Strategic Management Introduction Business administration’06-07 Prof.Dr. E.Vatchkova

Contents Strategy as a subject of study Strategy as a subject of study Defining Strategic management Defining Strategic management Main components Main components Strategic management in different context Strategic management in different context Strategic management vs. Operational management Strategic management vs. Operational management

Strategic Management Primarily concerned with how organizations and managers can make appropriate decisions to ensure the long term survival and success of the organization, in condition of substantial complexity and uncertainty Primarily concerned with how organizations and managers can make appropriate decisions to ensure the long term survival and success of the organization, in condition of substantial complexity and uncertainty

Three main aspects STRATEGY ITSELF STRATEGY ITSELF EXCELLENCE IN THE IMPLEMENTATION FOR EFFECTIVE PERFORMANCE EXCELLENCE IN THE IMPLEMENTATION FOR EFFECTIVE PERFORMANCE INNOVATION – TO RESPOND TO PRESSURES FOR CHANCE INNOVATION – TO RESPOND TO PRESSURES FOR CHANCE

COUNSTABLE (1980) management processes and decisions which determine the long-term structure and activities of the organization management processes and decisions which determine the long-term structure and activities of the organization Management process Management process Management decision Management decision Time scale Time scale Structure Structure

ANSOFF (1987) Strategic management involves: Strategic management involves: Strategic planning Strategic planning Management capability plan Management capability plan The overall process of strategic change The overall process of strategic change

STRATEGY WHAT DO WE DO? ENVIRONMENT WHAT IS POSSIBLE? OBJECTIVES WHAT DO WE WANT? RESOURCES WHAT DO WE HAVE?

A summary model of the elements of SM Strategic analysis Strategy implementation Strategic choice The environment Culture and stakeholder expectations Resources and strategic capability Identifying strategic options Evaluating options Selecting strategy Managing strategic change Organization structure and design Planning and allocating resources

Strategic constituents Organization Media Costumers Owners Suppliers Employees Community Organizations Special Interest Groups Consumer Advocates Governments Competitors

Planning instruments used in SM Aspirations planning Aspirations planning Corporate Corporate Administration Administration Productivity Productivity Innovation Innovation Contingency Contingency Team culture Team culture Shock event Shock event

Strategic vs Operational management management Ambiguity Ambiguity Complexity Complexity Non-routine Non-routine Organization-wide Organization-wide Fundamental Fundamental Significant change Significant change Environment or expectations driven Environment or expectations driven Routinised Routinised Operationally specific Operationally specific Small-scale change Small-scale change Resource driven Resource driven

Components of strategic planning Defining organizational purpose and mission Setting organizational goals Formulating organizational strategic plan Implementing strategic plan Evaluating and reformulating strategic plan Redefine?Reset?Reformulate?Rework? Expected results?

Strategy Formulation Environmental Scanning Strategy Implementation Evaluation And Control Process to monitor performance and take corrective action Societal Environment General forces Task Environment Industry analysis Structure Chain of command Culture Beliefs, expectations, values Resources Assets, skills, competencies, knowledge External Internal Reason for existence What results to accomplis h by when Plan to achieve the mission & objectivesBroad guidelines for decision makingActivities needed to accomplish a planCost of the programs Sequence of steps needed to do the job Mission Objectives Strategie s Policies Programs Budgets Procedures Performance Feedback/Learning