Strategic Management: Goals and Decisions

Strategic Management

• Strategic management involves managers from all parts of the organization for strategy formulation and implementation to achieve long-term goals
• Strategic management includes setting clear goals, planning, decision-making, adapting to change, and coordinating efforts
• Strategic management provides direction, encourages new ideas, and develops a sustainable competitive advantage

Competitive Advantage

• Competitive advantage is the ability to produce goods or services more effectively than competitors
• A sustainable competitive advantage means an organization can get and stay ahead by being responsive to customers, innovating, ensuring quality, and effectiveness

SMART Goals

• SMART goals helps set clear and achievable objectives
• S: Specific
• M: Measurable
• A: Attainable
• R: Results-oriented (goals should support the organization's vision)
• T: Target (deadline)

Decision Making

• A decision is a choice made from available alternatives, and decision making is the process of identifying and choosing a course of action

System 1 & 2

• System 1 thinking is intuitive and largely unconscious
• System 2 thinking is analytical and conscious

Rational Model

• The rational model describes how managers should make decisions logically, without emotion or biases
• The rational model is flawed due to complexity, constraints, cognitive capacity, imperfect information, information overload, and conflicting goals
• In the rational model, you first identify the problem or opportunity, then think up alternative solutions, evaluate those alternatives and select a solution, and finally implement and evaluate the chosen solution

Nonrational Model

• The nonrational model assumes decision-making is uncertain and risky, complicating optimal decisions
• Satisficing involves settling for a "good enough" solution rather than an optimal one
• Intuition involves making choices without conscious thought or logical interference, based on expertise and automated experience
• Bounded rationality acknowledges that decision-makers' rationality is limited by constraints

Organizational Citizenship Behavior (OCB)

• Organizational Citizenship Behavior (OCB) includes employee behaviors that exceed their job description
• OCBI (individual) involves going out of the way to help new employees or colleagues

Organizational Culture and HR Practices

• HR practices include training, providing resources, managing performance, and offering compensation and benefits to ensure a skilled and motivated workforce aligned with company goals

Standing out in a New Job

• To stand out in a new job, make good first impressions, observe workplace behavior, network, ask for advice, and overdeliver

Organizational Culture

• Organizational culture includes shared assumptions that guide behavior and influence company performance
• Artifacts are tangible elements of culture like logos and dress code
• Espoused values are stated values like integrity
• Underlying assumptions are unconscious beliefs that influence behavior

Organizational Structure

• Organizational structure is a formal system of task and reporting relationships that coordinates and motivates members to achieve goals

Clan Culture

• Clan culture has an internal focus, is flexible and encourages collaboration among employees
• Loyalty, trust, communication, and teamwork are all vital

Adhocracy Culture

• Adhocracy culture has a strong focus on customer satisfaction and innovation, encouraging entrepreneurship

Market Culture

• Market culture has an external focus and is stable, focused on results and competition

Hierarchy Culture

• Hierarchy culture has an internal focus and stability, focused on structure, rules, and procedures

Human Resource Management (HRM)

• Human Resource Management (HRM) involves planning for, attracting, developing, and retaining an effective workforce to ensure company success
• Human capital refers to the economic or productive potential of employee knowledge, experience, and actions

Internal & External Fit

• Internal fit means organizational values ​​are supported by HR practices
• External fit refers to how well HR practices align with the external environment

Hiring Strategies

• You can choose the best person for the job through background information, interviewing, and employment tests
• Structured interviews involve asking each applicant the same questions
• Situational interviews focus on hypothetical situations
• Behavioral interviews explore past actions
• Ability tests measure physical and mental abilities
• Performance tests measure performance on actual job tasks

Performance Management

• Performance management includes defining performance, monitoring and evaluating it, reviewing it, and providing consequences
• Define - Set goals and communicate performance expectations
• Monitor & Evaluate - Measure and evaluate progress and outcomes
• Review Performance - Deliver feedback and coaching
• Provide Consequences - Administer valued rewards and appropriate punishment

Performance Appraisal

• Performance appraisal is assessing employee performance and providing feedback
• Objective appraisals are based on facts and numbers
• Subjective appraisals are based on manager perceptions
• BARS (Behaviorally Anchored Rating Scale) rates employee performance according to specific behaviors

Organizational Change Factors

• Companies today compete on their ability to sense and respond to change faster than others
• The marketplace is becoming more segmented; some traditional companies may not survive change
• Offshore suppliers are changing work; knowledge is becoming the competitive advantage
• The employment landscape is shifting, affecting companies and workers

Three-Step Change Model

• The Three-Step Change Model is a framework for managing change in organizations
• The systems approach considers the interdependence of all organizational parts
• Unfreezing creates the motivation to change by "unfreezing" current behaviors
• Changing introduces new information, models, and procedures
• Refreezing supports and reinforces the change to make new behaviors permanent

Organizational Development

• Organizational Development includes techniques for implementing planned change to make organizations more effective
• Organizational Development improves an organization's ability to achieve its goals by making it a better place to work
• Organizational Development involves diagnosis, intervention, evaluation, and feedback