Basic Concepts of

Strategic
Planning and Issues
Management
Learning Objectives

 Understand the benefits of strategic management

 Explain how globalization and environmental sustainability influence
strategic management
 Understand the basic model of strategic management and its
components

© Pearson Education Limited 2015 1-2

Learning Objectives

 Identify some common triggering events that act as stimuli for strategic
change
 Understand strategic decision-making modes
 Use the strategic audit as a method of analyzing corporate functions and
activities

© Pearson Education Limited 2015 1-3

The Study of Strategic Planning

 Strategic Planning - Management

 A set of managerial decisions and actions that determines the
long-run performance of a corporation

© Pearson Education Limited 2015 1-4

Benefits of Strategic Planning

 The attainment of an appropriate match, or “fit,” between an

organization’s environment and its strategy, structure and
processes has positive effects on the organization’s performance.

 Strategic planning becomes increasingly important as the

environment becomes more unstable.

© Pearson Education Limited 2015 1-5

 Benefits of Strategic Planning
 Clearer sense of strategic vision for the firm
 Sharper focus on what is strategically important
 Improved understanding of a rapidly changing environment

© Pearson Education Limited 2015 1-6

 Impact of Globalization
 Globalization
 The integrated internationalization of markets and corporations has
changed the way modern corporations do business

 Globalization has created environmental uncertainty for a lot of

organizations. The more and more market becomes global, the number of
factors organizations must consider taking whatever decision has become
a lot more complex.
 Doubt in the environment presents a threat to strategic planning,
management because it limited their ability to develop plans Long-term
and strategic decision to defend the society in the case of a proportion
with its environment Foreign Affairs.

© Pearson Education Limited 2015 1-7

Impact of Innovation
 Innovation
 Describes new products, services, methods and organizational
approaches that allow the business to achieve extraordinary
returns

 Innovation is the implementation of potential innovations that

truly drives businesses to be remarkable.

© Pearson Education Limited 2015 1-8

Impact of Sustainability

 Sustainability
 Refers to the use of business practices to manage the triple
bottom line

© Pearson Education Limited 2015 1-9

 Impact of Sustainability
The triple bottom line involves:
1. the management of traditional profit/loss;
2. the management of the company’s social responsibility; and
3. the management of its environmental responsibility.

© Pearson Education Limited 2015 1-10

Theories of Organizational Adaptation
 Population ecology
 Once an organization is
successfully established in
a particular environmental
niche, it is unable to adapt
to changing conditions

 Institution theory
 Organizations can and do
adapt to changing conditions
by imitating other successful
organizations

© Pearson Education Limited 2015 1-11

Theories of Organizational Adaptation

 Strategic choice perspective

 not only do organizations adapt to a changing environment, but
they also have the opportunity and power to reshape their
environment

© Pearson Education Limited 2015 1-12

Theories of Organizational Adaptation
 Organizational learning theory
 an organization adjusts defensively to a changing environment and
uses knowledge offensively to improve the fit between itself and its
environment

© Pearson Education Limited 2015 1-13

Creating a Learning Organization

 Strategic flexibility
 the ability to shift from one dominant strategy to another and
requires:

 Long-term commitment to the development and nurturing

of critical resources
 Learning organization
an organization skilled at creating, acquiring and transferring
knowledge and at modifying its behavior to reflect new
knowledge and insights

© Pearson Education Limited 2015 1-14

Creating a Learning Organization
Learning organizations are skilled at four main activities:
 Solving problems systematically
 Experimenting with new approaches
 Learning from their own experiences and past history as well as
from the experiences of others
 Transferring knowledge quickly and efficiently throughout the
organization

© Pearson Education Limited 2015 1-15

The Study of Strategic Management

Strategic Management includes:

 Internal and external environment scanning
 Strategy formulation
 Strategy implementation
 Evaluation and control

© Pearson Education Limited 2015 1-16

Phases of Strategic Management

Phase 1: Basic financial planning

Phase 2: Forecast-based planning

Phase 3: Externally oriented

strategic planning

Phase 4: Strategic management

© Pearson Education Limited 2015 1-17

Basic Elements of the Strategic Management Process

Figure 1-1

© Pearson Education Limited 2015 1-18

 Strategic Management Model

Figure 1-2

© Pearson Education Limited 2015 1-19

Basic Model of Strategic Management

 1- Environmental scanning
 the monitoring, evaluating and disseminating of information from
the external and internal environments to key people within the
organization
 SWOT analysis

© Pearson Education Limited 2015 1-20

 Environmental Variables
Figure 1-3

© Pearson Education Limited 2015 1-21

Basic Model of Strategic Management

 2 - Strategy formulation

 process of investigation, analysis and decision making that

provides the company with the criteria for attaining a
competitive advantage

 includes defining the competitive advantages of the business

(Strategy), crafting the corporate mission, specifying
achievable objectives and setting policy guidelines.

© Pearson Education Limited 2015 1-22

Basic Model of Strategic Management

 Mission
 the purpose or reason for the organization’s existence

 Vision
 describes what the organization would like to become

 Objectives
 the end results of planned activity

© Pearson Education Limited 2015 1-23

Basic Model of Strategic Management

 Strategy
 forms a comprehensive master approach that states how the
corporation will achieve its mission and objectives

 maximizes competitive advantage and minimizes competitive

disadvantage

 corporate, business, functional

© Pearson Education Limited 2015 1-24

Hierarchy of Strategy

© Pearson Education Limited 2015 1-25

Basic Model of Strategic Management

 Policy
 a broad guideline for decision making that links the
formulation of a strategy with its implementation

© Pearson Education Limited 2015 1-26

Basic Model of Strategic Management

 3- Strategy implementation
 a process by which strategies and policies are put into action
through the development of programs, budgets and
procedures

© Pearson Education Limited 2015 1-27

Basic Model of Strategic Management

 4 -Evaluation and control

 a process in which corporate activities and performance
results are monitored so that actual performance can be
compared with desired performance

© Pearson Education Limited 2015 1-28

Basic Model of Strategic Management

 Performance
 the end result of organizational activities
 includes the actual outcomes of the strategic management
process
 Feedback/Learning process
 revise or correct decisions based on performance

© Pearson Education Limited 2015 1-29

Initiation of Strategy: Triggering Events
 Triggering event
 something that acts as a stimulus for a change in strategy and
can include:

 New CEO
 External intervention
 Threat of change of ownership
 Performance gap
 Strategic inflection point

© Pearson Education Limited 2015 1-30

Strategic Decision Making
 Strategic decisions
 deal with the long-term future of an entire organization and
have three characteristics:
 Rare

 Consequential

 Directive

© Pearson Education Limited 2015 1-31

Three Characteristics of Strategic Decisions
 Rare
 Strategic decisions are unusual and typically have no precedent
to follow.
 Consequential
 Strategic decisions commit substantial resources and demand a
great deal of commitment from people at all levels.
 Directive
 Strategic decisions set precedents for lesser decisions and
future actions throughout an organization

© Pearson Education Limited 2015 1-32

Strategic Decision-Making Process
1. Evaluate current performance results
2. Review corporate governance
3. Scan and assess the external environment
4. Scan and assess the internal corporate environment
5. Analyze strategic (SWOT) factors
6. Generate, evaluate and select the best alternative
strategy
7. Implement selected strategies
8. Evaluate implemented strategies

© Pearson Education Limited 2015 1-33

 Strategic Decision-Making Process
Figure 1-5

© Pearson Education Limited 2015 1-34

 Strategic Decision-Making Process
Figure 1-5

© Pearson Education Limited 2015 1-35

The Strategic Audit: Aid to Strategic
Decision Making
 Strategic audit
 provides a checklist of questions, by
area or issue, that enables a
systematic analysis to be made of
various corporate functions and
activities

© Pearson Education Limited 2015 1-36

Issues Management - Purpose
The Issue Management Process ensures:
 a structured approach for identification, communication, tracking, escalation
and resolution of project issues

 a means to assure all issues are visible to the entire team and all team members
can share accountability in issue resolution

 a mechanism to ensure consistency and reliability of issue tracking across the

program

© Pearson Education Limited 2015 1-37

Issues Management -
Definitions
 An issue is defined as problem which has occurred that can have an
adverse impact on the success of the project. Any problem that cannot be
resolved quickly and/or during the normal course of project mechanics
should be logged as an issue.

 There are several criticalities to issues:

Critical Significant impact on the project; the consequences may affect other projects or
halt the implementation; requires immediate resolution

High Impacts several areas of the project; Leadership intervention required

Medium Cannot complete phase without resolution, but does not need to be addressed
immediately; may or may not require Leadership invention

Low Does not impact resources and schedule but requires resolution; may or may not
require Leadership intervention

© Pearson Education Limited 2015 1-38

Guiding Principles

To ensure efficiency in the process, the following will serve as

guiding principles:

1) Issues should be proactively entered by all Team Members

2) Team Leads will be responsible for review and acceptance of issues

3) The Project Manager will serve as champion to ensure

compliance of issue management across the project

4) Issues should focus on key project impacts such as process, policy,

technology, data, scope, resources, budget, change/communication

5) Issues should be proactively managed for resolution based on

criticality. Issues opened longer than 14 days should be reviewed as
the validity of the issues

© Pearson Education Limited 2015 1-39

Issue Management Process
Track As Workplan
Task/Action Item/
Other and Close
Issue
4
YES
NO

Issue
Identify the Issue Log the Issue Qualify the Issue Issue Exists? YES Manage the Issue Escalation
Reqd?
1 2 3 5
Contact Assignee and
Team Lead

NO

NO

Close Issue &

RESOLVE Issue Execute Key Decision Update the Issue
Resolve Issue YES YES
1 ISSUE Resolved? Resolution Next Resulting? w/ Decision Data
Steps
7 8 11

NO

TRACK AS Scope END

Issue Close Issue & Log
2 CHANGE Management
Disposition Change Request
REQUEST Process
6 9

Legend

Risk Project Team

3 TRACK AS Close Issue & Log
Management
RISK Risk
Process Project
10 Manager

© Pearson Education Limited 2015 1-40

Process Steps
Ref Process Step
ID
1 Identify the Issue
2 Log the Issue
3 Qualify the Issue
4 Track as Workplan
Task/Action Item and
Close Issue
5 Manage the Issue
© Pearson Education Limited 2015
Description Input/Output Time Owner
Horizon
As the project progresses, it will be the responsibility of Input: N/A Any time Project Team
all team members to actively identify issues Output: Identified issue
Once the issue has been identified, it should be Input: Identified Issue Any time Project Team
immediately logged in the issue log (Excel – short term Output: Logged Issue (Coordinatory)
or Document Repository Tool - long term) for tracking.
To minimize access to the log, a coordinator (and
backup) will be designated , per team, to enter issues.
Note: When assigning an issue to another assignee,
particularly from another team, the assignee should
be notified via email of the assignment
The Project Manager will qualify the issue. If it is valid, Input: Logged Issue Any time Project Manager
the issue will continue into management (step 5). If Output: Issue Confirmed
the issue does not qualify as it issue, proceed to step 4
If the issue does not qualify as it issue, it should be Input: Unqualified Issue Any time Project Manager
entered as a workplan task, action item or other, next Output: Closed Issue
steps documented in the issue log and finally, the issue
closed
Once an issue is qualified, it must be “worked” in order Input: Qualified Issue Any time Project Team
to drive to resolution. The proper resolution of an Output: Managed Issue
issue will vary depending on the circumstances of the
issue. It is key that all impacted parties should be
involved in reaching proper closure to an issue. This
involves completing Impact Assessments as necessary.
If at anytime, escalation is required to resolve an issue,
the status of the issue will change to escalated and
issue management will continue. If no escalation is
required, the issue will move forward for disposition
(step 6)
1-41
Process Steps
Ref Process Step Description Deliverable I/O Time Owner
ID Horizon

6 Issue Disposition There are several potential dispositions to an issue: Input: Managed Issue Any time Project Team
Resolution (step 7), Tracking as an Change Request Output: Managed Issue
(step 9), or Track as a Risk (step 10).

7 Resolve Issue
In resolving an issue, it is important to involve all Input: Managed Issue Any time Project Team
impacted parties in the resolution process to minimize Output: Resolved Issue
additional problems downstream. The resolution
should be clearly documented in the issue log. The
resolution of an issue typically results in the following
impacts:
• 40%: Functional/Technical development
• 30%: Integration development
• 15%: Hardware
• 15%: Software

8 Close Issue & Execute
Resolution Next Steps
Once the resolution has been documented, the issue Input: Resolved Issue Any time Project Team
will be updated with next steps and the status changed Output: Closed Issue
to ‘closed’. The next steps will then be executed outside
of the issue process. Such next steps may include:
• Update workplan/action item plans
• Conduct follow up meetings/review sessions with
impacted parties (i.e. Technical, Data, etc)
• Identify/update relevant key deliverables based on
resolution

9 Close Issue & Log
Change Request
During the management of an issue, the problem may Input: Managed Issue Any time Project Team
escalate to a change request. At this point, the Output: New Change
resolution should be updated (closed and CR opened), Request
the status changed to ‘closed – CR initiated’ and a new
CR opened

© Pearson Education Limited 2015 1-42

Process Steps
Ref Process Step Description Deliverable I/O Time Owner
ID Horizon

10 Close Issue & Log Risk During the management of an issue, it may be Input: Managed Issue Any time Project Team
discovered that the problem has not yet occurred and is Output: New Risk
better tracked as a risk. The resolution should be
documented, the issue closed and a new risk logged

11 Update the Issue with If the issue and its resolution is deemed to be a key Input: Managed Issue Any time Project Manager
Decision Data decision that will have a significant impact on the Output: Key Decision
project/implementation, the issue log should be update
to reflect it is a key issue. Additionally, the key decision
makers should be noted at that time. If the Project
Manager wishes to later view all key decisions, the log
will be filtered accordingly.

© Pearson Education Limited 2015 1-43

Issue Management Forums

There will be several meetings throughout the week where issues will be
discussed and managed.

Meeting Issue Mgmt Activities

Weekly Project Team • Review/update of ALL CRITICAL and
Meeting HIGH team level issues for accuracy
• Drive resolution
Overdue Issues • Review/update action plans for ALL
Update (exception OVERDUE issues
basis for teams with
Overdue items)

© Pearson Education Limited 2015 1-44

Key Roles & Responsibilities
There are several key roles and responsibilities necessary to ensure
effectiveness of the Issue Management Process.

Role Responsibility
Project Manager • Qualify issues
• Ensure proper logging of issues
• Drive tracking and resolution
• Manage issue escalation

Team Members • Identify and log issues

Project Executive • Review Critical/High issues
• Assist in issue escalation where applicable

© Pearson Education Limited 2015 1-45

© Pearson Education Limited 2015 1-46