Strategic Management Chapter 1

Flashcard maker : Lily Taylor
(4) Key attributes of strategic management
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
The strategic management process consists of…
1. analysis
2. decisions
3. actions
A realized strategy and an intended strategy are usually…
not the same
Strategic Formulation (Analysis)
– 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
Hierarchy of Goals
1. Vision – the destination
2. Mission – the roadmap
3. Strategic Objectives – tactics
Strategic Formulation (Decisions)
– successful firms develop bases for competitive advantage
> cost
> differentiation
> focus
– sustainability
– industry life cycle
Strategic Formulation (Implementation/Actions)
– informational control
> monitor and scan the environment
> respond effectively to threats and opportunities
– behavioural control
– effective corporate governance
Corporate Governance
the relationship among various participants in determining the direction and performance of corporations
Types of Capital
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
Driving forces for strategic perspective
1. Globalization
2. Technology
3. Intellectual Capital
Company Vision
– inspiring
– overarching
– long term
– driven by and evokes passion
– fundamental statement of the organizations
> values
> aspiration
> goals
Company Mission Statement
– purpose of the company
– basis of competition and competitive advantages
– more specific than vision
– focused on the means by which the firm will compete
Strategic Objectives
– operationalize the mission statement
– provide guidance on how the organization can fulfill or move toward the higher goals
– SMART
– yardstick for rewards and incentives

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