Strategic Management
• Determining the mission and goals of an organization within the context of
its external and internal environments
Analysis of opportunities/threats
Analysis of strengths/weaknesses
Establishment of mission/goals
Formulation of strategies
Implementation of strategies
Strategic control activities
Evolution of Strategic Management
• Ford and Carnegie Foundation funded an
analysis of school curricula and teaching (1950s)
GORDON-HOWELL
REPORT
BUSINESS POLICY
Formal business education
broadened integrating
accounting, finance,
marketing, management,
economic
STRATEGIC MANAGEMENT
Integrating the functional areas to attain consistent
direction, capitalizing on strengths, deemphasizing
weaknesses relative to external environment
Planning Process
BASIC FINANCIAL
PLAN
Operational control through
the meeting of budgets
FORECAST-BASED
PLAN
Planning for growth by trying
to predict the future
EXTERNALLYORIENTED PLAN
Strategic planning by being
responsive to markets
STRATEGIC
MANAGEMENT
Manage resources to develop
competitive advantage and
future success
Strategic Management Model
EXTERNAL ENVIRONMENTAL OPPORTUNITIES/THREATS
Macroenvironment and Industry Environment
THE INTERNAL ENVIRONMENT
Organization’s Resources, Mission and Goals
STRATEGY FORMULATION
Corporate Strategy, Business Unit Strategy, Functional
STRATEGY IMPLEMENTATION
Structure, Leadership, Power and Culture
STRATEGIC CONTROL
Strategic Control Process and Performance
RELEVANCE OF STRAT MANAGEMENT
• Match between organization’s environment and
its strategy, structure and processes
ORGANIZATION’S
PERFORMANCE
Elements of Strat Management
ENVIRONMENTAL
SCANNING
SWOT/TOWS Analysis
STRATEGY
FORMULATION
Mission, objectives,
strategies, policies
STRATEGY
IMPLEMENTATION
Programs, budgets,
procedures
EVALUATION AND
CONTROL
Performance analysis and
feedback mechanism
Strategic Change
• NEW CHIEF EXECUTIVE OFFICER
• INTERVENTION BY EXTERNAL INSTITUTION
• RECOGNITION OF PERFORMANCE GAP
Key Strategic Questions
• Where is the organization now?
• If no changes are made, where will the
organization be in the coming years? Are the
answers acceptable?
• If the answers are not acceptable, what
specific actions should management undertake?
What are the risks and payoffs involved?
Strategic Decisions
• Deal with the long-run future of the entire organization
RARE
Decisions are unusual and no
precedent to follow
CONSEQUENTIAL
Decisions commit resources and
demand commitment
DIRECTING
Decisions set procedures for lesser
decisions and future actions
STRATEGIC MANAGEMENT
Set of managerial decisions that determines the longrun performance of an organization