Chapter One

Strategic Management : Is that set of managerial decision and actions that determines the long-run performance of corporation . ** Strategic Management Include :1234Environmental Scanning . Strategy Formulation . Strategy Implementation . Evaluation and Control .

** Environmental Scanning Include :1- Internal 2- External

** Strategy Formulation :- Strategic or Long-range Planning . ** Study of Strategic Management Emphasizes the monitoring and evaluating of external opportunities and threats corporation , strengths and weaknesses . ** Phases of Strategic Management :1- Basic Financial Planning ( Very little analysis plus most information's coming from within the firm , it's usually one year ) 2- Forecast-Based Planning ( Internal Information's plus any available environmental data , its usually 3-5 years ) 3- Externally Oriented ( Strategic ) Planning Top management takes control of the planning process by initiating strategic planning . The company seeks to increase its responsiveness to changing markets and competition by thinking strategically . 4- Strategic Management Include : Input and commitment of lower-level managers . Top management forms planning groups of managers and key employees at many levels .

** Strategic plans details :1- Implementation 2- Evaluation 3- Control Issues

Q1: what is the effect that results from engage organization in strategic Management ? The attainment of an appropriate match or fit between an organization and its :a. Strategy b. Structure c. Processes Has positive effects on the organization performance .

Q2: Why lower-level managers important for the organization ? They task to develop strategic plans for the corporations(implementation issues )

Q3: Why Upper-level managers important for the organization ? They meet once a year , lead by key members of the planning staff to evaluate and update the current strategic plan .

** Benefits of Strategic Management :a. Clearer sense of strategic vision for the firm . b.Sharper focus on what is Strategically important . c. Improved understanding of a rapidly changing environment .

** Impact Of Globalization

Internationalization Of Market And Corporation's

Change The Way To Do Business

Reach The Economies Of Scale

Low Costs, Low Prices , Needed to be Competitve

Companes are now thinking of a global Market instead of National market

** Electronic Commerce Refers to the use of the internet to conduct business transactions . The effect of internet :a. Changing the way Customers . b. Suppliers . c. Companies . d. Changing the way companies work internally .

The internet either causes seven current world-wide trends :a. It's forcing companies to transform themselves . b. New channels are changing market access and branding ( working directly with customers , improving service and reducing costs ). c. The balance of power is shifting to the consumer . d. Competition is changing . e. The pace of business is increasing drastically . f. The internet is pushing corporations out of their traditional boundaries . g. Knowledge is becoming a key asset and source of competitive advantage .

** Learning Organization An organization skilled at creating acquiring and transferring knowledge and modifying its behavior to reflect new knowledge and insights .

Learning organization are skilled at four main activities : Solving problems systematically . Experimenting with new approaches . Learning from their own experience and past history as well as from the experiences of others . Transferring knowledge quickly and efficiently throughout the Organization

Organization knowledge is composed of three basic strength : Technical skills . Mainly in research . Functional knowledge .

Basic of Strategic Management : Environmental Scanning . Strategy Formulation . Strategy Implementation . Evaluation and Control .

*** Environmental Scanning :Is the monitoring , evaluation , and disseminating of information from the external and internal environment's to key people within the corporation .

Strengths

Opportunities

SWOT

Weaknesses

Threats

Task Environment : Shareholders Creditors Customers Suppliers Competitors Government Employee labor unions

Social Environment : Economic Forces Social cultural Political-legal forces Technological forces

*** Strategy Formulation :Is the development of long-range plans for the effective management of environmental opportunities and threats in light of corporate SWOT .

Strategy Formulation Include : Defining the corporate mission Specifying achievable objectives Developing strategy Setting policy guidelines

** Mission :describes what the organization is now ( mission statement promotes a sense of shared expectations is employees and communicates a public image .

A narrow mission statement :Turbulent industry because its keeps the firm focused on what it does best .

A broad mission statement :Stable environment that lacks growth opportunities .

** Objectives :Are the end results of planned activity .

Goals and objectives for organization : Profitability Efficiency Growth Shareholders wealth Market leadership Reputations

** Strategies :Types of strategy :1- Corporate Strategy :Describes a company's overall direction in term of its general attitude toward growth and the management of its various business and product line . Categories :- Stability - Growth - Retrenchment

2- Business strategy :Occurs at business unit or product level, and emphasize improvement of the competitive position of product at specific industry . Categories :- Competitive - Cooperative strategies

3- Functional strategy :Is the approach taken by a functional area to a chive corporate and business unit objectives and strategies by maximizing resource productivity .

A hierarchy of strategy :Is a grouping of strategy types by level in the organization .

** Policies :Is a broad guideline for decision making that links the formulation of a strategy with it's implementation . Q : why companies use policies ? To make sure that employees throughout the firm make decision and take actions that support the corporation mission, objectives and strategies.

*** Strategy Implementation :Is a process by which strategies and policies are put into action through the development of programs , budgets and procedures .

Middle-level managers

Day-to-day decision in resource

with review by Top managment

lower-level managers

Implementatio n Of Strategy

Programs :Is a statement of the activates or steps needed to accomplish a single-use plan .

Management decided to implement program : Outsource manufacturing . Reduce final assembly time . Use new , lightweight compose materials in place of aluminum to reduce inspection time. Resolve poor relation with labor unions caused by downsizing and outsourcing .

- Budgets :Is a statement of a corporations programs in terms of dollar . ( used planning and control ) ( a budget lists , the detailed cost of each program )

- Procedures :Its call Standard Operating Procedures ( SOP ) are a system of sequential steps or techniques that describe in detail how a particular take or job is to be done .

*** Evaluation and Control :Is a process in which corporate activities and performance results are monitored so that actual performance can be compared with desired perform .

Q : how Evaluation and Control important ? It's important for managers at all levels to use the resulting information to take corrective action and resolve problems .

** Triggering Event :Is something that acts as a stimulus for a change in strategy .

- Possible triggering events : New CEO. External intervention . Threat of change in ownership . Performance gap . Strategic inflection point .

What makes a decision strategic ? "Its deal with long run " 1- Rare :- strategic decision are unusual and typically have no precedent to follow . 2- Consequential :- strategic decisions commit substantial resources and demand a great deal of commitment from people at all levels . 3- Directive :- strategic decisions set precedents for lesser decisions and future actions throughout organization .

** Mintzberg's modes of strategic decision making :1- Entrepreneurial Mode Strategy is made by one powerful individuals . The focus on opportunities problems are secondary . The dominate goal is growth of the corporation . 2- Adaptive Mode Muddling through this characterized by reactive solution to existing problems rather than a proactive search for now opportunities . Universities , many large hospitals , large number of government agencies , and surprising number of large corporation . 3- Planning Mode Involves : The systematic gathering of opportunities information for situation analysis. The generation of feasible alternative strategy . The rational selection of the most appropriate strategy . Planning Mode include both : Proactive search for new opportunities ( Entrepreneurial Mode ) The reactive solution of existing problems ( Adaptive Mode )

4- Logical Incrementalism Can viewed as synthesis of the planning, adaptive and to a lesser extent , the entrepreneurial modes.

Strategic decision-making process : Evaluate current performance results . Review corporate governance . Scan and assess the external environment . Scan and assess the internal corporate environment . Analyze strategic ( SWOT ) factor's . Generate, evaluate, and select the best alternative strategy . Implement selected strategies . Evaluate implemented strategies .

The Strategic Audit :Provides a chick list of questions , by area issue that enables a systematic analysis to be made of various corporate function and activities .

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