Title: Overview of Strategic Management

INTRODUCTION:
1
The greatest challenge for a successful organization is change. This threatening change
may either be internal or external to the enterprise. Strategic management can be defined as
the art and science of formulating, implementing, and evaluating cross-functional decisions
that enable an organization to achieve its objectives. It is more often used in the business
world. It focuses on integrating management, marketing, finance/accounting,
production/operations, research and development, and information systems to achieve
organizational success
This module covers the following aspects:

o Strategic Management Process

o Definition and examples of key terms in Strategic Management
o Nature of Strategic Management Process
o Benefits of good strategic management

INTENDED LEARNING OUTCOMES

1. Discuss the task of strategic management, strategic analysis, factors that shape an
organization’s strategy, evolution of strategy and benefits of good strategic
management.
2. Present an analysis of what is happening in the world now and think about how those
events relates/affects the business world.
3. Integrate social issues and concerns in analyzing the business world nowadays.

INSTRUCTIONAL MATERIALS
1. Lecture Notes
The concept of strategy

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 - A strategy is an administrative course of action designed to achieve success in the
face of difficulties. It is a plan for meeting challenges posed by the activities of
competitors and environmental forces. Strategy is the complex plan for bringing
the organization from a given state to a desired position in a future period of time.
For example, if management anticipates price-cut by competitors, it may decide
upon a strategy of launching an advertising campaign to educate the customers
and to convince them of the superiority of its products.

Nature of strategy
- Strategy is a contingent plan as it is designed to meet the demands of a difficult
situation.
- Strategy provides direction in which human and physical resources will be
deployed for achieving organizational goals in the face of environmental pressure
and constraints.
- Strategy relates an organization to its external environment. Strategic decisions
are primarily concerned with expected trends in the market, changes in
government policy, technological developments etc.
Components of strategy

1. Scope - refers to the breadth of a firm’s strategic domain i.e., the number and types of
industries, product lines, and markets it competes in competes in or plans to enter.

2. Goals and objectives - these specify desires such as volume growth, profit
contribution or return on investment over a specified period.
3. Resource deployment- strategy should specify how resources are to be obtained and
allocated across businesses, product/markets, financial departments, and activities.
4. Identification of a sustainable competitive advantage - it refers to examining the
market opportunities in each business and product-market and the firm’s distinctive
competencies or strengths relative to competitors.
5. Synergy; this exists when the firm’s businesses, products, markets, resource
deployments and competencies complement one another.
Strategic Management
Strategic management is a set of managerial decisions and actions that determines the
long-run performance of a corporation. It includes environmental scanning (both external and
internal), strategy formulation (strategic or long-range planning), strategy implementation,
and evaluation and control.

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 The study of strategic management, therefore, emphasizes the monitoring and
evaluating of external opportunities and threats in light of a corporation’s strengths and
weaknesses. Originally called business policy, strategic management incorporates such topics
as strategic planning, environmental scanning, and industry analysis.
Strategic Management Process
The process can be broken down into three phases;
1. Strategy formulation
2. Strategy implementation
3. Strategy control

Strategy formulation involves:

 defining the organization’s guiding philosophy & purpose or mission;
 establishing long-term objectives in order to achieve the mission;
 selecting the strategy to achieve the objectives

Strategy implementation involves;

 establishing short-range objectives, budgets and functional strategies to achieve the
strategy

Strategy control involves the following;

 establishing standards of performance;
 monitoring progress in executing the strategy;
 initiating corrective actions to ensure commitment to the implementation of the strategy

Key terms in Strategic Management

There are nine key terms:
1. Competitive advantage
2. Strategists
3. Vision and mission statements
4. External opportunities and threats,
5. Internal strengths and weaknesses
6. Long-term objectives
7. Strategies
8. Annual objectives, and
9. Policies.

Nature of Strategic Management Process

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Benefits of good strategic management

 It provides the organization with consistency of action i.e. helps ensure that all
organizational units are working toward the same objectives (direction).
 The process forces managers to be more proactive and conscious of their
environments i.e. to be future oriented.
 It provides opportunity to involve different levels of management, encourage the
commitment of participating managers and reducing resistance to proposed change

Sources:
http://www.allonlinefree.com/
http://www.rjspm.com/PDF/Strategic-Management-Notes-PDF.pdf http://www.freebookcentre.net/business-
books-download/Strategic-Management-I-Lecture-Notes.html)

2. Case Analysis

CASE1

Malden Mills

Sometimes, doing the right thing is more important than profits, a lesson that Malden Mills
learned firsthand. When the factory burned down in 1995 just two weeks before Christmas,
production halted and employees assumed they'd be out of work until the factory was rebuilt.
But CEO Aaron Feuerstein extended the employees 90 days at full pay, as well as 180 days
with benefits at a cost of $25 million to Malden Mills. After the factory was rebuilt and all of
the displaced workers were rehired, cooperation and productivity reached a new high, with
40% more business, 95% customer and employee retention, and a production increase from

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130,000 to 200,000 yards per week. However, since then, Malden Mills has been to
bankruptcy court three times, with much of the debt tied to the rebuild of the factory.
Feuerstein made employees happy, to be sure, but business students should study this case to
consider whether bold philanthropic actions will pay off in the end.

3. Case Analysis Contents

1. Introduction
a. Identify the key problems and issues in the case study.
b. Formulate and include a thesis statement, summarizing the outcome of your
analysis in 1–2 sentences.
2. Background
a. Set the scene: background information, relevant facts, and the most important
issues.
b. Demonstrate that you have researched the problems in this case study.
3. Evaluation of the Case
a. Outline the various pieces of the case study that you are focusing on.
b. Evaluate these pieces by discussing what is working and what is not working.
c. State why these parts of the case study are or are not working well.
4. Proposed Solution/Changes
a. Provide specific and realistic solution(s) or changes needed.
b. Explain why this solution was chosen.
c. Support this solution with solid evidence, such as:
i. Concepts from class (text readings, discussions, lectures)
ii. Outside research
iii. Personal experience (anecdotes)
5. Recommendations
a. Determine and discuss specific strategies for accomplishing the proposed
solution.
b. If applicable, recommend further action to resolve some of the issues.
c. What should be done and who should do it?

4. Case Analysis Rubric

Source: https://usm.maine.edu/sites/default/files/assessment/Rubric-CaseAnalysis_0.pdf

Module 1: Overview of Strategic Management Page 5

 5. Oral Discussion Rubric

6. Activity Output Rubric

https://www.gallaudet.edu/accreditation-certification-and-licensure/assessment/assessment-of-student-
learning/instructions-and-examples/developing-a-scoring-criteria-(rubrics)

7. Exercises

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 A. Discussion questions
1. Discuss the relevance of Sun Tzu’s The Art of War to strategic management.
2. Why has strategic management become so important to today’s corporations?
3. How does strategic management typically evolve in a corporation?
4. Why are strategic decisions different from other kinds of decisions?

B. Strategic Practice Exercise

Mission statements vary widely from one company to another.
1. Why is one mission statement better than another?
2. Develop criteria for evaluating any mission statement.
3. Using the Internet, find the mission statements of three different organizations, which
can be business or not-forprofit. (Hint: Check annual reports and 10K forms. They
can often be found via a link on a company’s Web page or through Hoovers.com.)
Which mission statement is best? Why?
4. Evaluate the following mission statement of Celestial Seasonings. How many points
would you give it?

“Our mission is to grow and dominate the U.S. specialty tea market by exceeding consumer
expectations with the best tasting, 100% natural hot and iced teas, packaged with Celestial art and
philosophy, creating the most valued tea experience. Through leadership, innovation, focus, and
teamwork, we are dedicated to continuously improving value to our consumers, customers,
employees, and stakeholders with a quality-first organization”

PROCEDURES/LESSON DEVELOPMENT

1. Communicate to the students the topics, learning objectives, activities and its rubrics
and the time allotted for this module.

2. Introduce the lecture notes to the students.

Run a small group discussion of the topics to ensure understanding of the topic.
Stress the fact that the lecture notes are guide for further readings/research. Ask the
students to take note important concepts and its implication for oral discussion with
graphic organizer as assessment to ensure understanding of the topic.

3. Introduce the rationale of case analysis, the format that has to be followed and how
the student’s output are to be rated.
Highlight the applicability of this tool in solving business issues and concerns.
Ask the students to critically analyze the case and relate any problem or success in the
actual setting as observed.
Lead students into seeing the implications of putting into practice the
theories/concepts discussed through solving cases and integrating current issues and
trends that challenge businesses.

4. Give the chapter test to assess learning of the students.

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 EVALUATION/ASSESSMENT

The performance of the students will be assessed using the following:

1. Graded Oral Discussion

2. Exercises
3. Case analysis output

SUMMARY
Strategy scholars Donald Hambrick and James Fredrickson propose that a good
strategy has five elements, providing answers to five questions:
1. Arenas: Where will we be active?
2. Vehicles: How will we get there?
3. Differentiators: How will we win in the marketplace?
4. Staging: What will be our speed and sequence of moves?
5. Economic logic: How will we obtain our returns?

Thank you ….

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