SANTO TOMAS COLLEGE OF AGRICULTURE,

SCIENCES AND TECHNOLOGY

Feeder Road 4, Barangay Tibal-og Santo Tomas Davao del Norte, 8112, Philippines

ABM 111
STRATEGIC MANAGEMENT

MODULE 3 TOPICS

Lesson 1: Government: The Business

Caretaker

Challenges in Lesson 2: Culture: A Communal

Convergence
Lesson 3: Stakeholders: The Business
the Internal Investors and

Environment

INTENDED LEARNING OUTCOMES

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Module No. MODULE 1
and Title

Lesson No. Lesson 1: Strategic Management Definition

and Title

Learning Identify each of the components of the strategic management process and
Outcome its corresponding outcome.

Time Frame 3 Hours

The Internal Environment

The internal environment is the setting in which an organization
locally exists. As one studies the local environment, there are existing
Abstraction unique and interrelated variables that directly affect any organization or
business. Understanding these variables is essential if one has to
conduct his organization successfully. These areas are government,
culture, the stakeholders, competitors, suppliers, customers, and
community.

Government: The Business Caretaker

The government is the sole legitimate institution tasked with

overseeing organizational operations in the country. In implementing
these administrative functions and responsibilities, the government
undertakes the following

Application Essay Writing:

1. What role does strategic control play in the strategic management of an

organization? Give 3 examples. 10 points
2. When does an organization enjoy competitiveness? Explain b giving an example.
10 points
3. Differentiate strategic intelligence from strategic thinking. Show this difference
using companies that have demonstrated the application of both processes. 20
points
4. Differentiate strategic analysis from strategic decision-making. Give an example.
10 points

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 Essay Rubrics
Outstanding Good Fair Poor Very Poor
5 points 4 points 3 points 2 points 1 point
 Well written  Writes fairly  Minimal  Somewhat  Lacking effort.
and very clear. effort. unclear. Very poor
organized.  Good Minimal  Shows little grammar
 Excellent grammar grammar effort. mechanics.
grammar mechanics. mechanics.  Poor grammar  Very unclear.
mechanics.  Good  Fair mechanics.  Does not
 Clear and presentation presentation.  Confusing and address topic.
concise and  Few choppy, Limited
statements. organization. supporting incomplete attempt.
 Excellent effort  Sufficient details. sentences.
and effort and  No
presentation detail. organization of
with detail. thoughts
 Demonstrates
a thorough
understanding
of the topic.

Lesson No. Lesson 2: Strategic Planning

and Title

Learning Discuss the meaning of strategic planning.

Outcome

Time Frame 3 Hours

Introduction Welcome to our lesson 2! This part will give you an information on what is
strategic planning all about and how it differs from strategic management.

To launch your understanding on the topic, give me a word or two that comes into your
mind when you hear or read the word:
Activity
1. Strategic planning
2. Organizational plan
3. Long-range plan

With your answers on the activity above, can you share your thoughts now? Do the above
words associate with each other? If yes, in what form? Expound your answer.
Analysis

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Abstraction

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Application
Essay Writing:

1. What are the disadvantages of conducting strategic planning? Will you still advise
organizations to conduct strategic planning? Why? 10 points
2. Discuss in what ways strategic management and strategic planning are similar. In
what ways are the two different?10 points
3. Give reasons why organizations undertake strategic planning. Do you agree with
these reasons? Explain your answers. 10 points

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 Essay Rubrics
Outstanding Good Fair Poor Very Poor
5 points 4 points 3 points 2 points 1 point
 Well written and  Writes  Minimal  Somewhat  Lacking
very organized. fairly effort. unclear. effort. Very
 Excellent clear. Minimal  Shows little poor
grammar  Good grammar effort. grammar
mechanics. grammar mechanics  Poor mechanics.
 Clear and mechani . grammar  Very
concise cs.  Fair mechanics. unclear.
statements.  Good presentati  Confusing  Does not
 Excellent effort presenta on. and choppy, address
and presentation tion and  Few incomplete topic.
with detail. organiza supporting sentences. Limited
 Demonstrates a tion. details.  No attempt.
thorough  Sufficien organization
understanding of t effort of thoughts
the topic. and
detail.

Lesson No.
and Title Lesson 3: Strengths and Limitations of Strategic Planning

Learning Formulate a sample company vision, mission statement, and company goals and
Outcomes objectives.

Time Frame 3 Hours

Introduction Well done! You are now on last part of our module. This lesson will deepen your
understanding in strategic planning as we will discuss its strengths and limitations.

To launch your understanding on the topic, give me a word or two that comes into your
mind when you hear or read the word:

Activity 1. Organizational vision

2. Mission statement
3. Organizational goals
4. Organizational objectives

With your answers on the activity above, can you share your thoughts now? Do the above
Analysis words associate with each other? If yes, in what form? Expound your answer.

Abstraction Strategic planning defines an organization's vision, mission, and set objectives. It
provides organizations the opportunity to assess the milieu and specify strategies to
achieve their goals Strategic planning helps organizations to stay focused. It makes things
happen. Furthermore, strategic planning helps reduce the chances of committing
mistakes, thus, increasing the organization's efficiency. Strategic planning helps in the
more efficient allocation of organizational resources, better collaboration among cross-
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 departmental employees and functional units, and communication between
managers/supervisors of all levels. Lastly, when cautiously, clearly, and proactively
undertaken, strategic planning provides leverage and competitive advantage to the
organization.

While strategic planning has its advantages, it also has its limitations. Although
conducted yearly or even more often, the strategic plans prepared in some instances are
good only "in paper Some organizations fail to follow faithfully their prepared strategic
plans. If in cases these strategic plans are followed religiously, some organizations may
not be flexible enough to make the needed adjustments and realignments due to inevitable
or forthcoming external or internal challenges. Similarly, conducting strategic planning
sessions may entail costs that can be expensive to organizations.

Figure 1.3 Relationship of

the Vision-Mission-Goals of an Organization

Organizational Vision

To help organizations achieve strategic direction, they need to articulate and have
a commonality in vision, mission, and goals. The interrelationships between and among
these three variables are essential in the organizations' thrust of achieving
competitiveness.
The organizational vision is an inspirational statement of what the organization
hopes to achieve at some point in the future. It is the image of what an organization
desires to achieve. It is short and succinct, but it carries an extraordinary force that will
stir, motivate, and inspire employees to work and refocus toward its desired optimal
future state. Having a strong sense of vision can move the organization to be what it
wants to be. Like an unseen force, the organizational vision binds the company and its
employees together.
An example of a vision statement is: "An educational institution ablaze with the
Spirit of Excellence. This is the vision statement of the educational institution, College of
the Holy Spirit Manila. The statement energizes the administrators, faculty, students, and
staff. It brings singleness in their desire and coherence in their efforts. Although difficult
and in fact, not measurable, the organizational vision is an effective mode of binding
everyone to a company's ultimate goal.

Mission Statement

The mission statement differs from the organizational vision. The mission
statement defines the current purpose of an organization; it answers what the organization
does, for whom it is done, and how it does what it does.
The mission statement of the College of the Holy Spirit Manila is as follows:
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 "We build, through Christian and holistic formation, new generations of responsible
citizens who are agents of transformation. Here, what the organization does is "to build";
it does this "for new generations of responsible citizens"; and how it does what it does is
"through Christian and holistic formation."
Mission statements are likewise short and easy to remember. It gives employees
a better perspective on how their tasks contribute to the attainment of organizational
goals. Oftentimes, vision statements are more enduring compared to mission statements.
Mission statements are expected to change in the context of shifting economic realities or
unexpected circumstances like challenges, threats, and even opportunities.

Organizational Goals and Objectives

To operationalize the mission statement, organizational goals and objectives are

defined. All organizations have set goals. These are referred to as organizational goals.
Organizational goals are pursued to make the specified strategies succeed. They vary and
are essentially dependent on their respective purpose and direction. One of the implied
basic goals of any organization is to use economic resources efficiently and effectively
such that survival, if not profit, is at least secured, thus, ensuring the continuity of the
organization. Goals are macro, encompassing in perspective, and prospective in nature. In
fact, goals represent the overall vision of an organization. By their very nature, goals have
the following properties:

1. Goals provide organizations focus and direction. They neatly converge toward the
purpose of any firm, thus, streamlining all unnecessary and redundant
considerations.
2. Goals move organizations to action. Because goals have to be attained,
organizations are motivated to function and perform toward their vision.
3. Goals develop in organizations the trait of persistence. Thus, organizations
continue to persevere until they achieve their desired success.

Nevertheless, for goals to be attained, they have to be supported by objectives.

Objectives are different from goals; in that they are micro and specific in perspective.
They should possess the following characteristics:

1. Objectives need to be clearly defined and formulated, carefully chosen, specific,

and definite.
2. Objectives may be immediate or short-term.
3. They need to be prioritized into a hierarchy of objectives.
4. Objectives need to be realistic and attainable. They need to be flexible, consistent,
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 and strategic.
5. Objectives need to be measurable over time.

The relationship between goals and objectives can be concretely illustrated. In

Figure 1.4, organizations have overall goals referred to as the organizational goal. To
support and achieve this grand goal, objectives are enumerated. These mentioned
objectives are actually the goals of the respective departments or business units that will
likewise have their own objectives. Because of these interrelationships, objectives need to
be consistently aligned and be within the framework of the given goal.

Figure 1.4 Relationship

between Organizational Goal and Objectives

Strategic objectives are, in general, externally focused. According to Peter Drucker

(2008). objectives fall into eight major classifications:

1. Market standing (e.g., desired share of the current and new markets);
2. Innovation (e.g., development of new goods, services, and of skills and methods
required to supply them);
3. Human resources (e.g., selection and development of employees);
4. Financial resources (e.g., identification of sources of capital and their uses);
5. Physical resources (e.g., equipment and facilities and their uses);
6. Productivity (e.g., efficient use of the resources relative to output);
7. Social responsibility (e.g., awareness and responsiveness to the effects on the
community of the stakeholders); and
8. Profit requirements (e.g., achievement of measurable financial well-being and
growth).

Values and Value System

Organizations are guided by values, which vary from one organization to

another. Values are inherent roots of motivation within an individual, an organization, a
community, or a nation. They are by nature, ingrained and thus, are more stable and
enduring. They are both intellectual and behavioral, serving as bases for the
organization's actions and way of thinking.
Values are generally exhibited in two different ways, namely, beliefs and
attitudes. More particularly, beliefs are cognitive manifestations while attitudes are
characteristically behavioral. They are fundamental and intricately integrated in the
particular organization's value system. Take note that the values projected by
organizations are largely dependent on any or all of the following: the stockholders, the
Board of Directors, and the top management.

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 Figure 1.5 Value System
of an Organization

Strictly speaking, the values of an organization are not synonymous to its value
system. The value system is characteristically broader in scope; aside from values, it
includes other variables such as the organization's dreams, aspirations, interests,
expectations, philosophies, as well as leadership and management styles and ethical
practices. Moreover, the value system indicates the hierarchy of values ranked by
organizations. Because values are distinct, they differ from one organization to another.
This explains why one organization may be perceived as socially and community-active,
while another is business-oriented. Hence, the importance of these value qualities and
value systems for organizations cannot be underestimated.

Organizational Climate and Culture

The concepts of organizational climate and culture are interrelated,

interdependent, and sequential. They are interrelated, in that organizational climate is
often defined as the regular and repetitive patterns of attitudes and behavior exhibited by
employees of an organization. It is a measure of the health of an organization. It manifests
whether its employees are happy, hardworking, and motivated, or otherwise; whether
good interpersonal relationships exist between and among different levels of
management; and whether the work environment is acceptable and conducive to
productivity. Organizational climate is easier to assess and change. It lends to flexibility.
It precedes and somehow contributes to the solidification of the culture of an
organization.
On the other hand, organizational culture has been variously defined (Hofstede
1980a; Schein 1990). Organizational culture denotes a wide range of social phenomena,
including an organization's customary dress, language, behavior, beliefs, values, symbols
of status and authority, myths, ceremonies and rituals, and modes of deference and
subversion; all of which help to define an organization's character and norms (Scott et al.
2003). Culture, in the sense that it is used here, can be understood as an idealized system
(Schein 1999) because a system focuses on types of meanings represented by values,
formal rules, knowledge, beliefs, and expressive forms (Pettigrew 1990; Parker 1992;
Patrick 2010).
Application
Essay Writing:

1. Why is the mission statement important to an organization? 10 points

2. What values/value system do you want an organization to demonstrate? Explain
your answer. 10 points

Discussion

1. Develop a new vision and mission statement for a business activity that you would
like to form as a business manager of a new small enterprise. 20 points
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