BAM 221 Strategic Management and TQM P1 PDF

BAM 221: Strategic Management and TQM P1 STRATEGY VS. POLICY VS. TACTIC MODULE 1: Strategy - elaborate plan to achieve a certain organizational goal....

BAM 221: Strategic Management and TQM P1 STRATEGY VS. POLICY VS. TACTIC MODULE 1: Strategy - elaborate plan to achieve a certain organizational goal. It STRATEGIC MANAGEMENT - a field of study that involves the is a comprehensive plan that tells how an organization can attain its process through which firms define their missions, visions, goals, objectives. and objectives, as well as craft and execute strategies at various levels of the firms’ hierarchies to create and sustain a competitive Policy - a broad guideline for decision making of an organization. advantage. These guidelines make sure that actions are aligned to make sure that strategies are implemented right, and that organizational History of Strategic Management: objectives are met. Strategos (general) - “leader of the army”. Planning and execution in a war setting, while taking into consideration the strategy and Tactic - day to day operational business activities that support tactics required to implement the plan. strategies. Sun Tzu (400 BC) - space, quantities, and other factors, related is MODULE 2: similar to the characteristics of the positioning school. Calculations Traditional Perspective - process of strategy consists of analyzing underlie victorious situations in wars. the internal and external environments of the company to arrive at organizational strengths, weakness, opportunities, and threats Carl Von Clausewitz - “a variation of themes”, “open-ended and (SWOT). The results from this “situational analysis” as this process is creative” in a situation of chaos and disorganization. This makes a sometimes called, are the basis for developing missions, goals, more systematic and organized approach essential, which is why strategies. planning became a part of the process. The Resource-Based-View - a strategic framework that highlights a 1950’s-60’s - was viewed as a general perspective, with emphasis firm's internal resources as key to competitive advantage. For on the role of the leader. The focus was on leadership, interpersonal resources to be strategic, they must be valuable, rare, inimitable, and relationships, and the systems, process, and structures of the non-substitutable (VRIN). This approach focuses on leveraging organization. unique assets, such as skills, knowledge, or capabilities, to outperform competitors. The Dawn of 1980’s - Scholars emphasized more on strategy 1. Financial Resources - including all of the monetary implementation as a process. A shift in emphasis from the leader to resources from which a firm can draw. the development of organizational culture and its role in defining and 2. Physical Resources - such as land, buildings, equipment, implementing strategies. location, and access to raw materials. 1990’s - Globalization led to the emergence of network strategies 3. Human Resources - which pertains to the skills, background, and strategic alliances and it became a focal point around which and training of managers, and employees, as well as the researchers developed the literature. way they are organized.  4. Organizational Knowledge and Learning - refers to the tourism organizations. Services are produced and consumed processes through which organizations acquire, share, and simultaneously, requiring customer presence. utilize knowledge to improve performance and adapt to changes. It focuses on creating, retaining, and transferring 2. Simultaneity - are created to consume and consume knowledge within the organization. simultaneously, which can prevent employing active quality 5. General Organizational Resources - including the firm’s control mechanisms. In order to make sure that services are reputation, brand names, patents, contacts, and produced and offered to customers at an expected quality relationships with external stakeholders. that meets consistent standards. The production and consumption of services occur at the same time, making it The Stakeholder View - was developed as a direct response to the difficult to separate the provider from the service itself. concerns of managers who were being buffeted by increasing levels of complexity and the change in the external environment. The 3. Perishability - as production and consumption of hospitality existing strategy models were not particularly helpful to managers and tourism organizations are simultaneous, services will who were trying to create new opportunities during such a period of become highly perishable if they are not sold and their value radical change. will be lost forever. Services cannot be stored for later use MODULE 3: 4. Tangibility - hospitality and tourism organizations offer a combination of tangible and intangible products. While Hospitality and Tourism Context services are intangible, elements like food, ambiance, or The global hospitality market grew from $3,952.87B in 2021 facilities provide physical components to the experience. to $4,548.42B in 2022 (CAGR: 15.1%). Expected to reach $6,715.27B by 2026 (CAGR: 10.2%). 5. Heterogeneity - services provided by hospitality and tourism Growth partly due to recovery from global travel restrictions. Economic Context organizations may vary considerably. Services are highly Pre-pandemic, the global economy grew over 3% annually. variable, influenced by customer needs, staff behavior, and In 2021, growth accelerated to 5.5%, slowed to 4.1% in other situational factors. 2022, and is expected at 3.2% in 2023, approaching pre-pandemic levels. 6. Cost Structure - the cost structure of hospitality and tourism Impact firms influences their managerial and resource allocation Growth in hospitality supports global travel activity, boosting decisions. High fixed costs (e.g., infrastructure, both leisure and business accommodations. CHARACTERISTICS OF HOSPITALITY AND TOURISM maintenance) and variable costs (e.g., utilities, raw ORGANIZATION materials) characterize the industry. 1. Inseparability - the separation of production and marketing functions, which are important characteristics of the 7. Labor Intensive - installing machines and computers on a car traditional manufacturing industry, is not possible in the factory’s assembly line can reduce the number of service delivery process that is found in hospitality and employees. Hospitality heavily relies on human interaction,  requiring skilled and efficient personnel to deliver quality ○ Utilizes SWOT analysis to identify strengths, services. weaknesses, opportunities, and threats. 2. Strategic Direction ○ Focuses on long-term goals and mission/vision MODULE 4: statements. Hotels and Restaurants: Competitive Sector ○ Mission: Defines current purpose and operations. Provides accommodation, food, and experiences. ○ Vision: Forward-looking and strategic future Industry complexity is rising due to chains, franchising, and positioning. asset management. 3. Strategy Formulation Shift towards enhanced guest experience and efficient cost ○ Divided into three levels: control. Corporate-Level: Decides organizational Philippine Foodservice Market domain and where to compete. Types: Full-service, self-service, quick-service, cafes, bars, Business-Level: Focuses on specific areas and home delivery. for competition. 2021 Value: USD 10.37B; Growth: 7.83% CAGR Functional-Level: Details resource (2021–2026). allocation in operations, marketing, and Increasing demand for on-the-go options and global finance. cuisines. 4. Strategy Implementation Market leaders: McDonald’s, Starbucks, Jollibee, ○ Execution of strategies through stakeholder Foodpanda. management and resource allocation. Lodging Industry in the Philippines ○ Includes organizational control for adjustments in Tourism accounts for 12.7% of GDP (2019). strategies or direction. Tourist arrivals dropped 73% in 2020 due to COVID-19. MODULE 6: Recent years focused on infrastructure, promotion, and Strategic Thinking accessibility. - A pragmatic approach to critical thinking, focusing on the big Market Key Players picture and planning to gain a competitive business Major players: Ascot International, Best Western, Baymont advantage. Inns & Suites, Citadines, Crown Regency Hotels & Resorts. - Identifies unique opportunities, challenges assumptions, and Highly competitive market led by 15 dominant brands. encourages innovative ideas. Government initiatives encourage business and tourism Core Traits: expansion. ○ Broad view combined with detailed focus. MODULE 5: ○ Abstract yet actionable solutions. ○ Emphasis on overarching goals and embracing Strategic Management Process uncertainties. 1. Situation Analysis Characteristics of Strategic Thinkers ○ Evaluates internal and external environments of the 1. Strategic Foresight: Anticipates problems and develops organization. contingency plans. ○ Involves assessing stakeholders, socio-cultural, 2. Inquisitive Mind: Challenges conventional thinking by economic, technological, political, and legal factors. asking critical questions.  3. Flexible Attitude: Adapts when plans fail and incorporates Opportunities & Threats: External factors. new information. 2nd Phase: Strategy Formulation 4. Ability to Connect the Dots: Identifies patterns and trends Formulation of strategies is typically done by top-level management. across various elements. To formulate better strategies, the organization needs to understand 5. Contextualizing Information: Integrates past, present, and how strategy relates to different environmental factors. future perspectives for long-term planning. SWOT Analysis Relationships: 1. Strength + Opportunity: Utilize. MODULE 7: 2. Strength + Threat: Avoid. Strategic Management Process 3. Weakness + Opportunity: Exploit. Strategic Management is a systematic process. There are different 4. Weakness + Threat: Minimize. strategic management models that you can use, but the model Example: proposed by Wheelen and Hunger can be argued to be the simplest Opportunities: Courier industries during COVID-19 shifted yet effective. As you can see on the model above, the process focus to delivery services due to restaurant capacity involves four (4) phases namely: limitations. 1. Environmental Scanning Threats: Companies struggled due to lockdowns. Strategies 2. Strategy Formulation were required to minimize risks and ensure survival. 3. Strategy Implementation 3rd Phase: Strategy Implementation 4. Evaluation and Control This phase involves putting strategies and policies into motion. Key There are activities to be performed at every phase. The model activities include: broadly shows the activities to be considered at every phase. It is Designing programs, budgets, and procedures. straightforward and shows the process step by step. As you do your May involve minor or major organizational changes (e.g., strategic planning, I advise you to always keep the model in mind. change in menu, operations, or management). You could download it to your mobile phone for easier access to Implementation is carried out by: guide you through the process. Middle-level and lower-level managers. Supervised by top-level management. 1st Phase: Environmental Scanning 4th Phase: Evaluation and Control This is the phase of strategic planning where the environmental This phase ensures that the results and outputs of strategies are factors are taken into consideration. It involves identifying, monitored and compared to the desired results. monitoring, evaluating, and communicating pieces of information for If performance does not meet expectations, feedback is the internal and external environment to key people in the provided for revision. organization. Adjustments may involve revising parts of the strategy or Internal Environment: Factors within the organization that changing it entirely. are controllable by the organization itself. External Environment: Factors outside of the organization MODULE 8: and uncontrollable by the organization (e.g., government Strategic Point of View policies). Organizations lacking a vision-mission may lose focus and The purpose of environmental scanning is to identify key factors direction. critical to creating strategies. Tools such as SWOT Analysis Without clear goals, they may exhaust resources without (Strengths, Weaknesses, Opportunities, Threats) are used. achieving anything substantial. Strengths & Weaknesses: Internal factors.  A vision-mission statement acts as a guide for achieving Some organizations combine their mission and vision into organizational objectives, focusing actions toward achieving one statement, referred to as a mission-vision statement long-term goals. or a credo, summarizing their purpose and goals. Mission and Vision Statements Mission: ○ Defines what an organization does. ○ Explains the purpose and dictates involvement in specific activities. ○ Represents "who we are and what we do." Vision: ○ Represents what the organization sees itself achieving in the future. ○ Reflects "what we want to be." ○ Acts as the organization’s ultimate goal and provides direction. Creating a Good Mission Statement Components: 1. Customers: Who do you serve? What do they gain? 2. Products/Services: What do you offer? What’s unique? 3. Markets: Where do you operate (local/global)? 4. Technology: What tools deliver satisfaction? 5. Survival: How do you sustain commitment? 6. Philosophy: What core values guide you? 7. Self-Concept: Competitive edge that fulfills promises. 8. Public Image: Social/ethical responsibilities. 9. Employees: Treatment of workforce. Creating a Good Vision Statement Characteristics: 1. Future-Oriented: Reflects future aspirations. 2. Inspiring and Challenging: Motivates progress. 3. Customer-Product-Tech: Clear goals for growth. 4. Core Values: Aligns with organizational values. 5. Ambitious: Sets achievable yet challenging targets. 6. Competency: Highlights skills and competitive advantages. Examples