Cap 2 Flashcards
Benefits of Strategic Management
- Strategic planning becomes increasingly important as the environment
becomes more unstable. - Clearer sense of strategic vision for the firm
- Sharper focus on what is strategically important
- Improved understanding of a rapidly changing environment
Forces Influencing Strategy
- Globalization
- Innovation
- Sustainability
Creating a Learning Organization
- Strategic flexibility
- Learning organization
Strategic flexibility
- the ability to shift from one dominant strategy to another
- demands long-term commitment to development and nurturing of
critical resources - also demands that the company become a learning organization
Learning organization
an organization skilled at creating, acquiring, and transferring
knowledge and at modifying its behavior to reflect new knowledge
and insights
skilled at:
1. Solving problems systematically
2. Experimenting with new approaches
3. Learning from the organization’s own experiences and past history
as well as from the experiences of others
4. Transferring knowledge quickly and efficiently throughout the
organization
Basic Model of Strategic Management
-Environmental scanning
-Strategy Formulation
-Strategy Implementation
-Evaluation and control
environmental scanning
monitoring, evaluating and disseminating of
information from the external and internal environments
to key people within the organization
* S W O T analysis: simple way to conduct environmental
scanning
Strategy formulation
process of investigation, analysis, and decision-making that provides
the company with the criteria for attaining a competitive advantage
* includes defining the competitive advantages of the business,
crafting the corporate mission, specifying achievable objectives, and
setting policy guidelines
* Mission: purpose or reason for the organization’s existence
* Vision: describes what the organization would like to become
* Objectives: results of planned activity
* Policy: a broad guideline for decision-making that links formulation of a strategy with its implementation
Strategy implementation
process by which strategies and policies are put into action through
the development of programs, budgets, and procedures
Performance
result of activities
* includes actual outcomes of the strategic management process
Feedback
revise or correct decisions based on performance
Triggering Events
something that acts as a stimulus for a change in
strategy and can include:
* new C E O
* external intervention
* threat of change of ownership
Characteristics of Strategic Decisions
- Rare: Strategic decisions are unusual and typically have no
precedent to follow. - Consequential: Strategic decisions commit substantial resources and
demand a great deal of commitment from people at all
levels. - Directive: Strategic decisions set precedents for lesser decisions and
future actions throughout an organization.
Modes of Strategic Decision-making
- Entrepreneurial mode: strategy is made by one powerful individual
-Adaptive mode: characterised by reactive solutions to existing problems, rather than a proactive search for new opportunities - Planning mode: involves the systematic gathering of appropriate information for situation analysis, the generation of feasible alternative strategies, and the rational selection of the most appropriate strategy
- Logical incrementalism: a synthesis of the planning, adaptive, and, to a lesser extent, the entrepreneurial modes