STRATEGIC MANAGEMENT PROCESS (2)

Question 1

1. Setting objectives
2. Making basic planning forecasts
3. Reviewing alternative courses of action
4. Evaluating which options are best

5.Choosing and implementing your plan

Answer 1

5 STEPS IN THE BASIC MANAGEMENT PROCESS

Question 2

—views the goals from the top of the firm down to frontline employees as a chain

—The company president sets a long-term goal, then the vice president sets their own goal according to the initial goal set, and so on and so forth down the line of employees until even their subordinates have their own goals in line with the top goal

Answer 2

Hierarchy of Goals

Question 3

broad guidelines delineating how employees should act

Answer 3

Policies

Question 4

spell out what to do in a specific situation

Answer 4

Procedures

Question 5

—company’s overall plan for matching its internal strengths and weaknesses with the
external opportunities and threats in order to maintain a competitive position

—“What are we now as a business and where do we want to be?”

Answer 5

Strategic Plan

Question 6

course of action

Answer 6

Strategy

Question 7

—process of identifying and executing the strategic plan by matching company’s
capabilities with the demands of the environment

—Note: A strategic plan contains strategies to reach the end goal. The strategies will be
executed in strategic management

Answer 7

Strategic Management

Question 8

1. Define the company’s current business
2. Perform external and internal “audits”
3. Formulate a new direction
4. Translate the mission into strategic goals
5. Formulate strategies to achieve strategic goals
6. Implement the strategies
7. Evaluate performance

Answer 8

Strategic Management Process

Question 9

—What products are they selling?

—How are they being sold?

—How do the products differ from other competitors?

Answer 9

1. Define the company’s current business

Question 10

Study both the firm’s environment and the internal strengths and weaknesses

Answer 10

2. Perform external and internal “audits”

Question 11

—includes economic, competitive, and political trends

—has information on the company’s environment (external)

Answer 11

Environmental scan worksheet

(Methods of Perform external and internal “audits”)

Question 12

Strengths and Weaknesses (internal) Opportunities and Threats (external)

Answer 12

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

(Methods of Perform external and internal “audits”)

Question 13

(Political, Economic, Social, Technological) all external factors

Answer 13

PEST Analysis (Political, Economic, Social, Technological)

(Methods of Perform external and internal “audits”)

Question 14

What should our business be?
Essence of the business

Vision Statement
—general statement of the firm’s
—intended direction what the company wants to become
—future-oriented

Mission Statement
—what the company’s main tasks are today
—present-oriented

Answer 14

3. Formulate a new direction

Question 15

—What would the mission statement mean for each department?

—Laid out goals in accordance with the broad mission statement task

Answer 15

4. Translate the mission into strategic goals

Question 16

Having specific courses of action in order to achieve strategic goals

Answer 16

5. Formulate strategies to achieve strategic goals

Question 17

Putting plans into action

Answer 17

6. Implement the strategies

Question 18

—Assessment of the progress of their strategic decisions

—If it doesn’t work out as planned, re-strategize

Answer 18

7. Evaluate performance

Question 19

Note: Summary is, the company should first define what their business is currently. They then branch into identifying stregnths and weaknesses (internal) and general company environment (external). Given this data, the company should formulate a NEW direction by identifying what they want to become (vision) and what they should do in order to be what the want to become (mission). Given the mission, it is divided into smaller goals (strategic goals). These smaller goals are further broken down into specific tasks (strategies). After the goals and tasks have been laid out, the strategies will then be executed and eventually evaluated. Repeat step 5 if strategic goals are not met.

From specific to broad: strategy ⇒ strategic goals ⇒ mission statement

Answer 19

Strategic Management Process

Question 20

Corporate Strategy
•Concentration Strategy
•Diversification Strategy
•Vertal Integration Strategy
•Consolidation Strategy
•Geographic Expansion

Competitive Strategy
•Competitive Advantage

Functional Strategy

Answer 20

Types of Strategies

Question 21

identifies portfolio of businesses that, in total, comprise the company and how these businesses relate to each other

Answer 21

Corporate Strategy

Question 22

—single-business
—one product line in one market

Answer 22

Concentration Strategy

Question 23

—expansion by adding new product lines

example: Apple introducing self-driving cars

Answer 23

Diversification Strategy

Question 24

—expansion by producing its own raw materials or by directly selling their products

example: Apple stores being established

Answer 24

Vertal Integration Strategy

Question 25

—Reducing company size by merging with other business units or companies into a single, larger organization —operational efficiency, eliminating competition, and getting access to new markets example: Disney acquiring Marvel and Fox

Answer 25

Consolidation Strategy

Question 26

—entering new territorial markets example: Jollibee in USA and UAE

Answer 26

Geographic Expansion

Question 27

—identifies how to build and strengthen the business’ competitive position in the marketplace —how one company competes with another company

Answer 27

Competitive Strategy

Question 28

—factors that allow a company to differentiate its product or service from those of its competitors to increase market share —what makes a company better than other companies?

Answer 28

Competitive Advantage

Question 29

•Cost leadership - becoming the low-cost leader in the industry; prices •Differentiation - seeks to be unique along dimensions valued by buyers; innovation •Focus - market niche; targeting specific markets (often minorities)

Answer 29

Three Standard Competitive Strategies

Question 30

what each department must do to help the business accomplish its strategic goals

Answer 30

Functional Strategy

Question 31

—formulating and executing human resource policies and practices that produce employee competencies and behaviors the company need to achieve its goals —dynamic, not static –this means that HR managers should identify where each HR activity is now and where it should be to support strategic goals –how to transform HR activities in order to align with and support the company goals

Answer 31

Strategic Human Resource Management

Question 32

—identify company’s strategic goals —determine employee competencies and behaviors required to achieve the goal —produce HR policies and practices to produce said competencies and behaviors

Answer 32

Process of Strategic Human Resource Management

Question 33

•Strategy Map •HR Scorecard •Digital Dashboards

Answer 33

Tools of Strategic Human Resource Management

Question 34

—summarizes the role of each department in achieving the company’s strategic goals —clarifies employees’ “line of sight” by visually linking efforts with company’s ultimate goals

Answer 34

Strategy Map

Question 35

—process for assigning financial and nonfinancial goals or metrics to the strategy map chain of activities required for achieving company strategic goals —“balanced scorecard” planning approach - balances hard data (finances) with soft data (customer satisfaction) to measure overall performance —a specific evaluation standard for activities in the strategic map –standards in the HR scorecard must be met in order to assume that the activity in the strategy map is executed successfully

Answer 35

HR Scorecard

Question 36

—desktop graphs and charts showing how the company is doing on all metrics from the HR scorecard —specific measurement of performance in one activity in the strategy map according to the metrics set in the HR scorecard

Answer 36

Digital Dashboards

Question 37

quantitative gauge of a human resource management activity

Answer 37

Human Resource Metrics

Question 38

comparing the results of high-performing companies to current company to understand what makes them better

Answer 38

Benchmarking

Question 39

—measures the activities that contribute to achieving a company’s strategic goals —measure of internal performance as opposed to comparison with other companies

Answer 39

Strategy-Based Metrics

Question 40

—analysis of the completeness, efficiency, and effectiveness of HR functions —generally involves using a checklist to review functions and ensuring adherence to federal law and company policies

Answer 40

HR Audit

Question 41

—set of HRM policies and practices that produce superior employee performance —Managers use HR metrics to assess company performance and compare them with other firms —The steps in ensuring high-performance systems must be illustrated •can be in the form of hiring based on validated tests and extensive training for employees —High-performance work systems aspire to encourage employee involvement and self- management •They aim to nurture a motivated workforce

Answer 41

High Performance Work Systems

Question 42

—being psychologicall involved in, connected to, and committed to getting one’s jobs done —engaged employees = high connectivity with work tasks = more effort to accomplish task-related goals —Managers can improve employee engagement through supportive supervision •focusing support and coaching on employees’ strengths •make sure employees understand how their departments contribute to company goals •make sure employees see how their efforts contribute to achieving company goals •make sure employees get a sense of accomplishment from working in the company •make sure employees are involved

Answer 42

Employee Engagement