Organizational Management Midterm 2 - Chapter 5

Strategic Management Process

- A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies. - Integrates strategic planning and management into a single process.

tactical planning

- A set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing. - Middle managers

Analyze External Opportunities and Threats

- Begins with examination of industry - Next, organizational stakeholders are examined. Groups and individuals who affect and are affected by achievement of the organization's mission, goals, and strategies - Includes competitor analysis, legal trends, political activity, social issues, labor and interest groups, economic conditions, and technological factors

Four Basic Strategies

- Concentration - Vertical integration - Related diversification - Unrelated diversification

Step 2: Generate Alternative Goals and Plans

- Goals are targets or ends that a manager wants to reach - Plans are actions or means the manager intends to use to achieve goals

Analyze internal strengths and weaknesses

- Includes financial, human resources, marketing, operations, and other internal resources - Resources are inputs to a system that can enhance performance. Tangible and intangible assets - Resources that are valuable, rare, inimitable, and organized are a company's core capabilities

Strategic Planning

- Making decisions about the organization's long-term goals and strategies. - Top-level managers.

Step 6: Monitor and Control Performance

- Managers must continually monitor the actual performance of their work units against the unit's goals and plans. - Manager's also need to develop control systems to measure that performance and allow them to take corrective action when the plans are implemented improperly or when the situation changes

Step 3: Evaluate Goals and Plans

- Managers will evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan. - Must prioritize those goals and even eliminate some of them. - Managers must consider carefully the implications of alternative plans for meeting high priority goals.

Step 4: Select Goals and Plans

- Managers will select the most appropriate and feasible alternative. - The evaluation process identifies the priorities and trade-offs among the goals and plans.

Establish a Mission, Vision, and Goals

- Mission: An organization's basic purpose and scope of operations - Vision: The long-term direction and strategic intent of a company. Provides a perspective on where the organization is headed and what it can become.

Levels of organizational planning

- Strategic - Tactical - Operational

SWOT analysis

- Strengths - Weaknesses - Opportunities - Threats

operational planning

- The process of identifying the specific procedures and processes required at lower levels of the organization. - Frontline managers

Barriers to Decision Making

- psychological biases - time pressure - social realities

Step 5: Implement the Goals and Plans

-Managers and employees must understand the plan, have the resources to implement it, and be motivated to do so -Successful implementation requires a plan to be linked to other systems in the organization, particularly the budget and reward systems

Steps in the Planning Process

1. Analyze the Situation 2. Generate Alternative Goals and Plans 3. Evaluate Goals and Plans 4. Select Goals and Plans 5. Implement the Goals and Plans 6. Monitor and Control

Managerial Decision Making

1. Identify and diagnose the problem 2. Generate alternative solutions 3. Evaluate alternatives 4. Make the choice 5. Implement the decision 6. Evaluate the decision

low-cost strategy

A strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product.

Differentiation

A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions

Corporate Strategy

Identifies set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities

Functional Strategies

Strategies implemented by each functional area of the organization to support the organization's business strategy

Business Strategy

The major actions by which an organization builds and strengthens its competitive position in the marketplace

Step 1: Analyze the Situation

gather, interpret, and summarize all information to planning issue under consideration