Strategic Management

Lecture Series
BUS 109

SEAN D. JASSO, PHD 2015

UCR SPRING 2015

a destination

requires a
conversion

demands intensive
corporate culture

adaptability

intelligence at all
levels
strong sense of
corporate mission

Benefits

clear sense of strategic vision

sharper focus on what is strategically
important

improved understanding and

adaptability to change

Basic Financial

requires organizational
learning
forces continuous
improvement

The true quality management

corporation

enables experimentation
with new approaches to
management
the true knowledge
organization

Planning

Forecast-Based
Planning

Externally Oriented
Planning (Strategic)

Strategic
Management

harnesses entrepreneurship / risk

embodies strategic thinking

The Model (12)

Environmental Scanning (gathering info)

External: Opportunities and Threats

Natural, societal, industry (task)

Structure organizational
Culture values
Resources assets and competencies

Internal: Strengths and Weaknesses

Strategy Formulation (developing plans)

Strategy Implementation (putting strategy into

action)

Evaluation and Control (Management)

Mission, objectives, strategies, policies

Programs, budgets, procedures

Measuring performance results

Business Policy note the subtitle

guidelines for decision making linking the
formulation of strategy with its
implementation

Strategic
Management
Model

The Framework Strategic

Audit

The Credo
The Ritz-Carlton Hotel is a place where the genuine care and comfort
of our guests is our highest mission.
We pledge to provide the finest personal service and facilities for
our guests who will always enjoy a warm, relaxed, yet refined
ambience.
The Ritz-Carlton experience enlivens the senses, instills well-being,
and fulfills even the unexpressed wishes and needs of our guests.

Financial Analysis (367)

Income Statement
Balance Sheet
US and Global Economic Indicators (373)
Worksheet (374)
Strategic Factors

SFAS, EFAS, SFAS (179)

TOWS (182)

Corporate Value

Created as a legal entity of the state

Largest aggregate wealth creators

Major benefit is its capacity of limited liability

Harness resources maximize scale and scope
Large contributor to national tax base

U.S. corp tax rate 35% (income tax rate 35%)

Brazil corp tax rate 34% (income tax rate 28%)
Russia tax rate 20% (income tax rate 13%)
India tax rate 33% (income tax rate 31%)
China tax rate 25% (income tax rate 45%)

Largest employers
Largest philanthropists

Structure of Governance
Board of Directors

Council of elders
Legally required
Set corporate mission, vision
Hire / fire CEO and senior executives
Control top management
Represent shareholder interests

1.

Board of Directors
Monitor issues, resources internal and
external

2.

3.

Evaluate and influence advice and

oversight

Initiate and determine objectives and

mission

stakeholder

Review use of major resources

Do Corporations Have
Social Responsibilities?

Carrolls Pyramid of Corporate Social

Responsibilities
PHILANTHROPIC
Desired
Begoodcorporatecitizens.

ETHICAL
Expected
Obligationtodowhatisrightandfair.
Avoiddoingharm.

LEGAL
Required
Obeythelaw.Lawissocietyscodificationof
rightandwrong.

ECONOMIC
Required
Beprofitable.TheFoundationonwhichallothersrest

Stages of Corporate
Citizenship
Stage One Elementary

Mirvis
and- Googins,
2006
Stage Two
Stage Three
Engaged

Innovative

Stage Four Integrated

Stage Five Transforming

Stakeholder
Management

Sustainability

Change the Game

Market
Creation/Social Chg

Citizen
Concept

Jobs, Profits,
Taxes

Philanthropic

Strategic
Intent

Legal
Compliance

License to
Operate

Business Case

Value
Proposition

Leadership

Lip Service, Out

of Touch

Supporter, In
the Loop

Steward, On Top
of It

Champion, In
Front of It

Visionary, Ahead of
It

Structure

Marginal: Staff
Driven

Functional
Ownership

Cross-Functional
Coord.

Org. Alignment

Mainstream:
Business Driven

Issues
Management

Defensive

Reactive
Policies

Responsive,
Programs

Pro-Active
Systems

Defining

Multi-Organization

Full Disclosure

Stakeholder
Relations

Unilateral

Interactive

Mutual Influence

Partnership
Alliance

Transparency

Flank Protection

Public Relations

Public Reporting

Assurance

BODs Responsibilities
Governance is not Management

1. CEO Selection
2. Oversight, Compliance, and Risk Management
3. Strategy Development
4. Responding to External Pressures and Unforeseen Events
5. Maintaining High Performance of the Board Itself

The Boards Central

Responsibilities

Strategy Development How Boards Should Engage

Fundamental Approach

Reviewing and approving strategic initiatives and directions

Assessing the risks that define and drive long-tern corporate performance

Framework for Strategic Activity

Setting ultimate direction of the corporation

Strategic Thinking
Strategic Decision Making
Strategic Planning
Strategy Execution

Strategic Choice Process

Agreeing in the company vision

Viewing the opportunity space
Assessing the companys business design and internal capabilities
Determining the companys future strategic intent (affirming initiatives)
Developing Business Design Prototypes (business model audit)

Understanding Our Industry

Defined
This outcome is achieved
when an organization is
implementing
a
valuecreating strategy that is not
being
implemented
by
competitors and when these
competitors are unable to
duplicate the benefits of this
strategy

Resources &
Capabilities

Competitive
Advantage

Strategy

Porter on The Five Forces

VRIO
Assessing your competitive advantage

1. Value customer value and competitive adv

2. Rareness do other competitors have it
3. Imitability costly for others to imitate
4. Organization exploit resources

Reflections on Welch

ON WINNING

The Enduring Questions

On Leadership

Be a change agent

Welchs Advice to
Graduates

Keep your people pumped

Build trust from the top down
Get elected boss
Surround yourself with smarter people

Welch's Advice to Graduates

BUSINESS
STRATEGY
COMPETITIVE METHODOLOGY

IN WHAT INDUSTRY SHOULD WE COMPETE

Strategic Management
Lecture Series
BUS 109

SEAN D. JASSO, PHD 2015

UCR SPRING 2015