1. Strategic Management: Value Creation, Sustainability, and Performance, 3e, 2014 The Need for Strategy Chapter 1

2. 1. Today's two strategic imperatives. 2. Define "strategy" and the 5 questions which frame the field. 3. Evolution and the importance of strategy in business. 4. Connect strategy with ethics and leadership. 5. Describe the strategy process. Learning Objectives

3. Opportunity Recognition Value Creation  Technology, "big data," rapid communication  Globalization  Ease of access to finance & markets  24/7 pace of work  Rapid change & evolving conditions Balance between continuity and change Today’s Strategic Imperatives

4. Strategy: Deliberate & Emergent (Source: Mintzberg & Waters, 1985)

5. Why are firms different? How are competitive differences sustained? What is special about strategic decisions? What is the nature of strategy in a multi- divisional firm? How is strategic effectiveness measured? Five Questions Define Strategy

7. Ill-structured and non-routine Significantly affect all departments in firm Involve significant resource commitments over time Involve making a clear choice among alternatives Are difficult to reverse Are easily identified with success or failure Why are strategic decisions special?

8. Financial performance metrics Qualitative assessments Stakeholder goals (external and internal) Important dimensions (see Chapter 2)  Summary performance of firm  Relative to competition  Over the long run How is strategy effectiveness measured?

9. Sun Tzu, 550 BC, "The Art of War" Pericles, 450 BC, "Strategos" (art of the general) Early 1900s – Large firms emerged, management removed from laborers 1962 – Alfred Chandler, "Strategy & Structure" 1970s-80s – Loss of U.S. competitiveness History of Strategy

10. Managing for the long term Pressures in the short term Performance for stockholders Performance for stakeholders Leadership at the top Leadership from the bottom Vision, Ethics, Leadership

11. Strategic Management Process