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Strategic Management Chapter 1

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(4) Key attributes of strategic management
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1. directs the organization toward overall goals and objectives 2. includes multiple stakeholders in decision making 3. incorporates short term and long term perspectives 4. recognizes trade-offs between efficiency and effectiveness
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The strategic management process consists of…
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1. analysis 2. decisions 3. actions
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A realized strategy and an intended strategy are usually…
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not the same
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Strategic Formulation (Analysis)
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– is the starting point in the strategic management process – precedes effective formulation and implementation of strategies – clear goals and objectives permit effective allocation of resources – includes the hierarchy of goals
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Hierarchy of Goals
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1. Vision – the destination 2. Mission – the roadmap 3. Strategic Objectives – tactics
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Strategic Formulation (Decisions)
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– successful firms develop bases for competitive advantage > cost > differentiation > focus – sustainability – industry life cycle
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Strategic Formulation (Implementation/Actions)
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– informational control > monitor and scan the environment > respond effectively to threats and opportunities – behavioural control – effective corporate governance
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Corporate Governance
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the relationship among various participants in determining the direction and performance of corporations
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Types of Capital
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1. Ecological – renewable resources generated by living systems, such as wood or animal byproducts 2. Material – nonrenewable resources such as mineral ores and fossil fuels 3. Human – people’s knowledge, skills, health, nutrition, safety, security, and motivation 4. Social – assets of civil society, such as social cohesion, trust, reciprocity, equity, and other values that provide mutual benefit
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Driving forces for strategic perspective
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1. Globalization 2. Technology 3. Intellectual Capital
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Company Vision
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– inspiring – overarching – long term – driven by and evokes passion – fundamental statement of the organizations > values > aspiration > goals
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Company Mission Statement
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– purpose of the company – basis of competition and competitive advantages – more specific than vision – focused on the means by which the firm will compete
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Strategic Objectives
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– operationalize the mission statement – provide guidance on how the organization can fulfill or move toward the higher goals – SMART – yardstick for rewards and incentives