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