Strategic Management - An Introduction Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. The employees become more trustworthy, more committed and more satisfied as they can co-relate themselves very well with each organizational task. Van de Ven and Huber 1990. Harrington, Business Process Improvement New York: McGraw-Hill, 1991 ; E. Common examples of processes include new product development, order fulfillment, and customer service; less obvious but equally legitimate candidates are resource allocation and decision making. Selznick, Leadership in Administration Berkeley: University of California Press, 1957 , pp. With employment, mankind stepped into an era of rapidly growing wealth, industrial revolution, unheard of productivity, scientific progress, arts, music and literature unsurpassed until this day.
People Focusing on the strengths of your staff may be the optimal competitive strategy when your products or services aren't vastly different from others that are readily available. Precisely because middle and first-line managers are the ones who will be asked to understand and implement the strategies, they should also help to formulate them. You may project an intention to open five stores in the next ten years without knowing what the real estate market or demand for your product will look like that far into the future. The last stage in the strategic planning process of an international firm is evaluation and control. Active scanning focuses attention on information resources that span the broad areas of social, technological, economic, environmental and political sectors--locally, regionally, nationally, and globally.
Kane 1986 ; and Melan 1985 and 1989. These are the kinds of questions that form the grist for forecasting. Visions are broad long term images of the company with which managers communicate where they are today, what they do and where they envision their business in future. Rosenkrantz, Real Managers Cambridge, Massachusetts: Ballinger, 1988 ; and Mintzberg 1973. Typically, the change agent does not attempt to gain insight into possible resistance to the change and does not consult with impacted units or individuals. In a variation of this strategy, it can increase its promotion and marketing efforts to try to expand its market share. Within organizations, these inputs and outputs can be as varied as materials, information, and people.
Hammer and Champy 1993 , pp. It keeps the planning and implementation phases of the management system on target by helping the organization adjust strategies, resources, and timing, as circumstances warrant. If you plan to open five stores in ten years, you'll need to open them one by one, and the opening nearest at hand is your most urgent goal. Pathways to the Future: Linking environmental scanning to strategic management. Strategists study the past to plan for the future. Now, if you do not feel yourself strong, you just need to turn to professionals. Selling middle managers on changes to overcome their resistance is: strategy implementation Tom and his family have developed a successful business selling a liquid spray fertilizer to other farmers in his area.
Indeed, the emphasis on anticipating the needs of stakeholders is a critical component of external analysis. Davenport 1993 , chapter 7; Hammer and Champy 1993 , chapter 3; Harrington 1991 , chapter 6; and Kane 1986. Assessment of the vision and Mission of the Organization Every company must choose the terrain that it will compete on, what products or services it will sell and how these products or services differ from those of its competitors. The risk, of course, is that you are vulnerable if a rival gets the jump on you, or if an act of God intervenes, and your entire business may go under Which of the following would be considered a reason for adopting strategic management and strategic planning? Kotter, The General Managers New York: Free Press, 1982 ; Mintzberg 1973 ; and H. For studies on growth, see: W. I undertook such an analysis some 50 years ago.
Ancona and Nadler 1989 , p. The store also hired two new employees to handle increase in customer traffic. It is nothing but the art of managing employees in a manner which maximizes the ability of achieving business objectives. The second stage of the strategic management process is strategy formulation. Actually, far from being a straitjacket for new ideas, strategic planning can help encourage them by stressing the importance of innovation in achieving long-range success False Strategic-management expert Michael Porter suggested in his Porter's model for industry analysis that business-level strategies originate in five primary competitive forces in the firm's environment: 1 threats of new entrants, 2 bargaining power of suppliers, 3 bargaining power of buyers, 4 threats of substitute products or services, and 5 rivalry among competitors False The cost-leadership strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market. Which of the following is the source of Service Magic's strategic position?. An employer who would do that would fail, because almost all his expenses were on labour and only a tiny part on means of production.
Strategic planning provides a road map to help your business get from where you are now to where you want to be. Expertise Customers value expertise in businesses because it reassures them that they are dealing with the best. Devanna, The Transformational Leader New York: Wiley, 1986. Are we satisfied with the resilience of our current strategy, its flexibility to deal with different possible conditions? The good books imperatives: Keeping up in futures studies. Threats of substitute products and services.
The work of evaluating recent performance and planning creative, tactical moves for the next year is fundamentally different to the thinking needed to generate new products, identify new markets and pursue net new opportunities. Reorganization Rafaela is interested in learning more about what one of her competitors is doing so that she can anticipate its upcoming moves and react quickly. Creative leaders invite disruptive innovation, encourage others to drop outdated approaches and take balanced risks. Once the nature and the impact of the organizational transformation are understood, the transformation owner or champion will have the critical data needed to create an organizational transition plan. Strategic management does not replace traditional management activities such as budgeting, planning, monitoring, marketing, reporting, and controlling.