Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. 1 Quality Management for Organizational Excellence Lecture/Presentation Notes By: Dr. David L. Goetsch and Stanley Davis Based on the book Quality Management for Organizational Excellence (Sixth Edition)

2 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage MAJOR TOPICS What is Strategic Management? Competitive Strategy Core Competencies and Competitive Advantage Components of Strategic Management Strategic Planning Overview Creative Thinking in Strategic Planning Conducting the SWOT Analysis Developing the Vision

3 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) Developing the Mission Developing the Guiding Principles Developing Broad Strategic Objectives Developing Specific Tactics (Action Plan) Executing the Strategic Plan Strategic Planning in Action: A “Real World” Case

4 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) Strategies that organizations can adopt for gaining a sustainable competitive advantage are cost leadership, differentiation, and market-niche strategies. Core competencies are things an organization dose so well they can be viewed as providing a competitive advantage. Strategies are approaches adopted by organizations to ensure successful performance in the marketplace.

5 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) Strategic management is management that bases all actions, activities, and decisions on what is most likely to ensure successful performance in the marketplace. The two major components of strategic management are strategic planning and strategic execution. Part of strategic planning is thinking creatively to eliminate “sacred cows” that work against competitiveness.

6 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) Strategic planning is the process whereby organizations develop their vision, mission, guiding principles, broad objectives, and tactics for accomplishing the broad objectives. An organization’s vision is its guiding force, the dream of what it wants to become and its reason for being.

7 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) An organization’s mission describes who an organization is, what it does, and where it is going. An organization’s guiding principles establish the framework within which it will pursue its mission. Together, the guiding principles summarize an organization’s value system, the things it believes are most important.

8 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) An organization’s broad strategic objectives translate its mission into more specific terms that represent actual targets at which the organization aims. The objectives are more specific than the mission, but they are still broad. Tactics are well defined, finite projects and activities undertaken for the purpose of specific desired outcomes in support of the broad objectives.

9 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Three: Strategic Management: Planning and Execution for Competitive Advantage (Continued) Even the best strategic plan will serve no purpose unless it is effectively executed. To promote successful execution of strategies, organizations should undertake the following activities: communicate, build capabilities, establish strategy-supportive stimuli, eliminate administrative barriers, identify advocates and resisters, exercise strategic leadership, and monitor and adjust as needed.