Strategic Management, chapter 1

innovation

describes new products, services, methods, and organizational approaches that allow the business to achieve extraordinary returns

benefits of strategic management

- Appropriate match between an organization's environment and its strategy, structure, and processes has positive effects on the organization's performance. - Strategic planning becomes increasingly important as the environment becomes more unstable. - Clearer sense of strategic vision for the firm - Sharper focus on what is strategically important Improved understanding of a rapidly changing environment

strategic management elements

- Environmental scanning - Strategy formulation - Strategy implementation - Evaluation and control

strategic management includes

Internal and external environmental scanning Strategy formulation Strategy implementation Evaluation and control

four phases of strategic planning

Phase 1: Basic financial planning Phase 2: Forecast-based planning Phase 3: Externally oriented strategic planning Phase 4: Strategic management

strategic decision characteristics

Rare Strategic decisions are unusual and typically have no precedent to follow. Consequential Strategic decisions commit substantial resources and demand a great deal of commitment from people at all levels. Directive Strategic decisions set precedents for lesser decisions and future actions throughout an organization.

strategic management

a set of managerial decisions and actions that determines the long-run performance of a corporation

learning organization

an organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights

business strategy

competitive and corporate strategies

vision

describes what the organization would like to become

strategy

forms a comprehensive master approach that states how the corporation will achieve its mission and objectives maximizes competitive advantage and minimizes competitive disadvantage corporate, business, functional

corporate strategy

overall direction of company and management of its business

mission

purpose or reason for the organization's existence

strategy implementation

process by which strategies and policies are put into action through the development of programs, budgets, and procedures

strategy formulation

process of investigation, analysis, and decision-making that provides the company with the criteria for attaining a competitive advantage includes defining the competitive advantages of the business, crafting the corporate mission, specifying achievable objectives, and setting policy guidelines

sustainability

refers to the use of business practices to manage the triple bottom line

objectives

results of planned activity

globalization

the integrated internationalization of markets and corporations has changed the way modern corporations do business

environmental scanning

the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the organization SWOT analysis = simple way to conduct it

learning organization skills

1. Solving problems systematically 2. Experimenting with new approaches 3. Learning from the organization's own experiences and past history as well as from the experiences of others 4. Transferring knowledge quickly and efficiently throughout the organization

triple bottom line

1. the management of traditional profit/loss 2. the management of the company's social responsibility 3. the management of its environmental responsibility

policy

a broad guideline for decision-making that links formulation of a strategy with its implementation

organizational learning

a critical component of competitiveness in a dynamic environment.

evaluation and control

a process in which corporate activities and performance results are monitored so that actual performance can be compared with desired performance