StraMan Reviewer.pdf

🍒StraMan Reviewer🍒 🌷🌷🌷 Lesson 1 🌷🌷🌷 Strategic management is the process by which top executives in an organization make decisions and allocate resources to achieve the company's long-term goals. "Why do some firms outperform others?” is an art and science that involves...

🍒StraMan Reviewer🍒 🌷🌷🌷 Lesson 1 🌷🌷🌷 Strategic management is the process by which top executives in an organization make decisions and allocate resources to achieve the company's long-term goals. "Why do some firms outperform others?” is an art and science that involves formal tools, creativity, and long-term goals to guide a company towards success, often revised based on business environment changes. Different types of strategies that organizations may follow: 🍭🪅1.1 Intended Strategy🍭🪅 is the plan that an organization hopes to execute. It's often outlined in strategic or business plans and reflects the deliberate actions that a company intends to take to achieve its goals. example: FedEx's Hub-and-Spoke Model: When Frederick Smith, the founder of FedEx, was a student at Yale, he proposed a business model where packages would be routed through a central hub to maximize efficiency. This plan became the foundation of FedEx's operations and was a classic example of an intended strategy. The strategy was implemented successfully, leading to FedEx becoming a leading global courier service. 🍭🪅1.2 Emergent Strategy🍭🪅 is an unplanned strategy that arises in response to unexpected opportunities or challenges. These strategies are not initially part of the company’s original plan but evolve as a reaction to changes in the environment. example: Southern Bloomer Manufacturing's Gun Cleaning Patches: Southern Bloomer Manufacturing initially produced durable underwear for prisoners and mental hospital patients. However, they found themselves with a lot of scrap fabric, which was expensive to dispose of. When one of the founders visited a gun shop, he realized that the scrap fabric could be used to make high-quality gun cleaning patches. This emergent strategy led to a new product line that became very successful, transforming the company's operations. 🍭🪅1.3 Realized Strategy🍭🪅 is the strategy that an organization actually follows. It is often a combination of both the intended strategy and the emergent strategies that develop over time. example: Avon Products: David McConnell originally intended to be a successful book salesman, and to boost sales, he offered perfume samples as a gimmick. However, the perfumes became more popular than the books, leading McConnell to abandon his initial plan. This emergent strategy led to the creation of the California Perfume Company, which later became Avon. The realized strategy for Avon was selling beauty products rather than books, which was far more successful. The History of Strategic Management can be traced back thousands of years, with early examples found in ancient texts like the Bible and Sun Tzu's "The Art of War." Strategic management concepts were initially developed in the context of military strategy, and  academic discipline by the creation of business school courses and academic journals dedicated to the study of strategy. With key contributions from figures like Frederick W. Taylor and Henry Ford. Contemporary Critique of Strategic Management Some critics argue that the strategic management process is too costly, time-consuming, and complex, making it difficult for organizations to effectively implement. Others suggest that the focus on creating long-term strategies may limit a firm's ability to adapt to rapidly changing environments. Additionally, some scholars have raised concerns about the ethical implications of certain strategic management practices, as well as the potential for reinforcing existing power structures and inequalities within organizations. Understanding the Strategic Management Process The strategic management process involves several key steps, including analyzing the external, competitive, and internal environments; developing strategies based on this analysis; and implementing these strategies to achieve organizational goals. The process should be conducted within a framework of corporate ethics and values, ensuring that organizations do not cross ethical boundaries in their pursuit of success. Conclusion The Value of Strategic Management Framework for Success: navigate complex and competitive environments, offers a structured approach to achieving long-term goals, ensuring that an organization’s efforts are aligned with its broader vision. Not a Perfect Process: there is no guarantee that it will always lead to success. The dynamic and unpredictable nature of the business environment means that even the best-laid plans can sometimes go awry. Strategic Management as a Continuous Process Ongoing Adaptation: continuous process that requires ongoing assessment and adaptation. As external and internal conditions change, organizations must be ready to revise their strategies to stay competitive. This adaptability is crucial in a world where markets, technologies, and consumer preferences can shift rapidly. Learning and Improvement: The process of strategic management also involves learning from past experiences and outcomes. Organizations can refine their strategies over time by analyzing what has worked and what hasn’t, making strategic management an evolving practice rather than a static one. Ethical Considerations Ethics in Strategy: adherence to corporate ethics and values. Ethical considerations ensure that the pursuit of success does not come at the expense of integrity or social responsibility. Long-Term Integrity: By maintaining ethical standards, organizations not only protect their reputation but also build long-term trust with stakeholders, including customers, employees, and investors. This trust can be a significant competitive advantage in itself. Strategic Management in Practice Application Across Contexts: The conclusion reiterates that the strategic management process is applicable across various types of organizations, industries, and contexts. Can guide its decision-making and strategic direction. Student Preparation: is essential for their future roles in business. 🌷🌷🌷Lesson 2🌷🌷🌷(Assessing Organizational Performance) Strategic management is foundational for organizations, aiming to answer three key questions: 1. Where are we? 2. Where are we going? 3. How are we going to get there? First question “where are we?” by assessing their organization. Often this is by looking at financial data, reviewing historical trends, and comparing the financial performance to other benchmarks such as industry averages or competitors’ performance. But financial indicators are not the only assessment measures to determine where a company is in relation to the marketplace. Other organizational performance indicators are also reviewed, such as quality measures, productivity measures, human resource indicators such as staff satisfaction and retention rates, and customer satisfaction and retention. A multitude of different measures from different perspectives allow a firm to determine how it is doing. Organizational leadership provides the answer to the second question; “where are we going?” In collaboration with other stakeholders, leadership sets the vision for the firm. The vision is what the organization aspires to be, that big goal it wants to accomplish. The vision is developed within the organization’s mission: its purpose for being. The vision must also be aligned with the organization’s core values: the principles that are important as it carries out its mission and vision. The third question, “how are we going to get there”, speaks to the heart of strategic management. An organization develops strategies to work toward achieving its vision. These are developed after much assessment is performed to determine the best road map to advance the organization in the marketplace Vision, Mission, and Goals: Vision: The aspirational future state of the organization, answering the question "Where are we going?" (Refer to Table 2.1). Mission: The organization's purpose, defining "Why do we exist?". (Refer to Table 2.2) Goals: Specific, measurable, attainable, realistic, and time-bound objectives (SMART goals) that help in achieving the vision and mission. It’s crucial for organizations to ensure that their vision, mission, and goals are aligned with their core values and that they provide clear direction to employees. Assessing Organizational Performance: Complexity of Performance Assessment: - Organizational performance encompasses how well a company meets its vision, mission, and goals. However, performance assessment is complex due to various influencing factors such as market conditions and internal operations (Strategic-Management). Performance Measures and Benchmarks: - Performance Measures: Metrics used to gauge progress, including profits, stock prices, and sales figures. - Performance Benchmarks: Comparisons against industry standards or historical performance to determine organizational standing. Balanced Scorecard: - To organize performance measures, Professor Robert Kaplan and Professor David Norton of Harvard University developed a tool called the balanced scorecard. Using the scorecard helps managers resist the temptation to fixate on financial measures and instead monitor a diverse set of important measures. A tool developed by Robert Kaplan and David Norton that helps organizations monitor performance across four perspectives: 1. Financial Measures: Profitability and financial health. 2. Customer Measures: Customer satisfaction and retention. 3. Internal Business Process Measures: Efficiency of internal operations. 4. Learning and Growth Measures: Focus on innovation and employee development. The Triple Bottom Line: Emphasizes measuring organizational performance in terms of three dimensions: 1. People: Social responsibility and community impact. 2. Planet: Environmental sustainability. 3. Profits: Economic success. Competitive Advantage: Defined as a firm's ability to create more economic value than its competitors. Economic value is the difference between what customers are willing to pay and the cost incurred to produce a product. Competitive advantage provides a more stable measure of a firm’s success compared to volatile metrics like stock prices. Conclusion: Strategic management is a process that requires organizations to have clear visions, missions, values, and goals. Tools like the Balanced Scorecard and concepts like the Triple Bottom Line aid in assessing performance comprehensively. Achieving and maintaining competitive advantage is critical for long-term success.