STRATEGIC MANAGEMENT & BUSINESS POLICY
13TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
Strategic Management: a set of managerial
decisions and actions that determines the long-
run performance of a corporation.
Includes:
Internal and external environment scanning
Strategy formulation
Strategy implementation
Evaluation and control
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Phases of Strategic Management:
Phase 1: Basic financial planning
Phase 2: Forecast-based planning
Phase 3: Externally oriented strategic planning
Phase 4: Strategic management
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Benefits of Strategic Management:
Clearer sense of strategic vision for
the firm
Sharper focus on what is
strategically important
Improved understanding of a
rapidly changing environment
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Additional Benefits of Strategic Management
Improved Strategic thinking
organizational Organizational
performance learning
Achieves a match
between the
organizations
environment and its
strategy, structure
and processes
Important in unstable
environments
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Impact of Globalization:
Globalization: the integration and
internationalization of markets and corporations
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Impact of Environmental Sustainability:
Environmental Sustainability: the use of
business practices to reduce a companys impact
on the natural, physical environment
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Impact of Environmental Sustainability
Risks of Climate Change include:
Regulatory risk Litigation risk
Supply chain risk Reputational risk
Product and Physical risk
technology risk
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Population ecology: established organizations
are unable to adapt to change
Institution theory: organizations adapt by
imitating successful organizations
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Strategic choice perspective: organizations
adapt to change and have the ability to reshape
their environment
Organizational learning theory: organizations
adapt defensively and use knowledge to improve
their relationship with the environment
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Strategic flexibility: the ability to shift from one
dominant strategy to another and requires:
Long-term commitment to the
development and nurturing of critical
resources
Learning organization
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Learning organization: an organization skilled at
creating, acquiring, and transferring knowledge
and at modifying its behavior to reflect new
knowledge and insights
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Main activities of a learning organization
include:
Solving problems Learning from past
systematically experience, history and
experiences of others
Experimenting with
new approaches Transferring knowledge
quickly and easily
throughout the
organization
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Basic Elements of Strategic Management
1. Environmental scanning
2. Strategy formulation
3. Strategy implementation
4. Evaluation and control
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Basic Elements of Strategic Management
Environmental Scanning is the monitoring,
evaluating and disseminating of information
from the external and internal environments to
key people within the organization
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Basic Elements of Strategic Management
Strategy Formulation: the development of long-
range plans for the effective management of
environmental opportunities and threats in light of
organizational strengths and weaknesses (SWOT)
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Basic Elements of Strategic Management
Mission- the purpose or reason for the
organizations existence
Vision- describes what the organization would
like to become
Objectives- the end results of planned activity
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Basic Elements of Strategic Management
Strategies- form a comprehensive master
plan that states how the corporation will
achieve its mission and objectives
Corporate
Business
Functional
Policies- the broad guidelines for decision
making that links the formulation of a
strategy with its implementation
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Basic Elements of Strategic Management
Strategy implementation: the process by
which strategies and policies are put into
action through the development of:
Programs
Budgets
Procedures
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Basic Elements of Strategic Management
Evaluation and control: the process in which
corporate activities and performance results
are monitored so that actual performance can
be compared to desired performance
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Basic Elements of Strategic Management
Performance: the end result of organizational
activities
Feedback/Learning Process: revise or correct
decisions based on performance
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Triggering event: something that acts as a
stimulus for a change in strategy and can
include:
New CEO
External intervention
Threat of change of ownership
Performance gap
Strategic inflection point
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What Makes a Strategic Decision?
Strategic decision making focuses on the long-run
future of the organization
Characteristics of strategic decision making include:
Rare
Consequential
Directive
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Mintzbergs Modes of Strategic Decision
Making
Entrepreneurial
Adaptive
Planning
Logical incrementalism (Quinn)
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Strategic Decision Making Process:
1. Evaluate current 5. Analyze strategic
performance results (SWOT) factors
2. Review corporate 6. Generate, evaluate
governance and select the best
alternative strategy
3. Scan and assess the
7. Implement selected
external environment
strategies
4. Scan and assess the
8. Evaluate implemented
internal corporate strategies
environment
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Strategic audit provides a checklist of questions,
by area or issue, that enables a systematic
analysis to be made of various corporate functions
and activities
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1. Why has strategic management become so important
to todays corporations?
2. How does strategic management typically evolve
in a corporation?
3. What is a learning organization? Is this approach to
strategic management better than the more traditional
top-down approach in which strategic planning is prima
done by top management?
4. Why are strategic decisions different from other kinds
of decisions?
5. When is the planning mode of strategic decision makin
superior to the entrepreneurial and adaptive modes?
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PowerPoint created by:
Ronald Heimler
Dowling College- MBA
Georgetown University- BS Business
Administration
Adjunct Professor- LIM College, NY
Adjunct Professor- Long Island
University, NY
Lecturer- California State Polytechnic
University, Pomona, CA
President- Walter Heimler, Inc.
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without the prior written permission of the publisher. Printed in the
United States of America.
Copyright 2012 Pearson Education, Inc.
publishing as Prentice Hall
