SELF-PACED LEARNING MODULE

COLLEGE DEPARTMENT

MODULE 3
Subject:
GE10 - BL
GE ELECTIVE - BUSINESS LOGIC

AISAT COLLEGE – DASMARIÑAS, INC.

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 Unit GE ELECTIVE - BUSINESS LOGIC
Systems Development and Documentation
Module
Techniques
GE10 - BL GE ELECTIVE - BUSINESS LOGIC Units: 3 Page |2

INFORMATION SHEET PR-3.1.1

“STRATEGIC LEADERSHIP: STRATEGY MAKING PROCESS FOR COMPETITIVE
ADVANTAGE”

Learning Objectives:
 Explain what is meant by "competitive advantage"
 Discuss the strategic role of managers at different levels in an organization
 Identify the main steps in a strategic planning process
 Discuss the main pitfalls of planning and how those pitfalls can be avoided
 Outline the cognitive biases that might lead to poor strategic decisions and explain how
these biases can be overcome

Topics to be Discussed:

Strategy set of related actions that managers take to increase their company's
performance.

Strategic leadership creating competitive advantage through effective management of the

strategy-making process.

Strategy formulation selecting strategies based on analysis of an organization's external

and internal environment.

Strategy implementation putting strategies into action

Strategic leadership is concerned with managing the strategy-making process to increase

the performance of a company. To do this, a company must be able to outperform its rivals;
it must have a competitive advantage.

Superior Performance
Maximizing shareholder value is the ultimate goal of profit-making companies, for two
reasons:

a. First, shareholders provide a company with the risk capital that enables managers to buy
the resources needed to produce and sell goods and services.

b. Second, shareholders are the legal owners of a corporation, and their shares, therefore,
represent a claim on the profits generated by a company.

SUBJECT TEACHER: APPROVED FOR

IMPLEMENTATION:
MODULE 1st
PRELIM MARJORIE ROSE GUARINO
1 Meeting
Subject Teacher MR. WILBERT A. MAÑUSCA
School Director
 Unit GE ELECTIVE - BUSINESS LOGIC
Systems Development and Documentation
Module
Techniques
GE10 - BL GE ELECTIVE - BUSINESS LOGIC Units: 3 Page |3

Risk capital is capital that cannot be recovered if a company fails and goes bankrupt.
Shareholders will not provide risk capital unless they believe that managers are committed
to pursuing strategies that provide a good return on their capital investment.

Profitability is the return that it makes on the capital invested in the enterprise. It is the
result of how efficiently and effectively managers use the capital at their disposal to
produce goods and services that satisfy customer needs.

A business model is managers' conception of how the set of strategies their company
pursues should work together as a congruent whole, enabling the company to gain a
competitive advantage and achieve superior profitability and profit growth. A business
model encompasses the totality of how a company will:

1. Select its customers.

2. Define and differentiate its product offerings.
3. Create value for its customers.
4. Acquire and keep customers.
5. Produce goods or services.
6. Lower costs.
7. Configure its resources.
8. Achieve and sustain a high level of profitability.

Strategic Managers
Managers must lead the strategy making process. In most companies, there are two
primary types of managers:

A. General managers who bear responsibility for the overall performance of the company
or for one of its major self-contained subunits or divisions.

B. Functional managers who are responsible for supervising a particular function, that is,
a task, activity, or operation, such as accounting, marketing, research and development
(R&D), information technology, or logistics.

There are THREE main levels of management: Corporate, Business, and Functional.

1. Corporate-Level Managers
The corporate level of management occupy the apex of decision making within the
organization. It consists of the chief executive officer (CEO), other senior executives,
corporate staff.

SUBJECT TEACHER: APPROVED FOR

IMPLEMENTATION:
MODULE 1st
PRELIM MARJORIE ROSE GUARINO
1 Meeting
Subject Teacher MR. WILBERT A. MAÑUSCA
School Director
 Unit GE ELECTIVE - BUSINESS LOGIC
Systems Development and Documentation
Module
Techniques
GE10 - BL GE ELECTIVE - BUSINESS LOGIC Units: 3 Page |4

The CEO is the principal general manager. In consultation with other senior executives, the
role of corporate-level managers is to oversee the development of strategies for the whole
organization. This role includes:

a. defining the goals of the organization,

b. determining what businesses it should be in
c. allocating resources among the different businesses,
d. formulating and implementing strategies and providing leadership for the entire
organization

2. Business-Level Managers
A business unit is a self-contained division (with its own functions—e.g., finance,
purchasing, production, and marketing departments) that provides a product or service for
a particular market.
The principal general manager at the business level, or the business-level manager, is the
head of the division. The strategic role of these managers is to:

a. translate the general statements of direction and intent that come

from the corporate level into concrete strategies for individual businesses.
b. business-level general managers are concerned with strategies that are specific to a
particular business.

The general managers in each division work out for their business the details of a business
model that is consistent with this objective.

SUBJECT TEACHER: APPROVED FOR

IMPLEMENTATION:
MODULE 1st
PRELIM MARJORIE ROSE GUARINO
1 Meeting
Subject Teacher MR. WILBERT A. MAÑUSCA
School Director
 Unit GE ELECTIVE - BUSINESS LOGIC
Systems Development and Documentation
Module
Techniques
GE10 - BL GE ELECTIVE - BUSINESS LOGIC Units: 3 Page |5

3. Functional-Level Managers
Functional-level managers are responsible for the specific business functions or operations
(human resources, purchasing, product development, customer service, etc.) that
constitute a company or one of its divisions. Thus, a functional manager's sphere of
responsibility is :

a. generally confined to one organizational activity

b. Functional managers nevertheless have a major strategic role: to develop functional
strategies in their area that help fulfill the strategic objectives set by business- and
corporate-level general managers.
c. Functional managers provide most of the information that makes it possible for business-
and corporate-level general managers to formulate realistic and attainable strategies.
Indeed, because they are closer to the customer than is the typical general manager,
functional managers themselves may generate important ideas that subsequently become
major strategies for the company.

The Strategy-Making Process

A Model of the Strategic Planning Process

The formal strategic planning process has five main steps:

1. Select the corporate mission and major corporate goals.

2. Analyze the organization's external competitive environment to identify opportunities
and threats.
3. Analyze the organization's internal operating environment to identify the organization's
strengths and weaknesses.
4. Select strategies that build on the organization's strengths and correct its weaknesses in
order to take advantage of external opportunities and counter external threats. These
strategies should be consistent with the mission and major goals of the organization. They
should be congruent and constitute a viable business model.
5. Implement the strategies.

SUBJECT TEACHER: APPROVED FOR

IMPLEMENTATION:
MODULE 1st
PRELIM MARJORIE ROSE GUARINO
1 Meeting
Subject Teacher MR. WILBERT A. MAÑUSCA
School Director