Bma3- lecture 01 2014. Strategic Management

ONB 3 B

STRATEGIC MANAGEMENT

Lecture 1

Strategic Management

process

Strategic management

The concept : Enterprise or business

Strategic management

Top management promise: Value

proposition to satisfy a need

THE TIME LINE OF STRATEGY

Present Future Past

Strategic thinking

The fundamental question:

– In what way would top management make decisions in such a rapid changing environment in order for it to survive and even more to show growth?

ASPECTS OF STRATEGIC

MANAGEMENT

Inputs - analysis Actions – formulation Actions – implementation

Contemporary issues

Strategic Management - concepts

Strategic management Strategic thinking Strategic decisions Hypercompetition The strategic business game The fundamental question of strategy The core areas of strategy Process, content and context of strategy The role of change

Strategic management

Decision-making - present That set of managerial

decisions and actions that determine the long-run performance of an organisation (company)

Deliver the promise to the customer

Strategic thinking

Strategic thinking To learn to think beyond the

parameters of conventional wisdom and develop approaches to compete successfully in a hostile environment

Strategic thinking

Vision Corporate (organisational) culture Foresight Leadership Instituting ethics and values Core values of business

Core values Have a commitment for service Demonstrate genuine caring for

people Provide ethical treatment for all

people Provide good value to all members Be ever-changing and dynamic

Strategic thinking

The challenge of strategic management within a changing environment

The new competitive landscape– Technology– Globalisation

Technology and technological changes

The new competitive landscape

• Rapid technological changes

• Rapid technology diffusion

• Dramatic changes in information technologies

• Increasing importance of knowledge

The competitive landscape

The global economy

• People, goods, services, and ideas move freely across geographical borders

• Significant opportunities emerge in multiple global markets

• Markets and industries become more internationalized

Strategic decisions

Strategic decisions - elements

Context

Content

Process

Strategic decisions - elements

Context - environment

Content - main actions of strategy

Process - how actions interact - role of change

The relationship between:

• strategic thinking

• strategic management

• strategic planning

• strategy

The relationship between strategic management, strategic planning

and strategy

Strategic management/Strategic thinking

Strategic management/Strategic thinking

Strategic planningStrategic planning

StrategyStrategy

Comprehensive master plan “How” the organisation

wants to fulfill its goals and objectives

Comprehensive master plan “How” the organisation

wants to fulfill its goals and objectives

Core areas of Strategy

Core areas of Strategy

Strategic Analysis

Strategy implementationStrategic

development

The models of strategy

Traditional - prescriptive approach

Continuous - emergent approach

Prescriptive approach

Strategic Analysis

• Environment• Resources• Vision,mission and objectives

Strategic development

• Options• Selection• Route forward• Consider strategy

Strategy implementation

Prescriptive approach

Focus on:

• profit-maximising, competition based

• resource-based• game-based• socio-cultural environment

Emergent Approach

Planned (or Intended) Strategy

Actual Strategy

Adaptive Reactions to changing circumstances

The emergent approach

Strategic Analysis

• Environment• Resources• Vision,mission and objectives

Strategic development

• Options• Selection• Route forward• Consider strategy

Strategy implementation

Emergent approach

Focus on:

survival-based uncertainty-based human resource-based continuous approach

Strategic management model

Analysis of the external environment

Long-term goals

Objectives

Strategic plan

LegendMajor impactMinor impact

Desired

Possible

Enterprise mission

Company profile

Analyse and develop

Strategic management model

Feedback

Analysis of the external environment

Long-term goals

Objectives Operating strategies

Strategic plan

LegendMajor impactMinor impact

Evaluation and control

Institutionalization of strategy

Policies

Feedback

Desired

Possible

Enterprise mission

Company profile

Analyse, develop and implement

The five tasks of strategic management

The five tasks of strategic management

Task 1 Task 2 Task 3 Task 4 Task 5

Developing a strategic vision and business mission

Revise as needed

Setting objectives

Crafting a strategy to achieve the objectives

Implementing and executing the strategy

Evaluation and control

Revise as needed

Improve / change as needed

Improve / change as needed

Recycle to tasks 1, 2, 3 or 4 as needed

Feedback

Who performs the five tasks of strategic management?

Who performs the five tasks of strategic management?

Every manager has a strategy-making, strategy-

implementation role

It is wrong to view strategic management as a solely a

senior executive responsibility

Hierarchy of strategic management levels

Board of directorsBoard of directors

Chief executive officer

Chief executive officer

General ManagerFinance

General ManagerFinance

Manager Shoe business

Manager Shoe business

Human resource manager

Human resource manager

Manager Steel business

Manager Steel business

Marketing manager

Marketing manager

General ManagerHuman resources

General ManagerHuman resources

Financial managerFinancial manager

Corporate level

Divisional level

Functional level

Manager Clothing business

Manager Clothing business

Shortcomings of strategic management process

Fail to develop a long-term planning philosophy

All levels of management not involved

Rely on intuitive decision-making

Unrealistic expectations Inflexible in a too rapidly

changing environmnt

Driving forces of strategy

Driving forces of strategy

Vision – value creationResources (EP) – locked inCreativityValue systemsAssumptions (change)Risk appetiteSustainability

Organisational Strategist

Decision-making on different aspects

Inspiring othersBold innovative ideas

Thank you