CH 1 SM
CH 1 SM
CH 1 SM
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The term strategic management in this text is used synonymously with the term strategic
planning.
Managers desperately need to know when particular strategies are not working well.
All strategies are subject to future modification because external and internal factors
constantly change.
Strategists “are the individuals most responsible for the success or failure of an
organization.”
They have various job titles, such as chief executive officer, president, owner,
chair of the board, executive director, chancellor, dean, and entrepreneur.
Answers the question “What do we want Answers the question “What is our
to become?” business?”
External opportunities and threats are largely beyond the control of a single
organization—thus the word external.
EX:
• Consumers expect green operations and products.
• Marketing is moving rapidly to the Internet.
• An oversupply of oil is driving oil and gas prices down.
• Computer hacker problems are increasing.
• Unemployment and underemployment rates remain high globally.
• Winters are colder and summers are hotter than usual.
• New laws are passed.
• Competitors introduce new products.
• National catastrophes occur.
• Social media networking is greatly expanding.
Internal strengths and internal weaknesses
Objectives are essential for organizational success because they provide direction;
aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a
basis for effective planning, organizing, motivating, and controlling activities.
Objectives are needed both for the overall company and each division.
Strategies (future-oriented )
“Are the means by which long-term objectives will be achieved.” OR “Are potential
actions that require top-management decisions and large amounts of the firm’s
resources.”
Annual objectives
“Short-term milestones that organizations must achieve to reach long-term
objectives.”
Policies
Notes:
Strategies long term objectives
Are needed to achieve
Policies Annual objectives
Every organization has a vision, mission, objectives, and strategy, even if these
elements are not consciously designed, written, or communicated.
This model does not guarantee success, but it does represent a clear and practical
approach for formulating, implementing, and evaluating strategies.
Managers and employees become surprisingly creative and innovative when they
understand and support the firm’s mission, objectives, and strategies.
Strategic planning is learning, helping, educating, and supporting process, not merely
a paper-shuffling activity among top executives. Strategic-management dialogue is
more important than a nicely bound strategic-management document.
A strong military heritage underlies the study of strategic management. Terms such as
objectives, mission, strengths, and weaknesses were first formulated to address
problems on the battlefield. A fundamental difference between military and business
strategy is that business strategy is formulated, implemented, and evaluated with an
assumption of competition, whereas military strategy is based on an assumption of
conflict.
Both business and military organizations must adapt to change and constantly improve
to be successful.