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Management
Basic Concepts of Strategic Management
Learning Objective
After finishing this chapter, you should be able to
• Understand the benefits of strategic management,
• Explain how globalization and e-commerce influence strategic
management,
• Understand the basic model of strategic management,
• Identify some triggering events that act as stimuli for strategic change,
• Understand strategic management decision making modes,
• Use the strategic audit as a method of analyzing corporate functions and
activities.
wildlife Climate
SWOT Analysis
• SWOT is an acronym used to describe the particular
strengths, weaknesses, opportunities, and threats,
that are strategic factors for a specific company.
• The external environment consists of variables
(opportunities, and threats)that are outside the
organization and not typically within the short run
control of top management. These variables from the
context within which the corporation exists
SWOT Analysis
• The internal environment of a corporation consists of
variable(strengths, weaknesses) that are within the
organization itself and are not usually within the
short run control of top management. These
variables from the context in which work is done.
They include the corporation’s structure, culture, and
resources, key strengths from a set of core
competencies that the corporation can use to gain
competitive advantage.
Mission Statement
Policies
• 1. Policies include guidelines, rules, and procedures
established to support efforts to achieve stated
objectives.
• 2. Policies are most often stated in terms of
management, marketing, finance/accounting,
production/operations, research and development,
and computer information systems activities.
• Examples: smoking policy, recruitment policy
Performance
• Performance is the end result of activities, it includes the
outcomes of the strategic management process. The practice
of strategic management is justified in terms of its ability to
improve an organization’s performance, typically measured in
terms of profits and return in investment. For evaluation and
control to be effective, managers must obtain clear, prompt,
and unbiased information from the people below them in the
corporation’s hierarchy. Using this information, managers
comparing what is actually happening with what was
originally planed in the formulation stage.
Mintzberg’s Modes
– Entrepreneurial mode: the strategy is made by powerful
individual. The focus on opportunities. The dominant goal
is growth of the corporation
– Adaptive mode: using reactive solution rather than
proactive search for new opportunities.
– Planning mode: it uses reactive and proactive mode. Data
gathering and analysis and select strategies.
– Logical incrementalism: strategy is set based on a series of
incremental commitment rather than through global
formulation of total strategies. This suitable when
environment is changing rapidly. Thus, although the
mission and objectives are set, the strategy is allowed to
emerge out of debate, discussion, and experimentation