Siam University
Strategic Management at New Economy in University
Dr. Nut-tapon Paul Nimmanphatcharin
( ดร . ณัฐพล นิมมานพัชรินทร์ )
BB.A., GD.Mgt., MB.Mgt., MBA (Inter Bus), Ph.D. (Mgt)
Faculty of Business Administration, Siam University
235 Petkasem Road, Phasicharoen, Bangkok 10163
Tel. (662) 457-0068 FAX (662) 457-3982, 467-3174
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University
1 INTRODUCTION
Several research studies have defined strategic management as the process of setting and accomplishing goals through the use of human, technical, and financial resources within the context of the environment variables.
Additionally, strategic management as the process of sharing goals & values, strategy, structure, systems, staff, skills, styles, and succession. However, most of the research maintains that strategic management is driven by the top level of an organisation.
2 STRATEGIC MANAGEMENT
The literature review will begin with the strategic management process that can be viewed as containing similar processes to a formalised strategic planning system and then focus on environmental and resource aspects. This paper will also continue with the development of corporate strategy by some tools and techniques.
2.1 Strategic management process
Many research studies define the strategic management process in different ways, but the aim of the process is to build a market position strong enough and an organisation capable enough to produce successful performance despite unforeseeable events, potent competition, and internal problems.
Figure 2.1: Five tasks of strategic management
Task 1:
Develop a
Strategic
Vision and
Business
Mission
Task 2:
Setting
Objectives
Task 3:
Crafting
Strategy to
Achieve the
Objective
Task 4:
Implementing and executing the
Strategy
Task 5:
Evaluating
Performance,
Reviewing New
Developments and
Initiating
Corrective
Adjustments.
Revise as Needed Improve/Change as
Needed
Recycle to Tasks 1,2,3, and
4 as needed
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University
It would suggest that the strategic management process as being involved with identifying environmental problems and opportunities and internal strengths and weaknesses. This step is called “Analysis and
Diagnosis”. Then follows “Choice”, “Implementation”, and “Evaluation”. These three steps are concerned with generating alternative solutions to the problem, making the strategy work by building the structure to support the strategy and developing appropriate plans and policies, and getting feedback to determine whether the strategy is working or taking steps to make it work.
2.2 Environmental and resource analysis
The analysis of the environment is a major stage of the strategic management process, which is concerned with providing an understanding of the current situation that the organisation faces. Let say, the analysis of the environment the impact of internal and external factors is assessed. These influences can play a major role in the development of strategies, as they help identify potential opportunities and threats to the organisation.
Environmental analysis can be undertaken in three parts: the general environment analysis, the immediate environment analysis, and the internal environment analysis.
2.2.1 External environment
The following discussion will cover the two major divisions, namely general environment and immediate environment.
P
E
S
T
A) General environment
The general environment, that which is outside the university control and happening in the broader area can be considered under the following headings:
Political ,
Economic ,
Social ,
Technological .
B) Immediate environment
The immediate competitive environment for university is its industry. In the industry, the universities need to examine their competitors and competitive forces that might be a direct or indirect influence on their products and services. The universities will get some idea from the examination of the general environment 1 of the impact of these factors on the competitive environment at the industry level. In addition, the impact could best
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University be understood by focusing on who the distinctive actors are and how they behave competitively. Let say, the factors in the immediate environment, an organisation might be concerned with include the role of the government, state owned universitys, competitors, business groups (industry), and multinational corporations.
The characteristics of the immediate environment model into two main groups – industry activities and the industry actors. The first examination concentrates on the big picture of the industry, with a focus on the size of the industry, characteristics of the industry, the stage in life cycle of the industry, future challenges to the industry, the market of the industry, and competitive forces 2 (the five forces of the industry). Secondly, the examination concentrates on the industry actors, which are divided into two main groups – direct actors and indirect actors. The direct actors are participants who are heavily involved in the industry such as competitors, buyers, suppliers, substitutes, and potential competitors. On the other hand, the indirect actors could possibly be the government 3 , the general environment factors 4 , and related business groups 5 . The examination of the immediate environment is shown in figure 2.2.
Figure 2.2: Examination of immediate environment model Indirect Actors
Government
Related Business Groups
General Environments
Bargaining Power of Buyers
Intensity of Rivalry
Root of the Industry
Size
Characteristic
Stage Life Cycle
Future Challenges
Market
Barriers to Entry
Bargaining power of Suppliers
Direct Actors
Buyers
Suppliers
Competitors
Potential Competitors
Potential Substitutes
Government
Substitution pressures
1 Consist of Political, Economic, Social/Culture, and Technological Factors.
2 Note that, the competitive forces are intensity of rivalry, barriers to entry, substitution pressures, bargaining power of suppliers and buyers.
3 Note that, it could be the impact of the government policies to the universities.
4 The impact from PEST factors to the industry.
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Siam University
2.2.2 Internal environment
A) Vision and mission statements
It would suggest that the vision of the university should describe the purpose of the organisation. Let say, the vision need not be grandiose, but it should be an articulate statement about where you would like to see the university in the future .
On the other hand, the mission statement is a declaration of how the organisation’s customers, products, services, markets, and philosophy all contribute to the achievement of the university's vision.
Significantly, an organisation’s objective, strategies and performance measures should then flow from its vision and mission, as shown in figure 2.3.
Figure 2.3: Objectives strategies and performance measures flow from vision and mission
Vision Strategies
Performance measures
Mission Short –term objectives
Long –term objectives Strategies
B) Internal analysis
Once the external analysis is complete, the strategist's attention can turn directly to the internal environment analysis of the university. The guidelines as shown in figure 2.4 will assist the university to analyse all of the internal factors that are involved with its business. It would suggest that the information from an internal analysis will depend on the age of the university, its size, and the breadth of its activities.
5 The related business group could be the enterprise in other industries who doing the business with our industry.
Strategic Management at New Economy in University
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Siam University
Figure 2.4: Internal environment analysis for successful business
1) History
2) Skill and Resources
2.1) Management

Organisational Structure and Size

Management Profiles and Ownership

Management Style and Culture

Strategic management

Current University Goals

Problem Perceived by Management
2.2) Marketing

Products and Services

Pricing Policies

Promotion

Distribution/Place

Marketing Strategy

Performance Measures
2.3) Operations

Potential Clients

Layout and flow lines

Equipment

Facility location and Size

Process Technologies

Information Systems

Performance Measures
2.4) Quality Management

Quality Control

Quality Assurance

Quality Accreditation

Performance Measures
2.5) Innovation Management

Product Innovation

Process Innovation

Resource Allocation

R & D Capabilities

Performance Measures
2.6) Human Resource Management

Organisation Culture

Employee Moral and Motivation

Communication and Information System

Training and Development

Reward and Incentive systems

OH &S Management

Performance Measures
2.7) Finance

Profit and Loss Statements

Current Balance Sheet

Cash Flow

Financial Ratio Analysis

Funding Requirements
2.2.3 University situation analysis and techniques
A) SWOT analysis
Strategic management involves aligning an organisation’s opportunities and threats with its strengths and weaknesses.
Strengths and weaknesses will be generated from internal factors such as, the univeristy's people, products/services, operations and facilities, and so forth. On the other hand, opportunities and threats will be picked up from external factors like its markets, the environment, and competitors. These aspects are shown in
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Siam University figure 2.5. Many researchers identify that an organisation needs to focus on internal differential strengths and weaknesses by comparing themselves with competitors and key external opportunities and threats.
Figure 2.5: Identify strategy by SWOT analysis
SWOT Analysis Matrix Model
Internal
Factors
Strengths
Weakness
Opport… Threats
Conclusion
Develop Strategy by using SWOT Analysis.
External
Factors
B) Key success factors analysis
KSFs are business aspects that all universities in the industry must pay close attention to in order to achieve the specific outcomes crucial to market success and the competencies and competitive capabilities with the most direct bearing on university profitability.
C) Driving forces analysis
One tool that might help the university in establishing its business strategies is Driving and Restraining
Forces , shown in figure 2.6.
Figure 2.6: Driving and restraining forces analysis
Identify the driving and restraining forces.
Help Impacts
Hinder Impacts
Determine Strategy
Decision-makers agree or disagree on overall strategies the university is willing to commit to
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Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University
D) Sustainable competitive advantage analysis
SWOT, KSFs, Driving Forces, and Business Strategy analysis will help the university identify its sustainable competitive advantages, which are particular capabilities that will enable the university to maintain a sustainable position against its key competitors. The university will use all these analyses and sustainable competitive advantages to establish its new business strategies to meet the organisation’s visions, missions, and objectives. The related processes of business objectives formulation, SWOT analysis, KSFs analysis, driving force analysis, and environment variable analysis are shown in figure 2.7.
Figure 2.7: Related processes of business objectives, SWOT analysis, KSFs, sustainable competitive advantage, and strategies.
General and Immediate
Environment Analysis
Internal Environment
Analysis
Opportunities and
Threats Analysis
Strengths and
Weaknesses Analysis
SWOT Analysis Key Success Factors
Sustainable
Competitive
Advantage
Options
Driving
Forces
3. STRATEGY
The university management team needs to undertake a process, which will allow it to assess three key questions through the use of the tools shown in figure 2.8.
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University
Figure 2.8: Key questions and tools
Where is the university now?
(Present)
Where does the university want to be?
(Long-term objectives)
Answered by
Answered by
SWOT Analysis
Key Success Factors
Business long-term objectives
How does the university get there?
(Strategies)
Answered by
Business Strategies,
Driving Forces Analysis,
Sustainable Competitive
Advantage
3.1 Planning techniques
Planning techniques are required at each level of the management. However, this part analyses the models and techniques that should be used to help facilitate decision-makers and analysts (university management teams or corporate level).
A) TOWS technique
TOWS matrix builds on the analysis provided by SWOT. This is a technique to help management teams formulate strategy. Opportunity, strengths and weaknesses of the companies are identified in the TOWS matrix. Let say, the management teams could possibly use internal strengths to take advantage of opportunities and to overcome internal weaknesses. This technique is shown in figure 2.9.
Figure 2.9: TOWS matrix framework
Strengths (S)
(List of internal strengths)
Weakness (W)
(List of internal weaknesses)
Opportunities (O)
(List external opportunities)
SO Strategies
(Use internal strengths to take advantage of opportunities)
WO Strategies
(Take advantage of external opportunities to overcome weaknesses)
Threats (T)
(List of external threats)
ST Strategies
(Use internal strengths to avoid external threats)
WT Strategies
(Minimise internal weaknesses and avoid external threats)
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University
In addition, the management teams are able to generate strategies by using internal strengths to avoid threats, while minimizing weaknesses will also help them to deal with external threats. Finally, Several research studies conclude that the TOWS matrix is the combination of external and internal environments in order to identify best strategies, which could be used in corporate and business levels of the organisations.
3.2 Strategy evaluation
Several studies state that corporate strategy evaluation at the widest level involves seeking answer to the following questions:

Are the current objectives of the organisation appropriate?

Are the strategies created previously and which are currently being implemented to achieve these objectives still appropriate?

Do current results confirm or refute previous assumptions about the feasibility of achieving the objectives and the ability of the chosen strategies to achieve the desired results?
In conclusion, in simple terms the corporate strategy evaluation is to analyse the strategies which meet the needs and preferences of the organisation and its key decision-makers and influences – ideally better than any other strategic alternatives. At the same time, the corporate strategy evaluation also will help the management teams identify the future strategy that could possibly be implemented successfully.
3.3 Strategy implementation
Several research studies state that implementation incorporates a number of aspects, some of which can be changed directly and some of which can only be changed indirectly. Let say, the major implementation themes concern organisation structure, strategies, planning system, policies, control system, and environmental conditions.
It would suggest that to be successful in strategy implementation, university should meet the following criteria:

Clear responsibility for the successful outcome of planned strategic change should be allocated,

The number of strategies and availability being pursued at any time should be limited. The ability of the necessary resources to cope with the changes should be seen as a key determinant of strategy and should not be overlooked,

Necessary action to implement strategies should be identified and planned and again responsibility should be allocated, and
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003
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Siam University

Strategy evaluation or performance measures should be established and appropriate monitoring and control mechanisms put in place.
4 SUMMARY
The study of the definition and process of strategic management and the formulation of strategies for universities can be organised around four major issues. They are firstly what the university wants to achieve both qualitatively (mission, vision) and quantitatively (specific market and financial-related objectives) during a strategic time-horizon. Secondly, how the business should be positioned. Thirdly, creating capabilities calls for three basic forms of strategic investment. Fourthly, organisation covers not only formal structure, but also the various processes and systems which will govern the distribution of power; rules and procedures; internal communication; evaluation and reward, coordination mechanisms, and the management of a corporate culture fitting the requirements of the region.
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Dr. Nuttapon Nimmanphatcharin @ 2003
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