Strategic Management: Environmental Scanning and SWOT Analysis
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Questions and Answers

What is the purpose of environmental scanning?

  • To evaluate information from internal environments only
  • To identify strategic factors determining the future of the corporation (correct)
  • To predict the future accurately
  • To identify internal factors

    • Which of the following is true about SWOT Analysis?

  • It is used to conduct environmental scanning (correct)
  • It stands for strengths, weaknesses, opportunities, and transactions
  • It predicts the future accurately
  • It only focuses on external factors

    • Who typically controls the internal environment of a corporation?

  • Customers
  • Top management (correct)
  • Suppliers
  • Middle management

    • What are examples of external factors in the external environment of an organization?

    <p>Technological factors and legal factors</p> Signup and view all the answers

    What is one drawback of environmental analysis mentioned in the text?

    <p>It does not predict the future or eliminate uncertainty</p> Signup and view all the answers

    Why are external factors not typically within the control of top management?

    <p>Because external factors are outside the organization's boundaries</p> Signup and view all the answers

    What is the main goal of a capstone course in business schools?

    <p>To integrate knowledge across different business fields</p> Signup and view all the answers

    Which of the following best describes the characteristic of strategy as a Systematic Phenomenon?

    <p>Comprises a unified and comprehensive plan of action</p> Signup and view all the answers

    How does the text define strategy as Multidisciplinary?

    <p>Strategy involves a holistic view and influences various functional areas</p> Signup and view all the answers

    What characterizes strategy as Hierarchical according to the text?

    <p>Corporate strategies are decided by the top management</p> Signup and view all the answers

    Which of the following is NOT true about strategy as mentioned in the text?

    <p>Strategy involves contradictory action plans</p> Signup and view all the answers

    What role does a chief strategy officer (CSO) play in many companies today?

    <p>Bringing synergy between different functional areas for strategic planning</p> Signup and view all the answers

    What is the main focus of policies in an organization?

    <p>Achieving corporate goals</p> Signup and view all the answers

    At what level of strategy formulation does the focus shift to how an organization is going to grow?

    <p>Functional level strategy</p> Signup and view all the answers

    What is the primary concern of corporate level strategy?

    <p>What businesses to enter the market</p> Signup and view all the answers

    Which of the following is NOT a part of corporate level strategy considerations?

    <p>How to compete effectively</p> Signup and view all the answers

    What is the last step after formulating a strategy in an organization?

    <p>Effective implementation</p> Signup and view all the answers

    In which level of strategy formulation is the focus on how the organization is going to compete in the market?

    <p>Business level strategy</p> Signup and view all the answers

    What is emphasized as a key factor for effective strategic management?

    <p>Learning process for all managers and employees</p> Signup and view all the answers

    Why should strategic management welcome bad news?

    <p>To address issues promptly</p> Signup and view all the answers

    What is an important consideration in shaping a company's strategy according to the text?

    <p>Societal, political, regulatory, and citizenship factors</p> Signup and view all the answers

    How should a company tailor its strategy according to competitive conditions?

    <p>Adapt strategy to fit industry and competitive conditions</p> Signup and view all the answers

    What is the significance of social expectations and ethical considerations in shaping a strategy?

    <p>They play a vital role in shaping a strategy</p> Signup and view all the answers

    Why is it important for strategic management to be a people process?

    <p>To involve all managers and employees in the process</p> Signup and view all the answers

    What is the main difference between strategy and management in strategic management?

    <p>Strategy focuses on achieving long-term goals, while management focuses on controlling things or people.</p> Signup and view all the answers

    What does the term 'strategic management' encompass?

    <p>Formulating, implementing, and evaluating decisions to achieve long-term goals.</p> Signup and view all the answers

    What is the purpose of strategic management?

    <p>To exploit and create new opportunities for the future.</p> Signup and view all the answers

    How did Sun Tzu contribute to the concept of strategic management?

    <p>He emphasized that strategic management has an art component through his book 'The Art of War'.</p> Signup and view all the answers

    How does strategic management relate to the organization's future direction?

    <p>It involves making decisions about the organization's future direction.</p> Signup and view all the answers

    In what context did the concept of strategy originate from?

    <p>Military principles, particularly in planning to win a war.</p> Signup and view all the answers

    Study Notes

    Strategic Management Definition

    • Strategic management is the art and science of formatting, implementing, and evaluating cross-functional decisions to achieve an organization's long-term goals and objectives.
    • It involves making decisions about an organization's future direction and implementing those decisions.

    History of Strategic Management

    • The concept of strategy is derived from military principles, where a strategy is a plan of action to win a war.
    • The ancient Chinese strategist Sun Tzu wrote about strategic management in his book "The Art of War".
    • The term "strategic management" is used synonymously with "strategic planning".
    • The goal of strategic management is to exploit and create new opportunities for tomorrow.

    Characteristics of Strategic Management

    • Hierarchical: Corporate strategies come first, followed by business unit strategies, and then functional strategies.
    • Dynamic: Strategic management is a dynamic system that involves a series of action plans.
    • Multi-dimensional: Strategic management involves multiple disciplines, including marketing, finance, human resource, and operations.

    Environmental Scanning

    • Environmental scanning is the monitoring, evaluating, and dissemination of information from internal and external environments.
    • Its purpose is to identify strategic factors that will determine the future of the corporation.
    • External environment consists of opportunities and threats outside the organization, such as technological, legal, and social factors.
    • Internal environment consists of variables within the organization, such as company structure, culture, and resources.

    Levels of Strategy Formulation

    • Corporate level strategy: Outlines what the organization wants to achieve, such as growth, stability, or acquisition.
    • Business level strategy: Answers how the organization will compete, focusing on strategic business units (SBU).
    • Functional level strategy: Concentrates on how the organization will grow, defining daily actions and allocating resources.

    Strategy Implementation

    • Strategy implementation is the action stage, where formulated strategies are put into practice.
    • Effective implementation is crucial for the success of a strategy.

    Guidelines for Effective Strategic Management

    • Strategic management should be a people process, not just a paper process.
    • It should be a learning process for all managers and employees.
    • Keep the process simple and varied.
    • Welcome bad news and be open-minded.
    • Do not propose too many strategies at once.

    Factors That Shape a Company's Strategy

    • Societal, political, and regulatory considerations affect crafting strategy.
    • Competitive conditions and industry attractiveness, such as price, product quality, and service, shape a strategy.
    • Economic, societal, political, and citizenship factors limit strategic actions a company can take.

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    Description

    Learn about environmental scanning, which involves monitoring and evaluating internal and external environments to identify strategic factors affecting a corporation's future. Discover how to conduct environmental scanning through SWOT Analysis, which assesses strengths, weaknesses, opportunities, and threats.

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