STRATEGIC MANAGEMENT

FUNCTIONS OF
MANAGEMENT- PLOCS

-planning
-leading
-organizing
-controlling
-staffing
PLANNING
-defining goals and objectives
-deciding what type of activities the
company will engage in
-determining the resources needed
to achieve the organization's goals
and objectives
LEADING
-specifying job responsibilities
-grouping jobs into work units
-acquisition and allocation of
resources
-creating good working conditions
ORGANIZING

-directing, motivating, and

communication with employees,
individually and in groups

-conflict resolution
CONTROLLING
-monitoring performance of people
and units
-provision of feedback or information
about progress
-identification of performance
problems and actions to correct it.
-comparing desired result vs actual
WHAT IS STRATEGY
*STRATEGY is management's overall
plan and actions for deploying
resources and skills taking into
consideration the strength, weakness,
opportunities and threats in the
environment
- to achieve it's mission, vision, and
objectives
- to establish a favorable competitive
position
STRATEGY INVOLVES:
- an organization's goals
-a series of related decisions and actions
-takes into account key internal
strength, weaknesses, external
opportunities and threats
-analysis, communication, coordination,
and action
WHAT IS STRATEGIC MANAGEMENT?
-Strategic management can be defined as
the art and science of formulating,
implementing, and evaluating cross-
functional decisions that enables
organizations to achieve its objectives

-focuses on how managers formulate and

implement, and evaluate strategies aimed
at developing and maintaining competitive
advantage
- the reason some firms enjoy higher levels of
performance that their rivals or competitors
-strategic management is therefore concerned
with the overall PLOCS
-four aspects that sets strategic management
apart:
*interdisciplinary-involving two or more
academic, scientific and artistic discipline
*external focus
*internal focus
*future directions
IMPORTANCE OF STRATEGIC MANAGEMENT

*GIVES EVERY EMPLOYEE A ROLE TO PLAY

IN MAKING THE FIRM SUCCESSFUL
-applies to all professional employees, not just
those in management
-allows decision making, allocation of resources
and management of people to be based on a
firm's strategic plan
-success as a manager (as measured by your
promotion, job security, and pay increases) is
often determined by your efforts and
departments contribution to overall
organization's success
*MAKES A DIFFERENCE IN
PERFORMANCE LEVELS

-research suggest that successful

companies use strategic management
concepts & techniques

-success evolves from "knowing what

you're doing" and often implies having a
strategic plan
*PROVIDES SYSTEMATIC APPROACH
TO UNCERTAINTIES THAT
ORGANIZATIONS FACE
-competitive and global environment are
dynamic(changing)

-change, whether significant or minor,

must be recognized and analyzed and
dealt with
-strategic management allows for the
analysis of the situation(identifying the
sources of change in environment)
*COORDINATES AND FOCUSES
EMPLOYEES TO ACHIEVE
ORGANIZATION'S GOALS
-allows for team effort which is
coordinated for firm success
-allows for development of a plan,
communication, coordination, and
cooperation among diverse depths and
functions
STRATEGIC MANAGEMENT PROCESS
*ESTABLISHING A MISSION, VISION
AND OBJECTIVES
*ENVIRONMENTAL ANALYSIS
-internal analysis
-external analysis
*STRATEGY FORMULATION
*STRATEGY IMPLEMENTATION
*STRATEGIC CONTROL AND
PERFORMANCE EVALUATION
* A company's mission is a statement of
- the basic purpose or reason for its
existence
-its values (role to stakeholders-
customers, employees, society, etc.)

* The vision goes beyond the mission

statement
- clarifies the long-term direction of the
company (where the company is going)
-reflects management's aspirations for the
company
* Objectives are yardsticks for tracking a
company's performance or end result.

-Financial performance objectives (eg. ROA,

ROI, ROE, dividend growth, stock price)

-Strategic performance objectives (eg.

Market share, growth, innovation leader,
customer service, community &
environmental responsibility)
ENVIRONMENTAL ANALYSIS
- involves the evaluation of the business
environment of the organization

-all internal and external influences that impact a

company's decision and performance
ENVIRONMENT OF A FIRM ARE CLASSIFIED INTO:

- micro-environment (company level- controllable)

- macro-environment (the big picture-

uncontrollable)
ENVIRONMENTAL ANALYSIS
* The micro-environment consists of

-the industry environment such as the competitors,

suppliers, customers, unions and employees,
owners and shareholders

* The macro-environment

- the international/national economy ,changes in

demographic structures, social and political trends,
economic: technology and the natural environment
INTERNAL ANALYSIS
*Involves the evaluation of the inventory of the
firm's resources and capabilities.

* Resources/capabilities can be classified as:

-tangible resources: financial and physical assets

-intangible resources: brand name, reputation,
organizational culture

-capabilities or competencies: managerial ability,

specialized skill and knowledge base of employees
STRATEGY FORMULATION

*The strategy formulation process

- involves designing a course of action for
addressing strategic issues facing the firm
after going through the external and
internal evaluation processes
*Actual strategy of a company involves:

-Planned or Intended actions

-Reactive or Emergent Actions (as-need

reactions to unanticipated events in firm's
micro and macro environments
*Strategy formulation is concerned with
the following parts of a company:
-Corporate(whole company)---Corporate
strategies: deals with what business the
company want to be in and how to manage
those businesses
-Businesses--Competitive strategies: How
to compete in specific business or industry
-Functional areas--Functional strategies:
short goal-directed decisions & actions of
an organization's various functional
departments.
STRATEGY IMPLEMENTATION

*is the process of putting a company's various

strategies into action
-development of programs, policies, budgets &
procedures

*It can take several months or years to complete

EXAMPLE: expansion strategies of SM Group

was formulated 1990's but was implemented in
the year 2000's-full blast- 2011

*most difficult of the strategy process

*the job of implementing strategy involves
managers at all levels
STRATEGIC CONTROL & EVALUATION

*process by which desired outcomes

(mission, vision & objectives) are compared
with realized outcomes to determine if there
are gaps

*initiate corrective actions by monitoring

changes in environment--competitor
actions, new market opportunities,
customer needs and expectations
STRATEGIC MANAGEMENT PROCESS

*On-going and continuous cycle of :

-situation analysis: internal evaluation and

environmental scanning
-strategy formulation
-strategy implementation
-strategy evaluation
MISCONCEPTIONS ABOUT STRATEGY &
STRATEGIC MANAGEMENT

*Strategy & Strategic planning are dead

-every organization needs the focus and

direction provided by its strategies and the
strategic management process

*Strategy is strictly for top management

-top management play a crucial role, but
everyone in the organization has a part to
play
*Strategy is only about planning

-strategic management process shows that strategy is not

only about planning but also about doing
*Strategy is stable and constant

-organizations compete in dynamic environments.

Flexibility and change needed to respond to environmental
opportunities & threats, strength & weaknesses
*Strategic management outlines ultimate destination
& route

-it establishes a systematic approach to analyzing relevant

information & using it to design, implement and evaluate
appropriate strategies