Prentice Hall, Inc. © 20081-1 Basic Concepts of Strategic Management Environmental Variables.
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Transcript of Prentice Hall, Inc. © 20081-1 Basic Concepts of Strategic Management Environmental Variables.
Prentice Hall, Inc. © 2008 1-1
Basic Concepts of Strategic Management
Environmental Variables
Prentice Hall, Inc. © 2008 1-2
Environmental Scanning
SWOT Analysis
• Strengths – Weaknesses
• Opportunities – Threats
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Strategy Formulation
Developing long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses
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Strategy Formulation – How to Codify a Strategy
Mission Statement
• Purpose/reason for organization• Promotes shared expectations• Communicates public image• Who we are; what we do; what we
aspire to
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Organizational Adaptation
Organization “fit” with environment
• Theory of population ecology• Institution theory• Strategic choice perspective• Organizational learning theory
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Organizational Adaptation
Strategic flexibility
• Demands long-term commitment to development of critical resources
• Demands firm become a learning organization
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Learning Organizations
Learning Organization:An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
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Learning Organizations
4 Chief Activities of a Learning Organization
• Systematic problem solving• New approach experimentation• Learning from experiences• Intra-organization knowledge transfer
Prentice Hall, Inc. © 2008 1-9
Basic Concepts of Strategic Management
Hierarchy of Strategy
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Goals & Objectives
Corporate Goals/Objectives
–Profitability (net profit)–Growth–Resource utilization (ROE, ROI)–Market leadership
Prentice Hall, Inc. © 2008 1-11
Basic Concepts of Strategic Management
3 Types of Strategy
–Corporate strategy
–Business strategy
–Functional strategy
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Basic Concepts of Strategic Management
Corporate Strategy seeks one of these:
–Stability–Growth–Retrenchment
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Basic Concepts of Strategic Management
Business Strategy
–Competitive strategies
–Cooperative strategies
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Basic Concepts of Strategic Management
Functional Strategy
–Technological leadership
–Technological followership
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Basic Concepts of Strategic Management
Strategic Decision-Making
Process
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Strategic Decision Making
Strategic Decisions
– Rare
– Consequential
– Directive
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Strategic Decision Making
Mintzberg’s Modes of Strategy Decision Making
–Entrepreneurial mode – CEO-driven–Adaptive mode – ‘muddling through’–Planning mode – process-driven–Logical incrementalism - mixture
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Hambrick and Fredrickson – Good Strategy
5 Elements of Good Strategy
1. Arenas2. Vehicles3. Differentiators4. Staging5. Economic logic