Eng Mng 4110 - Chapter 1: The Nature of Strategic Management
Long-term Objectives
Specific results that an organization seeks to achieve (in more than one year) in pursuing its basic vision/mission/strategy
Strategy Formulation
Stage 1 in the strategic-management process; includes developing a vision/mission, identifying an organization's external opportunities/threats, determining internal strengths/weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue
Strategy Implementation
Stage 2 of the strategic-management process. Activities include establishing annual objectives, devising policies, motivating employees, allocating resources, developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance
Empowerment
the act of strengthening employees' sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and rewarding them for doing so
Strategic-management Model
A framework or illustration of the strategic-management process; a clear and practical approach for formulating, implementing, and evaluating strategies
Vision Statement
A one-sentence statement that answers the question, "What do we want to become?"
Mission Statement
An enduring statement of purpose that distinguish one business from other similar firms; a statement that identifies the scope of a firm's operations in product and market terms and addresses the question "What is our business?" A declaration of an organization's "reason for being."
Internal Weaknesses
An organization's controllable activities that are performed especially poorly, such as in areas that include finance, marketing, management, accounting, and MIS, across a firm's products/regions/stores/facilities
Internal Strengths
An organization's controllable activities that are performed especially well, such as in areas that include finance, marketing, management, accounting, and MIS, across a firm's products/regions/stores/facilities
Long-range Planning
Deciding on future actions/objectives/policies with the aim to optimize for tomorrow the trends of today; less effective and comprehensive than strategic planning
External Opportunities
Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly benefit an organization in the future
External Threats
Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly harm an organization in the future.
Retreats
Formal meetings commonly held off-premises to discuss and update a firm's strategic plan; done away from the work site to encourage more creativity and candor from participants
sustained Competitive Advantage
Maintaining what a firm does especially well, compared to rival firms--by (1) continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; and (2) effectively formulating, implementing, and evaluating strategies that capitalize upon those factors
Strategy Evaluation
Stage 3 in the strategic-management process. The three fundamental strategy-evaluation activities are (1) review external and internal factors that are the bases for current strategies, (2) measure performance, and (3) take corrective actions; strategies need to be evaluated regularly because external and internal factors constantly change
Policies
The means by which annual objectives will be achieved. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives. Policies are guides to decision making and address repetitive or recurring situations
Strategies
The means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures
Strategists
The person(s) responsible for formulating and implementing a firm's strategic plan, including the CEO, president, owner of business, head coach, governor, chancellor, and /or the top management team in a firm
Environmental Scanning
The process of conducting research and gathering and assimilating external information
Strategic Planning
The process of formulating an organization's game plan; in a corporate setting, this term may refer to the whole strategic-management process
Strategic-managements Process
The process of formulating, implementing, and evaluating strategies as revealed in the comprehensive model, that begins with vision/mission development and ends with strategy evaluation and feedback
Intuition
Using one's cognition without evident rational thought or analysis; based on past experience, judgment, and feelings; essential to making good strategic decisions but must not relied on heavily in lieu of objective analysis
Competitive Advantage
any activity a firm does especially well compared to activities done by rival firms, or any resource a firm possesses that rival firms desire.
Annual Objectives
are short-term milestones that organizations must achieve to reach long-term objectives. Like long-term objectives, annual objectives should be measurable, quantitative, challenging, realistic, consistent, and prioritized
Strategic Management
is the art and science of formulating, implementing, and evaluating cross-functional decisions that enable and organization to achieve its objectives