals, and strategies.
• Step 2: External analysis (SWOT: Opportunities and Threats).
• Step 3: Internal analysis (SWOT: Strengths and Weaknesses).
• Step 4: Formulating strategies.
• Step 5: Implementing strategies.
• Step 6: Evaluating results.
6. Types of Organizational Strategies:
• Corporate Strategies: Top management's plan for the entire
organization.
• Levels of Organizational Strategy: Corporate, Business, and Functional.
7. Corporate Growth Strategies:
• Concentration: Focusing on the primary line of business.
• Vertical Integration: Backward and Forward integration.
• Horizontal Integration: Combining operations with competitors.
• Related and Unrelated Diversification.
• Stability Strategy: Maintaining the status quo.
• Renewal Strategies: Addressing organizational weaknesses.
8. Corporate Portfolio Analysis:
• Techniques for strategic decision-making about individual products or
businesses.
• BCG Matrix classification: Cash cows, Stars, Question marks, and Dogs.
9. Competitive Strategy:
• Focus on how an organization competes in its strategic business units
(SBUs).
 10. Role of Competitive Advantage:
• Distinctive competitive edge.
• Quality as a sustainable competitive advantage.
11. Five Competitive Forces (Porter's 5-forces):
• Threat of New Entrants, Threat of Substitutes, Bargaining Power of Buyers,
Bargaining Power of Suppliers, Current Rivalry.
12. Types of Competitive Strategies:
• Cost Leadership: Lowest total overall costs.
• Differentiation: Creating a unique product or service.
• Focus: Using cost or differentiation advantage in a specific market segment.
13. Innovation Strategies:
• First Mover: Bringing a product or process innovation to market first.

Motivation

• Definition:
• Result of interaction between the person and a situation, not a personal
trait.
• Process by which a person's efforts are energized, directed, and sustained
towards a goal.
• Components:
• Energy: Measure of intensity or drive.
• Direction: Toward organizational goals.
• Persistence: Exerting effort to achieve goals.
• Compatibility: Motivation is most effective when individual needs align with
organizational goals.

Early Theories of Motivation

1. Maslow’s Hierarchy of Needs Theory:

• Categorizes needs into five levels from lower to higher order.
• Lower-order needs (external): physiological, safety.
• Higher-order needs (internal): social, esteem, self-actualization.
• Motivation depends on satisfying needs at the relevant level.
2. McGregor’s Theory X and Theory Y:
• Theory X:
• Assumes workers have little ambition, dislike work, and require
close supervision.
• Theory Y:
 • Assumes workers can self-direct, desire responsibility, and enjoy
work.
• Assumption:
• Motivation is maximized through participative decision-making,
interesting jobs, and good group relations.

Leaders and Leadership

• Leader:
• Someone with influence and managerial authority.
• Leadership:
• The process of influencing a group to achieve goals.
• Ideally, all managers should be leaders.

Early Leadership Theories

Trait Theories (1920s-30s):
• Initial focus on personal characteristics.
• Later identified seven traits associated with successful leadership.
Behavioral Theories:
1. University of Iowa Studies (Kurt Lewin):
• Three leadership styles: Autocratic, Democratic, Laissez-faire.
• Mixed results on performance.
2. Ohio State Studies:
• Two dimensions: Initiating structure, Consideration.
• Mixed results on task performance and satisfaction.
3. University of Michigan Studies:
• Two dimensions: Employee-oriented, Production-oriented.
• Employee-oriented leaders associated with high productivity and job satisfaction.
4. Managerial Grid:
• Appraises leadership styles using Concern for People and Concern for Production.
• Five categories: Impoverished, Task, Middle-of-the-road, Country Club, Team
Management.

Contingency Theories of Leadership

• The Fiedler Model:

• Effective group performance depends on matching leader's style and situational
factors.
• Least-preferred co-worker (LPC) questionnaire determines leadership style.
• Matching leader to the situation is crucial.
Contemporary Views on Leadership

1. Transactional Leadership:
• Guides or motivates followers toward established goals.
2. Transformational Leadership:
• Inspires followers to transcend self-interests for the good of the organization.
• Profound impact on followers.
3. Charismatic Leadership:
• Enthusiastic, self-confident leader influencing behavior through vision and risk-
taking.
4. Visionary Leadership:
• Creates and articulates a realistic, attractive vision of the future.
5. Team Leadership Characteristics:
• Patience, trust, intervention timing.
6. Team Leader's Job:
• Managing external boundary, facilitating team process, coaching, reviewing
performance.

Leadership Issues in the 21st Century

• Managing Power:
• Legitimate, Coercive, Reward, Expert, Referent power.

Human resources: