Introduction to strategic management process

The Japanese challenge

By the late 70s the Japanese industry had become very successful in various industries such as steel, electronics, and auto industries, among others.
The Japanese were surpassing American and European companies. Westerners wanted to know why.
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Contd
Studies done in 1981 by Richard Pascale and Anthony Athos showed that the main reason for Japanese success was their superior management techniques. They divided management into 7 aspects:
1. 2. 3. 4. 5. 6. 7. Strategy Structure Systems Skills Staff Style Subordinate goals (shared values).
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Contd.
The first three of the 7 S's were called hard factors and this is where American companies excelled. The remaining four factors (skills, staff, style, and shared values) were called soft factors and were not well understood by American businesses of the time.
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What Made Japan Firms Success Stories?

In a 1982 study, Tom Peters and Robert Waterman identified 8 characteristics of very successful companies: 1. A bias for action 2. Customer focus 3. Entrepreneurship 4. Productivity through people
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Contd.
5. Value oriented CEOs The CEO should actively

propagate corporate values throughout the

organization.

6. Doing what you know well.

7. Keeping things simple and lean 8. Having tight centralized control while also allowing maximum individual autonomy.
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Strategic Management Process

The strategic management process means defining the organizations strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance.

Cont
Strategic management is a continuous process that appraises the business and industries in which the organization is involved; its competitors; and fixes goals to meet all the present and future competitors and then reassesses each strategy.

The Strategic management Process

Pre-planning Activities Strategic planning Deployment Implementation Measurement and Evaluation

The Strategic Management Process: Another View

Mission/Vision Organizations Philosophy

Gap Analysis
Strategic Issues Deliberate/intended Benchmarking

Environmental Scan or SWOT

Strategies
Emergent Strategies Ongoing Strategic Programming
Strategic Goals Action Plans Tactics

Strategic Learning and

Strategic Thinking

Process Illustrated
Goal Setting
Vision,misiion,objectives

Analysis
Resources Environment IOE &EOE

Strategy Evaluation

Strategic Management
Strategy monitoring

Strategy Formulation
Efficiency & effectiveness

Strategy Implementation
Wholesale Prioritized Phases

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(a) Pre- Planning Activities

Preparing Senior Management for strategic Planning Gathering data about the organization and assessing the current state of the organization

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(b) Deployment
Plan Completion With assistance of other staffers to complete the objectives, strategies and action plans based on the strategic foundation Plan Communication Publishing and distributing the plan throughout the organization

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(c) Implementation
Resourcing the plan Provision of the necessary resources (finance, staff, materials, equipment, info) for the implementation of the plan Putting it into action Implementing the action plans Using the tactics Managing the actions Implementing the controls Checking the performance indicators (PIs)
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(d) Monitoring & Evaluation

Monitoring the planned activities and status of implementation and evaluating the achievement of targets is critical Involves: collecting data (monitoring) analyzing and evaluating against targets communicating results making changes to the plan, if necessary

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Support Structure for Strategic Management

Must have: 1. 2. 3. 4. Adequate resources Goodwill from all stakeholders Facilitative structures and systems A set of shared values
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