Strategic Management Summary

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Strategic Management
Summary of textbook – fourth edition
Chapter 1
What is Strategic Management?

Romantic view Situations in which the leader is the key force determining the organization’s of leadershipsuccess – or lack thereof.

External view Situations in which external forces – where the leader has limited influence - of leadershipdetermine the organization’s success.

Strategic The analyses, decisions, and actions an organization undertakes in order to Managementcreate und sustain competitive advantages.

The four key attributes of Strategic Management are:

1. It is directed toward overall organizational goals and objectives
2. It includes multiple stakeholders in decision making
3. It requires incorporating both short-term and long-term perspectives
4. It involves the recognition of trade-offs between effectiveness and efficiency

StakeholdersIndividuals, groups, and organizations who have a stake in the success of the organization, including owners (shareholders in a publicly held corporation), employees, customers, suppliers, and the community at large.

Stakeholder GroupNature of claim

StockholdersDividends, capital appreciation
EmployeesWages, benefits, safe working environment
SuppliersPayment on time, assurance of continued relationship
CreditorsPayment of interest, repayment of principal
CustomersValue, warranties
GovernmentTaxes, compliance with regulations
CommunitiesGood citizenship behavior such as charities, employment, not polluting the environment

EffectivenessTailoring actions to the need of an organization rather than wasting effort, or “doing the right thing”.

EfficiencyPerforming actions at a low cost relative to a benchmark, or “doing things right.”

OperationalPerforming similar activities better than rivals. Effectiveness

AmbidexterityThe challenge mangers face of both aligning resources to take advantage of existing product markets as well as...
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