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STRATEGIC MANAGEMENT
Course 703
EMBA: 3 credit hours
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Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments.
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Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives
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Strategic Management
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Answering the first question requires serious thought about what your ultimate aims are for the business.
What are you trying to make happen? What are you attempting to facilitate or enable?
What is the best possible outcome your company can aspire to?
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Drilling down to uncover a companys core objectives can have several phases:
Assessing the landscape within which the company will operate, and formulating how the company sees its role within that landscape. This is commonly known as a mission statement. Establishing objectives to answer some of the unmet needs, taking both a long- and short-term view of what the company can offer. This is commonly known as a vision statement.
Stipulating the goals the company has for itself, both in terms of financial and strategic objectives.
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Phase two of successful strategic management is formulating a plan by which the company can accomplish what it sets out to do. Within this phase, a chain of command should be put in place, pairing individuals with the right skills, knowledge, and experience with the businesss needs and objectives. Responsibilities for processes and tasks should be distributed across the full chain of command, delegating work to teams and individuals so that the companys goals can be attained through the combined efforts of all employees.
Course Instructor : B. G. Bhattacharya
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Finally, strategic management entails allocating the right amount of resources to the different parts of your business so that those assigned to particular goals have what they need to meet their objectives. This ranges from providing your workers with the right supplies to enacting systems by which employees receive the necessary training, all work processes are tested, and all information and data generated is documented.
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Key Terms
Strategies: Some examples
Geographic expansion
Diversification Acquisition
Market penetration
Retrenchment Liquidation
Joint venture
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Key Terms associated with Strategic Management Opportunities and Threats (External)
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Key Terms associated with Strategic Management Strengths & Weaknesses (Internal)
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Management
Marketing
Finance/Accounting
Research & Development
Production/Operations
MIS
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Environment Scanning
Information Collection Information Scrutinization Analyzing internal /external factors
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Environment Scanning
The initial step in St. Mgmt. Process of collecting, scrutinizing and providing information for strategic purposes It analyzes the internal and external factors influencing an organization Management evaluates the environment analysis on a continuous basis
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Strategy Formulation
Vision & Mission External Opportunities & Threats Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies Strategy Selection
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Strategy Formulation
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Strategy Implementation
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Strategy Implementation
Action Stage of Strategic Management
Most difficult stage Mobilization of employees and managers Interpersonal skills critical Consensus on goal pursuit
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Strategy Evaluation
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Strategy Evaluation
Final Stage of Strategic Management Subject to future modification Todays success no guarantee of future success New & different problems Complacency leads to demise
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Selection of the mission and goals - It is the first and most important part to continue the whole process. Without mission and goals, it will be like you are passing through huge jungle and no destination to exit. Analysis of the organization's external competitive environment - This is done to identify opportunities and threats. Remember that external environment can beat you down or block your way before you go on.
Course Instructor : B. G. Bhattacharya
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Peter Drucker: -- Think through the overall mission of a business. Ask the key question: What is our Business?
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The strategic management process attempts to organize quantitative and qualitative information under conditions of uncertainty
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Intuition is useful for decision making in: Conditions of great uncertainty Conditions with little precedent
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Intuitive Thinking
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Adapting to Change
Organizations must monitor events:
On-going process Internal and external events Timely changes
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Adapting to Change
Rate & magnitude of change increasing dramatically
E-commerce Demographics
Technology
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Adapting to Change
Effective Adaptation
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What kind of business should we become? Are we in the right fields Are there new competitors? What strategies should we pursue? How are our customers changing?
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Initiate and influence firms activities Formulate better strategies (plans/ policies)
Systematic, logical, rational
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Improved understanding of competitors strategies Enhanced awareness of threats Reduced resistance to change Enhanced problem-prevention capabilities
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11. Encourages
change
12. Provides
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Too expensive
Laziness Content with success
Course Instructor : B. G. Bhattacharya
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Self-interest
Fear of the unknown Suspicion
Course Instructor : B. G. Bhattacharya
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Balanced Scorecard
Framework used to verify that the firm has established both strategic and financial controls to assess its performance
Prevents overemphasis of financial controls at the expense of strategic controls
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Financial
Cash flow Return on equity Return on assets Assessment of ability to anticipate customer needs Effectiveness of customer service needs Percentage of repeat business Quality of communications with customers
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Customer
Improvements in innovation ability Number of new products compared to competitors Increases in employees skills
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Long-Term Objectives
Internal Audit
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Key Persons
Strategists Firms success/failure
Various Job Titles:
Chief Executive Officer (CEO) Chief Strategy Officer (CSO) President Owner Board Chair Executive Director
Course Instructor : B. G. Bhattacharya
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Key Persons
Strategists Characteristics expected
Tolerance for ambiguity Commitment to the firm and its desired strategic outcomes Interpersonal skills Aspiration level Degree of self-confidence
Course Instructor : B. G. Bhattacharya
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Builds consensus
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May also hold the position of chairman of the board (CEO duality)
Course Instructor : B. G. Bhattacharya
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CEOs of long tenure can also wield substantial power CEOs can gain so much power that they are virtually independent of oversight by the board of directors
The most effective forms of governance share power and influence among the CEO and board of directors
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Organizations select managers and strategic leaders from two types of managerial labor markets:
Internal managerial labor market: advancement opportunities related to managerial positions within a firm External managerial labor market: career opportunities for managers in organizations other than the one for which they currently work
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Experience with the firm and industry environment Familiarity with company products, markets, technologies, and operating procedures Produces lower turnover among existing personnel
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Long tenured insiders may be stale in the saddle Outsiders may bring fresh perspectives
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Time consuming Ignorance of other managerial functions Unsatisfaction in employees Depression due to failure in target Protest of employees
7) 8) 9)
3) 4)
10) It
11) Changes
5) 6)
12) Adverse
unions
13) Political
Thank You
Course Instructor : B. G. Bhattacharya
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