Strategic Management

• Romantic view of leadership


  Situations in which the leader is the key force determining the organization's success—or lack thereof
• External control view of leadership


  Situations in which external forces—where the leader has limited influence—determine the organization's success
• Strategic management


  The analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages
• Strategic management processes

  1. Strategy analysis

  2. Strategy formulation

  3. Strategy implementation
• Strategy


  The ideas, decisions, and actions that enable a firm to succeed
• Competitive advantage


  A firm's resources and capabilities that enable it to overcome the competitive forces in its industry(ies)
• Operational effectiveness


  Performing similar activities better than rivals
• Key attributes of strategic management

  • Directs the organization toward overall goals and objectives
  • Includes multiple stakeholders in decision making
  • Needs to incorporate short-term and long-term perspectives
  • Recognizes trade-offs between efficiency and effectiveness
• Effectiveness


  Tailoring actions to the needs of an organization rather than wasting effort, or "doing the right thing"
• Efficiency


  Performing actions at a low cost relative to a benchmark, or "doing things right"
• Ambidexterity


  The challenge managers face of both aligning resources to take advantage of existing product markets and proactively exploring new opportunities
• Ambidextrous behaviors


  • Take time and are alert to opportunities beyond the confines of their own jobs
  • They are cooperative and seek out opportunities to combine their efforts with others
  • They are brokers, always looking to build internal networks
  • They are multitaskers who are comfortable wearing more than one hat
• Intended strategy


  Strategy in which organizational decisions are determined only by analysis
• Realized strategy


  Strategy in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences
• Strategy analysis


  Study of firms' external and internal environments, and their fit with organizational vision and goals
• Strategy formulation


  Decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage
• Strategy implementation


  Actions made by firms that carry out the formulated strategy, including strategic controls, organizational design, and leadership
• Stakeholder management


  A firm's strategy for recognizing and responding to the interests of all its salient stakeholders
• Social responsibility


  The expectation that businesses or individuals will strive to improve the overall welfare of society
• Three theaters of practice for social responsibility

  • Focusing on philanthropy
  • Improving operational effectiveness
  • Transforming the business model
• Triple bottom line


  Assessment of a firm's financial, social, and environmental performance
• The ROIs on sustainability projects are often very difficult to quantify for a number of reasons
• Three types of leaders

  • Local line leaders
  • Executive leaders
  • Internal networkers
• Hierarchy of goals


  Organizational goals ranging from, at the top, those that are less specific yet able to evoke powerful and compelling mental images, to, at the bottom, those that are more specific and measurable
• Vision


  Organizational goal(s) that evoke(s) powerful and compelling mental images
• Mission


  A set of organizational goals that identifies the purpose of the organization, its basis of competition, and competitive advantage
• Strategic objectives


  A set of organizational goals that are used to put into practice the mission statement and that are specific and cover a well-defined time frame
• Criteria for strategic objectives

  • Specific
  • Measurable
  • Appropriate
  • Realistic
  • Timely
• Perceptual acuity


  The ability to sense what is coming before the fog clears
• Inputs to forecasting

  • Environmental scanning
  • Environmental monitoring
  • Competitive intelligence
• Examples of websites for competitive intelligence

  • SlideShare
  • Quora
  • ISPionage
  • YouTube
• Environmental forecasting


  The development of plausible projections about the direction, scope, speed, and intensity of environmental change
• Scenario analysis


  An in-depth approach to environmental forecasting that involves experts' detailed assessments of societal trends, economics, politics, technology, or other dimensions of the external environment
• SWOT analysis


  A framework for analyzing a company's internal and external environments and that stands for strengths, weaknesses, opportunities, and threats
• Components of SWOT analysis

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
• The general idea of SWOT analysis is that a firm's strategy must: Build on its strengths, Remedy the weaknesses or work around them, Take advantage of the opportunities presented by the environment, Protect the firm from the threats
• General environment


  Factors external to an industry, and usually beyond a firm's control, that affect a firm's strategy
• Segments of the general environment

  • Demographic
  • Sociocultural
  • Political/legal
  • Technological
  • Economic
  • Global
• Data analytics


  The process of examining large data sets to uncover hidden patterns, market trends, and customer preferences
• Industry


  A group of firms that produce similar goods or services