Professional Documents
Culture Documents
STRATEGIC MANAGEMENT
Strategy?
A course of action, including the
specification of resources required, to
achieve a specific objective.” CIMA:
Official Terminology
Stakeholders
Those individuals, groups, and organizations who have a “stake” in
the success of the organization, including owners (shareholders in a
publicly held corporation), employees, customers, suppliers, the
community at large.
Leaders?
Leaders are the key force in determining the targets of the
organization and way to implement the plans and strategies.
Two Perspectives of Leaders:
A. External control
B. Romantic
C. Internal mechanism
D. Operational
General Strategic Management Process
Defining Strategic Management
Analysis
Strategic goals (vision, mission, strategic objectives)
Internal and external environment of the firm
Strategic decisions
What industries should we compete in?
How should we compete in those industries?
Actions
Allocate necessary resources
Design the organization to bring intended strategies to reality
Ambidexterity
The challenge managers face of both aligning resources to take
advantage of existing product markets as well as proactively
exploring new opportunities.
Managers with this behaviour take time and are alert to opportunities
beyond the confines of their own jobs and behave like brokers,
always looking to build internal networks.
They are multi-taskers who are comfortable wearing more than one
hat.
Ambidextrous managers ask!
Do I meet my numbers?
Their target remain but not limited to, the numbers.
Do I help others?
They keep asking themselves whether they are cooperative and helping others?
What do I do for my peers?
They keep working and trying to know other work to see an opportunity to help.
When I manage up, do I bring problems – or problems with
possible solutions?
They focus on identifying problems and suggesting solutions.
Am I transparent?
They are not secret and under the table deal type people.
Am I developing a group of senior managers who know me and
are willing to back my original ideas with resources?
They are willing to have networks.
Strategy types
Advantages: Disadvantages
For transformational or radical • Rational planning can be too
change rigid and bureaucratic e.g. no use
for the small business
Copes with the uncertain future
•Rational planning can stifle
by providing long term plans innovation e.g. locked into plans
•No use for dynamic or uncertain
Helps integrate and coordinate
environments e.g. plans quickly
complex organisations
become ‘out of date’
Rational Planning Process
Position
Audit Review & Control
Implementation
Environment
Analysis
Incremental Planning Approach
Top-down (centralised) and less formalised approach to strategic planning.
Smaller, gradual and more incremental adjustments to strategic plans e.g. every 6 months up
to 2 years maximum.
Advantages Disadvantages
Less complex and long winded Too reactive, ‘muddling through’
Advantages Disadvantages
Focus on exploiting product and market •Organisation too reactive,
opportunities e.g. ‘never miss a good ‘muddling through’
opportunity’ •Not suitable for transformational or
Less time consuming and complicated
radical change
•Lack of long-term direction.
Greater frequency of planning to adjust •Relies heavily on the judgment and
plans to environmental change experience of the founder
Better for uncertainty or rapidly changing e.g. one single individual
environments
Emergent Strategies
Advantages Disadvantages
Quicker change or repositioning for the •Chaotic organisation that lacks
organisation e.g. lower strategic levels control over planning
‘closer to the customer’ •Lack of long-term direction.
Tactical and operational levels an extensive •Organisation too reactive,
source of innovative ideas
‘muddling through’
Greater motivation to other strategic
Requires entrepreneurial skills from
Levels
staff which may
Supports culture of flexibility, learning and not exist
enterprise
Strategy Implementation
Corporate governance
The relationship among various
participants in determining the
direction and performance of
corporations
Shareholders, management,
board of directors
Corporate Governance and Stakeholder Management
• Board of Directors
– Elected representatives of
the owners
– Ensure interests and
motives of management are
aligned with those of the
owners
Three mechanisms ensure effective
corporate governance:
•An effective and engaged board of
directors
•Shared activism
•Proper managerial rewards and
incentives
Stakeholder Management
Interest e.g. interest in the activities or conduct of the organisation for varied
reasons.
Mendelow’s stakeholder mapping model