Chapter 1

Chapter Objectives After reading this chapter, you should have a good understanding of: The definition of strategic management and its four key attributes. The strategic management process and its three interrelated and principal activities. Why stakeholder management is so critical in the strategic management process and how "symbiosis" can be achieved among an organizations stakeholders. The key environmental forces that are creating more unpredictable change and requiring greater empowerment throughout the organization. How an awareness of a hierarchy of strategic goals can help an organization achieve coherence in its strategic direction.

4. How can "symbiosis" (interdependence, mutual benefit) be achieved among a firms stakeholders? 5. What are some of the major trends that now require firms to have a greater strategic management perspective and empowerment in the strategic management process throughout the firm? 6. What is meant by a "hierarchy of goals"? What are the main components of it and why must consistency be achieved among them?

Application Questions and Exercises

1. Go to the Internet and look up one of these company sites: www.walmart.com, www.ge.com, and www.ford.com. What are some of the key events that would represent the "romantic" perspective of leadership? What are some of the key events that depict the "external control" perspective of leadership? 2. Select a company that competes in an industry in which you are interested. What are some of the recent demands that stakeholders have placed on this company? Can you find examples of how the company is trying to develop "symbiosis" (interdependence and mutual benefit) among its stakeholders? (Use the Internet and library resources.) 3. Provide examples of companies that are actively trying to increase the amount of empowerment in the strategic management process throughout the organization. Do these companies seem to be having positive outcomes? Why? Why not? 4. Look up the vision statements and/or mission statements for a few companies. Do you feel that they are constructive and useful as a means of motivating employees and providing a

Summary Review Questions

1. How is "strategic management" defined in the text and what are its five key attributes? 2. Briefly discuss the three key activities in the strategic management process. Why is it important for managers to recognize the interdependent nature of these activities? 3. Explain the concept of "stakeholder management"? Why shouldnt managers be solely interested in stockholder management, that is, maximizing the returns for owners of the firmits shareholders?

strong strategic direction? Why? Why not? (Note: Annual reports, along with the Internet, may be good sources of information.) Ethics Questions 1. A company focuses solely on short-term profits to provide the greatest return to the owners of the business (i.e., the shareholders in a publicly held firm). What ethical issues could this raise? 2. A firm has spent some timewith input from managers at all levelsin developing a vision statement and a mission statement. Over time, however, the behavior of some executives is contrary to these statements. Could this raise some ethical issues?

How forces in the competitive environment can affect profitability. How a firm can improve its competitive position by increasing its power vis--vis forces in the competitive environment. How trends and events in the general environment and forces in the competitive environment are interrelated and affect performance. The concept of strategic groups and their strategy and performance implications.

Summary Review Questions

1. Why must managers be aware of a firms external environment? 2. What is gathering and analyzing competitive intelligence and why it is important for firms to engage in? 3. Discuss and describe the six elements of the external environment. 4. Select one of these elements and describe some changes relating to it in an industry that interests you. 5. Describe how the five forces can be used to determine the average expected profitability in an industry. 6. Explain how the general environment and industry environment are highly related. How can such interrelationships affect the profitability of a firm or industry? 7. Explain the concept of strategic groups. What are the performance implications?

Chapter 2
Chapter Objectives After reading this chapter, you should have a good understanding of: The importance of developing forecasts of the business environment. Why environmental scanning, monitoring, and collecting competitive intelligence are critical inputs to forecasting. Why scenario planning is a useful technique for firms competing in industries characterized by unpredictability and change. The impact of the general environment on a firms strategies and performance.

Application Questions
Application Questions and Exercises 1. Using published reports, select two CEOs who have recently made public statements regarding a major change in their firms strategy. Discuss how the successful implementation of such strategies requires changes in the firms primary and support activities. 2. Select a firm that competes in an industry in which you are interested. Drawing upon published financial reports, complete a financial ratio analysis. Based on changes over time and a comparison with industry norms, evaluate the firms strengths and weaknesses in terms of its financial position. 3. How might exemplary human resource practices enhance and strengthen a firms value-chain activities? 4. Using the Internet, look up your university or college. What are some of its key valuecreating activities that provide competitive advantages? Why? Ethics Questions 1. What are some of the ethical issues that arise when a firm becomes overly zealous in advertising its products? 2. What are some of the unethical issues that may arise from a firms procurement activities? Are you aware of any of these issues from your personal experience or businesses you are familiar with?