Strategic management definition:
Consisting of the analyses, decisions and actions an organization undertakes in order to create and sustain competitive advantages.
Romantic view of leadership
Situations in which the leader is the key force determining the organization´s success – or lack thereof. X: Steve Jobs On the other hand, when thing´s don’t go well, much of the failure of an organization can also be attributed to the leader. X: Nokia External control view of leadership
Situations in which externals forces – where the leader has limited influence – determine the organization´s success Developments in the general environment such as economic downturns, governmental legislation, or an outbreak of major internal conflict or war, can greatly restrict the choices that are available to a firm´s executivenes X: economy, valuate
What is strategic management?
Strategic management: the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. Todays leaders must be proactive, anticipate change, and continually refine, and when necessary, make dramatic changes to their strategies. The strategic management of an organization entails three ongoing processes: Analyses, decisions and actions.
Analyses of strategic goals (vision, mission and strategic objectives along with the analyses of the internal and external environment of the organization. Decisions: Address two basic questions: What industries should we compete in? How should we compete in those industries? These questions often involve an organization´s domestic and international operations Actions that must be taken. Firms bust take the necessary actions to implement their strategies. Second, why do some firms outperform others
How should we compete in order to create competitive advantage in the market place? Managers need to determine the firm should position itself as the low-cost producer or develop products and services that are unique and will enable the firm to charge premium prices. Or should they do a combination of both? How can we create competitive advantages in the marketplace that are unique, valuable and difficult for rivals to copy or substitute? That is, managers need to make such advantages sustainable, instead of temporary.
The ideas, decisions, and actions that enable a firm to succeed Competitive advantage
A firm´s resources and capabilities that enable it to overcome the competitive forces in its industry(ies) Operational effectiveness
Performing similar activities better than rivals
Strategy is all about being different. Sustainable competitive advantage is possible only by performing different activities from rivals or performing similar activities in different ways.
For key attributes of strategic management
Key attributes of strategic management
Directs the organization toward overall goals and objectives Effort must be directed at what is the best for the total organization, not just a single function area. You will look at cases and strategic issues from the perspective of the organization rather than that of the functional area(s) in which you have the strongest background Including multiple stakeholders in decision making
Stakeholders are those individuals, groups and organization 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 Managers will not be successful if they focus on a single stakeholder. Many organizations can satisfy multiple stakeholder needs simultaneously. For example, financial performance may increase because employees who are satisfied with their jobs work harder to enhance customer satisfaction – leading to higher profits. Needs to incorporate short-term and long-term perspectives
Managers must maintain both a vision for the future of the...
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