STRAMA

• Strategic management involves understanding and articulating the difference between strategic management and strategy, the importance of strategic management, intended, emergent, and realized strategies, the history of strategic management, and the basic strategic management process
• Schaffer and Emerson's 1964 study on attachment aimed to identify stages of attachment and find a pattern in the development of an attachment between infants and parents
• Freud's superego is the moral component of the psyche, representing internalized societal values and standards
• Strategic management is a comprehensive process designed for firms to best use their resources and capabilities to provide superior firm performance
• Strategies are broad goals that, when accomplished, help the organization move forward toward its vision
• Strategy formation, although not perfect, creates a framework for an organization to look outside of itself and set a course for success
• The strategic management process should always be performed with a framework of corporate ethics and values to limit the temptation to cross ethical lines
• Issues faced by companies like Tesla are the focus of strategic management, helping answer why some firms outperform others
• Strategic management examines how actions and events involving top executives (like Elon Musk), firms (like Tesla), and industries (like the electric car market) influence a firm’s success or failure
• Strategic management involves the utilization or planned allocation of resources to implement major initiatives taken by executives on behalf of stakeholders to improve the performance of firms in an environment
• Intended strategy is the strategy that an organization hopes to execute, usually described in detail within an organization’s strategic plan
• When a strategic plan is created for a new venture, it is called a business plan
• Frederick Smith, as an undergraduate student at Yale in 1965, had to complete a business plan for a proposed company as a class project, describing a delivery system that would gain efficiency by routing packages through a central hub and then passing them to their destinations
• Emergent strategy is an unplanned strategy that arises in response to opportunities and/or unexpected challenges
• FedEx deviated from its intended strategy’s focus on package delivery in the mid-1980s to capitalize on an emerging technology: facsimile (fax) machines, developing a service called ZapMail that involved documents being sent electronically via fax machines between FedEx offices and then being delivered to customers’ offices
• FedEx hoped that ZapMail would be a success because it reduced the delivery time of a document from overnight to just a couple of hours, but the system had technical problems and failed as many businesses purchased their own fax machines
• FedEx lost hundreds of millions of dollars following its failed emergent strategy with ZapMail
• Emergent strategies can lead to tremendous success, like Southern Bloomer Manufacturing, which found success by going beyond its intended strategy of serving institutional needs for durable underwear
• Southern Bloomer initially aimed to serve institutional needs for durable underwear
• Southern Bloomer's performance was excellent, servicing about 125 facilities, but creating a vast amount of scrap fabric
• Failed attempts to use the scrap fabric as stuffing for pillows led to it being sent to landfills, which was wasteful and costly
• Co-founder Don Sonner's emergent strategy for Southern Bloomer involved repurposing scrap fabric for gun-cleaning patches, which became popular with the military, police departments, and gun enthusiasts
• A realized strategy is the strategy that an organization actually follows, shaped by its intended, deliberate, and emergent strategies
• Southern Bloomers Manufacturing Company's realized strategy has been greatly shaped by both its intended and emergent strategies, focusing on underwear and gun-cleaning patches
• In some cases, firms' original intended strategies are long forgotten, leading to unrealized strategies referring to the abandoned parts of the intended strategy
• David McConnell's unrealized strategy to sell books with complimentary perfume led to the success of the California Perfume Company, now known as Avon
• Strategic planning involves intended, emergent, and realized strategies, with organizations responding to changes using emergent strategies
• Most organizations create intended strategies that they hope to follow for success, but changes in the organization's situation give rise to new opportunities and challenges, leading to emergent strategies