MGT489

• Strategy


  Set of related actions that managers take to increase their company's performance
• Shareholder value


  The returns that shareholders earn from purchasing shares in a company, from capital appreciation and dividend payments
• Competitive advantage


  When a company's profitability is greater than the average profitability of firms in its industry
• How a business model explains how a company will

  • Select, acquire, and retain customers
  • Define and differentiate its product offerings
  • Create value for customers
  • Produce and deliver goods or services
  • Lower cost
  • Organize activities within the firm
  • Configure its resources
  • Achieve and sustain a high level of profitability
  • Grow business over time
• General managers


  Bear responsibility for a company's overall performance or for one of its major self-contained subunits or divisions
• Steps in a formal strategic planning process

  1. Select the corporate mission and goals

  2. Analyze the organization's external and internal environment

  3. Select strategies that build on strengths, correct weaknesses, and constitute a viable business model

  4. Implement the strategies

  5. Feedback
• External analysis


  Identifies strategic opportunities and threats that will affect how an organization pursues its mission
• Main components of the strategic planning process

  • Existing Business Model
  • Mission, Vision, Values, and Goals
  • External Analysis: Opportunities and Threats
  • SWOT Strategic Choice
  • Strategies: Functional, Business, Global, and Corporate-Level
  • Governance and Ethics
  • Designing Organization Structure
  • Designing Organization Culture
  • Designing Organization Controls
  • Internal Analysis: Strengths and Weaknesses
• Mission


  Purpose of the company, or a statement of what the company strives to do
• Mission and vision examples

  • North South University: Mission - Produce competent graduates; Vision - Be a center of excellence in higher education
• Functional-level strategies


  Directed at improving the effectiveness of operations within a company
• Strategy implementation


  Taking action at the functional, business, and corporate levels to execute a strategic plan
• Well constructed goals (SMART)

  Precise and measurable, address crucial issues, challenging but realistic, specify a time period for completion
• Deliberate strategies


  Planned strategies that are actually put into action
• Scenario planning


  Formulating plans based on "what-if" scenarios about the future to encourage flexible thinking
• Cognitive biases


  • Prior hypothesis bias
  • Escalating commitment
  • Reasoning by analogy
  • Representativeness
  • Illusion of control
  • Availability error
• Techniques for improving decision making

  Devil's advocacy - Identifying potential problems with a proposal

  Dialectic inquiry - Generating conflicting plans to promote strategic thinking
• Characteristics of good strategic leaders

  • Vision, eloquence, and consistency

  Articulation of a business model

  Commitment, being well informed

  Willingness to delegate and empower

  Astute use of power

  Emotional intelligence (self-awareness, self-regulation, motivation, empathy, social skills)