Strategic Management

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STRATEGIC MANAGEMENT & BUSINESS POLICY
12TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER

Strategic Management: a set of managerial decisions
and actions that determines the long-run performance of a corporation.

Includes:
• • • • Internal and external environment scanning Strategy formulation Strategy implementation Evaluation and control

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

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Benefits of Strategic Management: • Clearer sense of strategic vision for the firm • Sharper focus on what is strategically important • Improved understanding of a rapidly changing environment

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Additional Benefits of Strategic Management:
• Improved organizational performance • Achieves a match between the organization’s environment and its strategy, structure and processes • Important in unstable environments • Strategic thinking • Organizational learning

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Impact of Globalization: Globalization: the integration and internationalization of markets and corporations

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Impact of Environmental Sustainability: Environmental Sustainability: the use of business practices to reduce a company’s impact on the natural, physical environment

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Impact of Environmental Sustainability
Risks of Climate Change include:

• Regulatory risk • Supply chain risk • Product and technology risk

• Litigation risk • Reputational risk • Physical risk

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Population ecology: established organizations are
unable to adapt to change

Institution theory: organizations adapt by imitating
successful organizations

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Strategic choice perspective: organizations adapt to
change and have the ability to reshape their environment

Organizational learning theory: organizations adapt
defensively and use knowledge to improve their relationship with the environment

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Strategic flexibility: the ability to shift from one
dominant strategy to another and requires:

• Long-term commitment to the development and nurturing of critical resources • Learning organization

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

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Main activities of a learning organization include:
• Learning from past experience, history and experiences of others • Transferring knowledge quickly and easily throughout the organization

• Solving problems systematically • Experimenting with new approaches

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Basic Elements of Strategic Management
1. 2. 3. 4. Environmental scanning Strategy formulation Strategy implementation Evaluation and control

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Basic Elements of Strategic Management Environmental Scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the organization

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Basic Elements of Strategic Management

Strategy Formulation: the development of long-range
plans for the effective management of environmental opportunities and threats in light of organizational strengths and weaknesses (SWOT)

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Basic Elements of Strategic Management Mission- the purpose or reason for the organization’s existence

Vision- describes what the organization would like to
become

Objectives- the end results...
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