A Strategic Management

Model
The Reality of Dynamism
The 21st century epitomizes the reality of dynamism.
Today’s milieu is in a state of fluidity. It is not static.
Changes and fluctuations are constantly happening.
--occurrence of phenomenal situations, continuous
challenges, triggering forces that provoke corresponding
reactions
An environment characterized by drive, energy, and pursuit
and transformation
Impermanence and unpredictability are certainties
Competition has gone beyond nations, peoples, cultures,
geographic frontiers, and industries
Hypercompetition
A fundamental feature of the new economy.
It carries a note of overexcitement and agitation.
Occurs when product/service offerings and
technologies are so new that standards become
unstable and competitive advantage is not sustainable.
The condition where strategic maneuverings have
escalated to bigger business exposure, more
sophisticated marketing positioning, aggressive
selling, and innovative products.
Hypercompetition
Doing business has become intense and more
deliberate.
It seems like a big waste not to discern and take
advantage of every opportunity.
The business atmosphere is characterized by such
activities as outdoing each other, surpassing sales,
taking competitors by surprise, capturing a bigger
market share, winning the business battle, and seizing
the number one slot.
Hypercompetition
Is a situation where both globalization and technology collaborate
to create a heightened cut-throat situation.
Business compete with each other whether they have the same
products, similar products, substitute products, and different
products.
Competitors continuously strive to outplay and outsmart each other.
They need to devise ways and means to survive and deal with this
super competitive and turbulent reality.
New value creation, competitive pricing, innovation in supply chain
management, and high degrees of quality are logical quantitative
and qualitative organizational changes, and sustainable competitive
advantage.
In this hypercompetitive environment, only the most
adaptive and nimble organizations will survive.

Thus, there is the need to STRATEGIZE.

Strategic Management Defined
Is a continuous process of strategy creation. It
involves strategic process like strategic analysis and
decision-making, strategy formulation and
implementation, and strategy control with the
primary objectives of achieving and maintaining
better alignment of corporate policies, priorities, and
success.
The science of creating, executing, and evaluating
cross-functional decisions to enable an organization to
achieve its goals and objectives.
Strategic Analysis consists of a systematic evaluation
of variables currently existing in the external and
internal environments while strategic decision-
making is deliberately bringing together the right
resources for the right markets at the right time.

Strategy Formulation is designing strategies on the

business and corporate levels.
Strategy Implementation is employing these crafted
strategies to achieve organizational set goals and
objectives while strategic control is the application
of an appropriate monitoring and feedback system.
 Strategic Analysis Strategic Intelligence

Strategic Decision- Strategic Thinking

Making

Organizational
Strategy Formulation
Competitiveness

Strategy Implementation Comparative Advantage

Strategic Control Strategic Performance

If Strategic Analysis is accurately conducted,
organizations can develop strategic intelligence.
Strategic Intelligence is the capability of an
organization to possess relevant knowledge, abilities,
foresight, and systems thinking, such that it is able to
assess its own strengths and vulnerabilities, the
pressing challenges confronting the organization, as
well as the trends and opportunities existing in the
environment.
If Strategic Decision-Making is correctly effected,
organizations can acquire the capability of thinking
strategically. Strategic thinking is the cognitive
process of competently and analytically weighing
factors and arriving at critical decisions in the context
of the current milieu of which an organization is part.
If Strategy Formulation is uniquely designed and
effectively communicated, organizations have greater
possibilities of attaining organizational
competitiveness. Organizational competitiveness
pertains to the ability of any business/company to
utilize its resources optimally and sustainably for
maximum performance and productivity.
If Strategy Implementation is efficiently employed,
organizations can achieve comparative advantage.
Comparative advantage refers to the ability of an
organization to produce a particular good or service at
lower marginal and opportunity costs than its
competitors.
If Strategic Control is productively monitored,
organizations can realize strategic performance.
Strategic Performance is the accomplishment of a high
level of productivity that is characterized by efficiency
in the context and quantifiable management.
Quiz
1. What is the reality of dynamism? What is
hypercompetition? How do you think these
situations affect the businesses today?
2. Explain the importance of the strategic management
process. Why do businesses need this?
3. Discuss the relationship between strategic control
and strategic performance.
Organizational Input
Management/employees
Financial resources
Facilities/equipment
Infrastructures
Processes
Strategic Management Process
Strategic Analysis
Strategic Decision-Making
Strategy Formulation
Strategy Implementation
Strategic Control
Organizational Success
Strategic Intelligence
Strategic Thinking
Organizational competitiveness
Comparative Advantage
Strategic Performance
The Strategic Management Model

Strategic
Organizational Organizational
Management
Input Success
Process
The strategic management model shows the relationships
between and among the input, process, and output.
When these specific processes are executed and managed
creatively, distinctly, and strategically, the organization can
ultimately achieve organizational success.
In particular, the output are exhibited in the strategic
intelligence acquired, strategic thinking mode developed,
organizational competitiveness, comparative advantage,
and strategic performance attained by the organization.
Strategic Planning
In terms of purpose, both strategic management and
strategic planning have the same goals and objectives,
that is, to devise a strategic mode of preparing,
addressing, and steering organizations to where they
want to go.
Both undertakings endeavor to understand the strategic
position of organizations – their set goals, preferred
choices, and deliberate and calculated strategies.
Both strategic management and strategic planning use
the same processes to attain their goals.
Strategic management is tackled in the context of an academic
environment where it is approached and treated theoretically.
Strategic planning is a buzzword in the business world.
Strategic management generally presents all the possible
strategic approaches and techniques that organizations can
avail of. It is conducted with a view of the individuality and
distinctiveness of the organization, its current condition,
specific needs, and desired outcomes.
Strategic management is the springboard of strategic
planning. It is a generic approach; while strategic planning is a
distinct and focused approach that is unique to the specific
organization.
Strategic Planning Definition
Strategic planning is defined as a continuous,
repetitive, and competitive process of setting the goals
and objectives that an organization aims to attain,
defining the means to achieve them, and assessing the
best way to realize them in the context of the
prevailing environment while measuring performance
through set standards, and periodically but
continuously conducting reassessments.
Strategic planning exhibits the following properties:
1. It generates the blueprint of what the organization
intends to accomplish.
2. The strategic plan presents the grand scheme of the
organization and outlines all the set activities,
ranging from the organizational to the departmental
level. It formalizes all plans with respect to type and
extent.
3. It is the process of developing a strategic fit between
the organization’s goals and capabilities in the
context of changing opportunities.
4. It is the process that involves carefully delineated
steps. As stated in the definition, strategic planning
is structured, in that it begins with reviewing the
environment, setting goals, adopting and
monitoring strategies, and continuously redesigning
them as the needs arise.
5. It is proactive, in that it is written in the context of
anticipated future realities. Strategic planning does
not make future decisions. Instead, plans are made
in anticipation of future changes and developments.
6. It is a philosophy because it evolves a dynamic way of
conducting and managing an organization. Strategic
planning involves a unique way of thinking and doing
things. It is an intellectual exercise that embraces a belief
that convinces organizations of their worth and
importance. In other words, values are integrated within
the philosophy of an evolving organizational culture.
7.It links the organizational plan with functional and
operational plans. Stratetic planning speaks of two types
of planning: (a) the organizational grand plan; and (b)
the departmental tactical plans.
8.It is intricately interwoven within the defined
managerial functions of organizing, directing, staffing,
and controlling. Although strategic planning is a
strictly formal and separate function of management,
it is subtly intertwined in all the other functions and
responsibilities of a manager.
Quiz – ½ cw
1. What is the difference between strategic
management and strategic planning?
2. How do organizations benefit from strategic
planning?
Activity: Graphic Organizer
What environmental/organizational needs do
companies have that necessitates strategic planning?
Types of Strategic Plans
Medium/long-range plan – prepared for the coming 3
to 5, 10 or more years; describes the major factors or
forces that affect the organization’s long-term
objectives, strategies, and resources required.
Annual/yearly plan – short-term; describes the
organization’s present situation, its goals and
objectives, strategies, monitoring mechanisms, and
the budget for the year ahead.
Steps in Strategic Planning
Iterative, cyclic, and integrative.
1. Making a situation audit to ascertain where the
organization is today;
2. Stating the respective goals and objectives of the
organization, the values and value systems it espouses,
its business definition, and its corresponding strategy
statements to determine where it wants to go;
3. Delineating appropriate strategies to be carried out in
order to help direct the organization to where it wants
to be;
4. Identifying and then choosing the soundest strategy
to determine the best way for the organization to be
where it wants to be and to achieve its goals;
5. Monitoring the implementation of strategies to
measure performances; and
6. Conducting periodic and continuous reassessments
in order to implement improvements and suggested
changes.
Need for Strategic Planning
Reality of dynamism
Complexity
Hypercompetition
Strengths of Strategic Planning
Defines organization’s vision, mission, and set objectives
Opportunity to assess the milieu
Specify strategies to achieve goals
Helps organizations to stay focused.
Makes things happen.
Reduces the chances of committing mistakes.
Increasing the organization’s efficiency.
More efficient allocation of organizational resources, better
collaboration among cross-departmental employees and functional
units,.
Communication between managers/supervisors of all levels.
Provides leverage and competitive advantage to the organization.
Limitations of Strategic Planning
In some instances, strategic plans are good only in
“paper.”
May not be flexible to make the needed adjustments
and realignments due to inevitable or forthcoming
external and internal challenges.
May entail costs that can be expensive to
organizations.
Organizational Vision
Is an inspirational statement of what the organization hopes
to achieve at some point in the future.
An image of what an organization desires to achieve.
Short and succinct.
Carries an extraordinary force that will stir, motivate, and
inspire employees to work and refocus toward the desired
optimal future state.
Like an unseen force, it binds the company and its
employees together.
Example: “An educational institution ablaze with the Spirit
of Excellence.
Mission Statement
Defines the current purpose of an organization;
Answers what the organization does, for whom it is done,
and how it does what it does
Gives employees a better perspective on how their tasks
contribute to the attainment of organizational goals.
Ex. “We build, through Christian and holistic formation,
new generations of responsible citizens who are agents of
transformation.”
Expected to change in the context of shifting economic
realities or unexpected circumstances like challenges,
threats, and even opportunities
Organizational Goals and Objectives
To operationalize the mission statement,
organizational goals and objectives are defined.
Organizational goals are pursued to make the
specified strategies succeed.
Organizational goals vary and are essentially
dependent on their respective purpose and direction.
Goals are macro; represent the overall vision of an
organization.
Goals have the ff. properties
1. Goals provide organizations focus and direction.
2. Goals move organizations to action.
3. Goals develop in organizations the trait of
persistence.
Characteristics of Objectives
1. Objectives need to be clearly defined and
formulated, carefully chosen, specific, and definite.
2. Objectives may be immediate or short-term.
3. They need to be prioritized into a hierarchy of
objectives.
4. Objectives need to be realistic and attainable. They
need to be flexible, consistent, and strategic.
5. Objectives need to be measurable over time.
Classifications of Strategic Objectives
1. Market standing
2. Innovation
3. Human resources
4. Financial resources
5. Physical resources
6. Productivity
7. Social responsibility
8. Profit requirements
Values and Value System
Values – inherent roots of motivation within an
individual, an organization, a community, or a nation.
They are by nature, ingrained and thus, are more
stable and enduring. They are both intellectual and
behavioral, serving as bases for the organization’s
actions and way of thinking.
Generally exhibited in two different ways – beliefs and
attitudes.
Beliefs are cognitive manifestations.
Attitudes are characteristically behavioral
Value System
Values
Dreams and aspirations
Philosophies
Expectations
Ethical practices
Leadership and management styles
interests
Organizational Climate and Culture
Interrelated, interdependent, and sequential.
Organizational climate is often defined as the regular and
repetitive patterns of attitudes and behavior exhibited by
employees of an organization. It is the measure of the health
of the organization. It manifests whether employees are
happy, hardworking, and motivated, or otherwise; whether
good interpersonal relationships exist between and among
different levels of management; and whether the work
environment is acceptable and conducive to productivity
Easier to assess and change. It lends to flexibility. It precedes
and somehow contributes to the solidification of the culture
of an organization.
Organizational culture
Denotes a wide range of social phenomena, including
an organization’s customary dress, language, behavior,
beliefs, values, symbols of status, and authority,
myths, ceremonies and rituals, and modes of
deference and subversion; all of which help to define
an organization’s character and norms.
Culture is an idealized system because a system
focuses on types of meanings represented by values,
formal rules, knowledge, beliefs, and expressive forms.
Organizational culture
A system of knowledge and common values which can
be exhibited and evaluated similarly by people even
with different backgrounds and at different levels
within the organization.
Organizational culture is more solid, stable, and long-
term because it presents the organization’s culture
from its inception to where it is, showing how the
culture of an organization evolved through the years.
Organizational culture is largely and generally
influenced by the leadership of the top management.