1. Introduction to Strategic Management
Strategic Imperative
Strategic Management (BA 491)
Introduction to Strategic Management

2. Strategic Management
Strategic management is the study of why some firms outperform others.
How to create a competitive advantage in the market place that is unique, valuable, and difficult to copy
“Total organization” perspective, integrating across functional areas.
Two perspectives of leadership: romantic view and external control perspective.
Strategies put together an understanding of the external environment with an understanding of internal strengths and weaknesses.

3. Definition of Strategic Management
Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages (Dess, Lumpkin, & Eisner, Strategic Management: Creating Competitive Advantage, 3rd Ed., p. 9).

4. Definition of Strategic Management
Analysis
Strategic goals (vision, mission, strategic objectives)
Internal and external environment of the firm
Decisions
What industries should we compete in?
How should we compete in those industries?
Actions
Allocate necessary resources
Design the organization to bring intended strategies to reality

5. Attributes of Strategic Management
Directs the organization toward overall goals and objectives.
Includes multiple stakeholders in decision making.
Needs to incorporate short-term and long-term perspectives.
Recognizes trade-offs between efficiency and effectiveness.

6. Mintzberg’s Views of Strategy
Plan - consciously intended course of action
Ploy - maneuver to outwit opponent
Pattern - consistency in behavior
Position - location in environment
Perspective - way of perceiving the world

7. Forms of Strategy
Formal versus informal - associated with size of firm and stage of development. Mintzberg’s distinction between entrepreneurial and planning mode.
Intended versus realized - intended strategies are the plans managers develop; realized strategies are the actions that actually take place over time.

8. Forms of Strategy
Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (1985), pp

9. Strategic Management Process
Analysis
Hierarchy of goals
Analysis of external and internal environments
Formulation
What business(es) should we be in?
For each, what is the basis for competitive advantage (low cost, differentiation, focus)?
Implementation
Functional tactics
Culture and organization structure

10. Coherence in Strategic Direction
Company vision
Massively inspiring
Overarching
Long-term
Driven by and evokes passion
Fundamental statement of the organization’s
Values
Aspiration
Goals
Hierarchy of Goals
Company vision

11. Coherence in Strategic Direction
Mission statements
Purpose of the company
Basis of competition and competitive advantages
More specific than vision
Focused on the means by which the firm will compete
Hierarchy of Goals
Company vision
Mission statements

12. Coherence in Strategic Direction
Strategic objectives
Operationalize the mission statement
Measurable, specific, appropriate, realistic, timely, challenging, resolve conflicts that arise, and yardstick for rewards and incentives
Hierarchy of Goals
Company vision
Mission statements
Strategic objectives

13. Levels of Strategy
Corporate-level
Business-level
Functional-level

14. Does Strategic Planning Pay Off?
Original research showed mixed results. Planning might not pay off for firms in static or turbulent environments or for small firms.
Miller and Cardinal’s (1994) meta-analysis found that strategic planning affects firm growth and profitability. In particular, they found that:
Planning  performance link true for formal and informal planning.
Planning  performance link even stronger in turbulent environments.
Firm size unrelated to effectiveness of planning.