2019. 11. 12.

Strategic management

Management and Organization

12/11/2019

Mark Gal PhD

senior lecturer
Institute of Social Sciences and International Relations

What’s on today’s „menu”?

 What is strategic management?

 Strategic management process;

 Corporate strategy types;

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1. What is strategic management?

 managers activity in order to develop an organization’s
strategies
 it involves all the basic management functions
(planning, organizing, leading, controlling);
Strategy: the decisions and actions that determine the
long-run performance of an organization;
Business model: a strategic design for how a company
intends to profit from its strategies, work processes, and
work activities;
• it focuses on: (1) whether customers will value what the
company is providing; (2) whether the company can
make any money doing that;

1. What is strategic management?

 Why is it important?
- it results in higher organizational
performance;
- it requires that managers examine and adapt to
business environment changes;
- it coordinates diverse organizational units,
helping them focus on organizational goals;
• the company can make any money doing that;

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2. The process

Source: Robbins, S. – Coulter, M. (2012), p. 226

2. The process
• Step 1: Identifying the current mission: every
organization needs a mission-statement
(reminder from the 1st chapter) of its purpose.
These statements provide clues to what these
organizations see as their purpose.
• Step 2: Doing an external analysis: the
environmental scanning of specific and
general environments (it involves identifying
opportunities and threats);

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2. The process
• Step 3:
Doing an internal analysis: assessing
organizational resources, capabilities and
activities (strengths create value for the
customer and strengthen the competitive
position of the organization / weaknesses can
place the company at a competitive
disadvantage)
Stept 2 + 3 combined = SWOT analysis

2. The process
• Step 4:
Formulating strategies: develop and evaluate
strategic alternatives;
- select appropriate strategies for all levels in
the organization that provide relative
advantage over competitors;
- match organizational strengths to
environmental opportunities;
- correct weaknesses and guard against threats;

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2. The process
• Step 5: implementation
- effectively fitting organizational structure to the
environment;
- the environment dictates the chosen strategy;
effectve strategy implementation requires an
organizational structure matched to its
requirements;
• Step 6: evaluating results
- how effective have strategies been?
- what adjustments if any are necessary?

3. Corporate strategy types

a) Growth:
when an organization expands the number of
markets served or products offered, either
through its current business(es) or through
new business(es);
Because of its growth strategy, an organization
may increase revenues, number of employees,
or market share;

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3. Corporate strategy types

b) Stability: corporate strategy in which an organization
continues to do what it is currently doing;
- in other words: the organization doesn’t grow, but
doesn’t fall behind, either;
c) Renewal: these address declining performance; it can
be done via:
- a retrenchment strategy is a short-run renewal strategy
used for minor performance problems; this strategy
helps an organization stabilize operations, revitalize
organizational resources and capabilities;
- a turnaround strategy: when an organization’s
problems are more serious;