Denis Manley

Organisational
Proble m
Strategic
Tactical
Organisational
Le ve l
Senior Management
General or Middle
Management
Knowledge or Data
Workers Knowledge
Operations
P ro duct io n Fin an ce/ acco un t in g
Sales/ m ark et in g
Hum an
Reso urces
Production Workers

Strategic Management –
Defined

Strategies in Action
Strategies for taking the hill won’t necessarily hold it. –
Amar Bhide
The early bird may get the worm, but the second mouse gets the cheese. –
Unknown

Strategy Formulation
Vision & Mission and Objectives
Internal evaluation
External evaluation
Develop Alternative Strategies
Strategy Selection

Strategy Implementation
Annual Objectives
Organisational structure
Employee Motivation
Resource Allocation

Strategy Evaluation
Internal Review
External Review
Performance Metrics
Corrective Actions

Vision
“What do we want to become?”
Agreement on the basic vision for which the firm strives to achieve in the long run is critically important to the firm’s success.
Examples of vision statements:
Ryanair wants to become the number one travel choice for all local residents and tourists in Europe.
The Vision of Pepsi To become the leading producer and marketer of food and beverage products in the world

Mission Statements
What is our business?”
Reveal what an organization wants “will be” and whom it wants to serve (essentially like the aim)
Essential for effectively establishing objectives and formulating strategies

Customers
Products
Services
Markets
Technology
Employees
Mission
Elements
Public
Image
Self-Concept
Philosophy
Survival
Growth
Profit

• Components and Questions That a Mission Statement Should Answer
• 1.
Customers : Who are the firm’s customers?
• 2.
Products or services : What are the firm’s major products?
• 3.
Markets : Geographically, where does the firm compete?
• 4.
Technology : Is the firm technologically current?
• 5.
Concern for survival, growth, and profitability : Is the firm committed to growth and financial soundness?
• 6.
Philosophy : What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
• 7.
Self concept: What is the firm’s distinctive competence or major competitive advantage?
• 8.
Concern for public image: Is the firm responsive to social, community, and environmental concerns?
• 9.
Concern for employees: Are employees a valuable asset of the firm?

Benefits of Mission statements
Research results are mixed, however, firms with formal mission statements generally see a:
• 2x average return on shareholder’s equity
• Positive relationship to company performance
• 30% higher return on certain financial measures

• With Ryanair’s new technological planes we hope to please all of our European customers on their travel.(4,3) We hope to serve people of all ages while providing the best service money can buy.(1,2) We will bring our low price travel, with our dedication to helping our community(7,8) and with our marketing plan we hope to grow, while providing the best work experience for our employees. (5,9) We will treat everyone equally and with the upmost respect.

Long-Term Objectives
• Objectives are commonly stated in terms such as:
– growth in assets,
– profitability,
– market share
– degree and nature of diversification.
• Long-term objectives are needed at the corporate, divisional, and functional levels in an organization.
•
• Strategies represent actions to accomplish long-term objectives

Long-Term Objectives
Characteristics of objectives --

Measurable

Realistic

Understandable

Challenging

Hierarchical: corporate/ divisional/functional

Financial vs. Strategic Objectives
It is a Trade-Off between both

Maximize short-term financial objectives – harm long-term strategic objectives

Example: Pursue increased market share at the expense of short-term profitability,

Producing Higher product quality will impact on growth on revenues or profit.

• Explain how you, a CEO of an organisation, would set out to formulate a strategy to ensure the organisation competitive advantage. (9 marks)
• Describe three elements associated with an ideal mission statement. (9 marks)
• Explain, using suitable examples, some of the problems associated with deriving long term objectives (12 marks)