1. Formulation, Implementation and Evaluation

2. 1. Understand the Strategic management concepts. 2. How to be a strategic thinker. 3. How to create a competitive advantages to your business. 4. Develop students’ skills in strategy design, implementation and evaluation. 5. How culture differences affect management. 6. Develop the knowledge on the influence of social responsibility on business strategy. Prentice Hall, 20082

3. 1. Lecturing and discussions. 2. Using cases in teaching : Real cases and problem solving. 3. Presentations from students. 4. Group work, teamwork and assignments. Prentice Hall, 20083

4.  Concepts and definitions: Strategy, Strategic management, strategic planning, Importance of strategic management, Internal and external environment analysis, competitive advantages, stakeholders, social responsibility and so on.  Tools will be used in analysis, e.g., SWOT, value chain, resource – based approach, industrial analsis. Prentice Hall, 20084

5.  Types of Strategies: Corporate-Level Strategies, Business Unit Strategies, Functional/operational Strategies.  Strategy Formulation: Business Mission, strategy analysis and choice, corporate objectives and strategies.  Strategy Implementation: Organizational Structure, assessment of Organizational Structure, restructuring and reengineering, short-term objectives and programs and activities. Prentice Hall, 20085

6.  Strategy Evaluation and control: processes of evaluation, measuring performance and corrective action.  Global Issues in strategic management: global competition, managing cross- cultures. Prentice Hall, 20086

7. Art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. Strategy “Top Management’s plan to attain outcomes consistent with the organization’s mission and goals” (Wright, Kroll and Parnell,1998) Prentice Hall, 20087

8. A continuous process of change and modification: intended strategy, realized strategy. Prentice Hall, 20088

9. Prentice Hall, Inc. © 20081-9 Strategic Management Defined Set of managerial decisions and actions that determines the long-run performance of a firm. It includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control.

10. Prentice Hall, 200810 Strategy Formulation Strategy Implementation Strategy Evaluation

11. Prentice Hall, 200811 Strategy Formulation Vision & Mission Alternative Strategies Long-Term Objectives Strengths & Weaknesses Opportunities & Threats Strategy Selection

12. Issues include:  What new businesses to enter  What businesses to abandon  How to allocate resources  Expand operations or diversify  Enter international markets  Merge or form joint venture  Avoidance of hostile takeover Prentice Hall, 200812

13. Prentice Hall, 200813 Strategy Implementation Employee Motivation Policies Annual Objectives Resource Allocation

14. Action Stage of strategic management:  Most difficult stage  Mobilizing employees and managers  Interpersonal skills are critical  Consensus on pursuing goals Prentice Hall, 200814

15. Prentice Hall, 200815 Strategy Evaluation Performance Measurement External Review Internal Review Corrective Action

16. Final stage of strategic management:  All strategies subject to future modification  Success today is no guarantee of success tomorrow  Success creates new and different problems  Complacency\satisfaction leads to demise \end. Prentice Hall, 200816

17. According to Peter Drucker… The prime task is to think through the overall mission of a business Ask the question: What is our Business? Prentice Hall, 200817

18. The strategic management process attempts to organize quantitative and qualitative information under conditions of uncertainty. Prentice Hall, 200818

19. Intuition based on:  Past experiences  Judgment  Feelings Useful for decision making  Conditions of great uncertainty  Conditions with little precedent/guide Prentice Hall, 200819

20. Intuition and judgment  Management at all levels  Analyses are influenced Analytical thinking and intuitive thinking  Complement each other Prentice Hall, 200820

21. Organizations must monitor events  On-going process  Internal and external events  Timely changes Prentice Hall, 200821

22. Rate and magnitude of changes  Increasing dramatically  E-commerce  Demographics  Technology  Merger-mania (fashion)  Effective Adaptation  Long-run focus Prentice Hall, 200822

23. Key strategic-management questions:  What kind of business should we become?  Are we in the right fields?  Should we reshape our business?  What new competitors are entering our industry?  What strategies should we pursue?  How are our customers changing? Prentice Hall, 200823

24. Strategists  Most responsible for success or failure of an organization  Various job titles:  Chief executive officer  President  Owner  Chair of the Board  Executive Director  Entrepreneur Prentice Hall, 200824

25. Strategic-Management Process –  Dynamic and Continuous  More formal in larger organizations Prentice Hall, 200825

26.  Proactive in shaping organization’s future  Initiate and influence activities  Formulate better strategies  Systematic, logical, rational approach Prentice Hall, 200826

27.  Financial benefits  Improvement in sales  Improvement in profitability  Improvement in productivity Prentice Hall, 200827

28.  Non-Financial benefits  Enhanced awareness of external threats  Improved understanding of competitors’ strategies  Increased employee productivity  Reduced resistance to change  Understanding of performance-reward relationships  Enhances problem-prevention capabilities Prentice Hall, 200828

29. 1. Identification of opportunities 2. Objective view of management problems 3. Improved coordination and control 4. Minimizes adverse conditions and changes 5. Decisions to better support objectives 6. Effective allocation of time and resources 7. Internal communication among personnel Prentice Hall, 200829

30. 8. Integration of individual behaviors 9. Clarifies individual responsibilities 10. Encourages forward thinking 11. Encourages favorable attitude toward change 12. Discipline and formality to the management of the business Prentice Hall, 200830

31.  Poor reward structures  Fire-fighting  Waste of time  Too expensive  Laziness  Content with success Prentice Hall, 200831

32.  Fear of failure  Overconfidence  Prior bad experience  Self-interest  Fear of the unknown  Suspicion Prentice Hall, 200832

33. Prentice Hall, Inc. © 20081-33 Basic Concepts of Strategic Management 4 Phases of Strategic Management Firms evolve through the following faces of strategic management. 1.Basic financial planning 2.Forecast-based planning 3.Externally-oriented planning 4.Strategic management

34. Prentice Hall, Inc. © 20081-34 Basic Concepts of Strategic Management 1.Basic financial planning: initiate some planning when they requested to set up their budgets; considers activities for one year. 2.Forecast-based planning: consider projects for more than a year. The time horizon is usually 3-5 years. Extrapolate current trends in the future. 3.Externally-oriented planning: conduct strategic planning by top management and they leave implementation to low level. 4.Strategic management: planning by forming a team from all levels in the company.

35. Prentice Hall, Inc. © 20081-35 Organizational Adaptation Organization “fit” with environment Theory of population ecology\biology: org. unable to adapt to changing conditions, because lack of interest in change. Institution theory: org. can adapt to changes by imitating others. Strategic choice perspective: not only adapt to changes but also it can reshape its environment. Organizational learning theory:

36. Prentice Hall, Inc. © 20081-36 Organizational Adaptation Strategic flexibility Demands long-term commitment to development of critical resources Demands firm become a learning organization

37. Prentice Hall, Inc. © 20081-37 Learning Organizations An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights

38. 1. New CEO 2. External intervention e.g., from banks. 3. Threats of change in ownership. 4. Performance gap. 5. Strategic inflection point. Prentice Hall, 200838

39. Prentice Hall, Inc. © 20081-39 Strategic Decision Making Strategic Decisions –Rare: unusual, no precedent to follow. – Consequential : require substantial resources and commitment from all. – Directive: set precedent for future action.

40. Prentice Hall, Inc. © 20081-40 Strategic Decision Making Top managers tend to use one of four modes/approach of strategy formulation: Mintzberg’s Modes –Entrepreneurial mode –Adaptive mode –Planning mode –Logical incrementalism

41. – Entrepreneurial mode: the strategy is made by powerful individual. The focus on opportunities. – Adaptive mode: using reactive solution rather than proactive. – Planning mode: it uses reactive and proactive mode. Data gathering and analysis and select strategies. – Logical incrementalism: strategy is set based on a series of incremental commitment rather than through global formulation of total strategies. This suitable when environment is changing rapidly. Prentice Hall, 200841

42. Prentice Hall, Inc. © 20081-42 Hambrick and Fredrickson – Good Strategy 5 Elements of Good Strategy 1.Arenas 2.Vehicles 3.Differentiators 4.Staging 5.Economic logic