Strategic Management Chapter 1
Terms
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- mission statement:
- A statement defining the unique purpose of a company.
- Objectives:
- The results of a planned activity. They state what is to be done and when, QUANTIFIED.
- Strategic Management
- The set of managerial decisions and actions that determine the long run performance of a company
- What is a mission?
- The purpose or reason for a companies existence
- Adaptive mode of decision making:
- "muddling through" Reacting to problems. EX: Encyclopedia Britannica
- How has strategic management evolved?
- Henderson et al realozed that intuitive strategies cannot succeed if a company gets large, it too many layers emerge, or if the envrionment changes
- Policy
- Broad guideline for decision making linking strategy with implementation. EX: Strategy of low ticket prices. Policy = no meals on SWA
- Entrepreneurial mode of decision making
- Strategy made by one strong leader, EX: Bezos at Amazon
- Logical incrementalism mode of decision making
- (added by Quinn later) Large changes in small steps.
- Business strategy
- Usually at the business or product level, focuses on improving position
- Triggering event: something that causes a change in strategy. Name five
- New CEO. External intervention (loan recall), Threat of change in ownership, Performance gap, strategic inflection point.
- Planning mode of decision making
- "gathering of information and generation of alternative stratagies, selecting the right one. EX: IBMS two day meeting on hardware/software
- Environmental scanning
- monitoring and evaluation of information from internal AND external envrionments.
- learning organization
- an organization skilled at aquiring and transferring knowledge.
- Mintzbergs modes of strategic decision making. Name all 4.
- Entrepreneurial, Adaptive, planning, Logical transcendentalism
- Basic model of S.M. The Four Steps.
- Environmental scanning, strategy formulation, strategy implementation, evaluation/control
- Strategic drift
- Per Mintszerg, it is a period of strategic stagnation caused by lack of a triggering event
- Corporate strategy:
- overall direction in terms of growth and management
- What makes a decision strategic?
- It is Rare, Consequential, Directive (setting a large priority)
- Name the four phases of S.M. development
- Basic financial planning. Forecast based planning. Externally oriented planning (strategic planning). Strategic management.
- Three kinds of strategy:
- Corporate. Business. Functional
- Procedures
- SOPs. EX: Stock shelves at night to avoid congestion
- Strategy Implementation
- Process by which strategies and policies are put into action by developing programs, budgets, and procedures
- Functional
- Focused on functional ares, like marketing or advertising
- Goal:
- NOT an objective. It is similar, but open ended.
- Strategy formulation
- The development of long range plans for the effective management of strengths and threats
- Steps of Strategic management
- 1) Environmental scanning 2) strategy implementation 3) evaluation and control
- Strategy:
- a plan stating how the company will achieve its mission and objectives
- Programs
- Statement of the steps needed to accomplish a single use plan. EX: To cut costs, program = reduce assembly times, use new materials, fix union problems