CHAPTER 1: A STRATEGIC MANAGEMENT MODEL

The Reality of Dynamism

The Reality of Dynamism

• The 21st century epitomizes the “reality of dynamism.”

• Today’s millieu is in state of fluidity. It is not static. Rather, changes and fluctuations
are constantly happening in the surroundings. These actualities are characterized by
the occurrence of phenomenal situations, continuous challenges, and triggering forces
that provoke corresponding reactions.
• The certainty of change is universal and this foregone conclusion is largely
experience by all nations and peoples (wether developed or not developed, large or
small, powerful or weak).

• As a result, the current landscape of competition is highly threatening and daunting.

Competition has gone beyond nations, peoples, cultures, geographic frontiers, and
industries. As the global economy expands, blurring boundaries, any business needs
to create its own impact in any part of the world. Thus, it is urgent for organizations
and businesses to strategize.
HYPERCOMPETITION

• HYPERCOMPETITION is a fundamental feature of the new economy.

• HYPERCOMPETITION occurs when product/service offerings and technologies are
so new that standards become unstable and competitive advantage is not sustainable. It
is a condition where strategic maneuverings have escalated to bigger business
exposure, more sophisticated marketing positioning, aggressive selling, and innovative
products and services.

• HYPERCOMPETITION is a situation where both globalization and technology

collaborate to create a heightened cut-throat situation.
• In short, the name of the game today
is tougher and smarter, quantitative
and qualitative organizational
changes, and sustainable competitive
advantage. In this hyper competitive
environment, only the most adaptive
and nimble organizations will survive.
Thus, there is need to STRATEGIZE.
STRATEGIC MANAGEMENT DEFINED

• A continuous process of strategy creation. It involves strategic processes like strategic

analysis and decision-making, strategy formulation and implementation, and
strategy control with the primary objectives of achieving and maintaining better
alignment of corporate policies, priorities and success.
DIFFERENT PROCESS OF STRATEGIC MANAGEMENT
• 1. Strategic analysis
• 2. Strategic decision-making
• 3. Strategy formulation
• 4. Strategy implementation
• 5. Strategic control
• Strategic analysis consists of a systematic evaluation of variables currently existing in
the external and internal environments while strategic decision-making is
deliberately bringing together the right resources for the right markets at the right time.

• Strategy formulation is designing strategies on the business and corporate levels.

• Strategy implementation is employing these crafted strategies to achieve
organizational set goals and objectives.

• Strategic control is the application of an appropriate monitoring and feedback system.

Strategic Management Process

Defined as the science of CREATING,

EXECUTING, and EVALUATING CROSS
FUNCTIONAL DECISIONS to enable an
organization to achieve it goals and objectives,
the components of the strategic management
process have to be effective.
STRATEGIC ANALYSIS STRATEGIC INTELLIGENCE
Strategic Intelligence

If strategic analysis is accurately conducted, organization

can develop strategic intelligence

• STRATEGIC INTELLIGENCE is the capability of an organization to possess relevant and

related knowledge, abilities, foresight, and systems thinking, such that it is able to assess its one
strengths and vulnerabilities, the pressing challenges confronting the organization, as well as the
trends and opportunities existing in the environment.
STRATEGIC DECISION-MAKING STRATEGIC THINKING
Strategic Thinking

• If strategic decision-making is correctly effected, organizations can acquire the

capability of thinking strategically.

• STRATEGIC THINKING is the cognitive process of competently and analytically

weighing factors and arriving at critical decisions in the context of the current millieu
of which an organization is part.
STRATEGY FORMULATION ORGANIZATIONAL COMPETITIVENESS
Organizational Competitiveness

• If strategy formulation is uniquely designed and effectively communicated,

organizations have greater possibilities of attaining organizational competitiveness.

• ORGANIZATIONAL COMPETITIVENESS pertains to the ability of any

business/company to utilize its resources optimally and sustainability for maximum
performance and productivity.
Comparative Advantage

• If strategy implementation is efficiently employed, organizations can achieve

comparative advantage.

• COMPARATIVE ADVANTAGE refers to the ability of an organization to produce a

particular good or service at lower marginal cost and opportunity costs than its
competitors.
STRATEGIC PERFORMANCE
Strategic Performance

• If strategic control is productively monitored, organizations can realize strategic

performance.

• STRATEGIC PERFORMANCE is the accomplishment of a high level of

productivity that is characterized by efficiency of lean and quantifiable management.
STRATEGIC MANAGEMENT MODEL

ORGANIZATIONAL VARIABLES
STRATEGIC PLANNING

• STRATEGIC PLANNING - is a continuous, repetitive, and competitive process of

setting the goals and objectives that an organization aims to attain, defining the means
to achieve them, and asserting the best way to realize them in the content of the
prevailing environment while measuring performance through set standards, and
periodically but continuously conducting reassessment.
STRATEGIC PLANNING PROPERTIES

• It generates the blueprint of what the organization intends to accomplish.

• It formalizes all plans with respect to type and extent.
• It is the process of developing a strategic fit between the organization’s goals and
capabilities in the context of changing opportunities.

• It is proactive.
• It is a process that involves carefully delineated steps.
• It is a philosophy because it evolves a dynamic way of conducting and managing an
organization.
STRATEGIC PLANNING PROPERTIES

• It links the organizational plan with functional and operational plans. Strategic
planning speaks of two types of planning: (a) the organizational grand plan, and (b) the
departmental tactical plans.

• It is intricately interwoven within the defined managerial functions of organizing,

directing, staffing, and controlling.

• It necessitates the leadership and support of top management, and, at the same time,
employee, participation, and commitment.
TWO PRINCIPAL TYPES OF STRATEGIC PLANS

• Medium/long-range plan - prepared in the context of the coming three to five, ten, or
more years. It describes the major factors or forces that affect the organization’s long-
term objectives, strategies, and resourced required.

• Annually/yearly plan- short term: succinctly describes the organization’s present

situation, its goals and objectives, strategies, and resources required.
STEPS IN STRATEGIC PLANNING

• The steps involved in strategic planning are iterative, cyclic, and integrative. They include:
• 1. Making a situation audit to ascertain where the organization is today;
• 2. Stating the respective goals and objectives of the organization, the values and value
systems its espouses, its business definition,, and its corresponding strategy statements to
determine where it wants to go;

• 3. Delineating appropriate strategies to be carried out in order to help direct the organization
to where it wants to be;
• 4. Identifying and then choosing the soundest strategy to determine the best way for
the organization to be where it wants to be and to achieve its goals;

• 5. Monitoring the implementation of strategies to measure performances; and

• 6. Conducting periodic and continuous reassessments in order to implement
improvements and suggested changes.
Need for Strategic Planning
Strengths and Limitations of Strategic Planning

• Strategic planning defines an organization’s vision, mission, and set objectives. It

provides organizations the opportunity to assess the millieu and specify strategies to
achieve their goals.
Strengths of Strategic Planning

• Helps organizations to stay focused.

• It makes things happen.
• Helps reduce the chances of committing mistakes .
• Helps in the more efficient allocation of organizational resources.
• Provides leverage and competitive advantage to organization.
Limitations of Strategic Planning

• The strategic plans prepared in some instances are good only “in paper”.
• Some organizations fail to follow faithfully their prepared strategic plans.
• Some organizations may not be flexible enough to make needed adjustments and
alignments due to inevitable or forthcoming external or internal challenges.

• Conducting strategic sessions may entail costs that can be expensive to organizations.
ORGANIZATIONAL VISION

• It is an inspirational statement of what the organization hopes to achieve at some point

in the future.

• It is the image of what an organization desires to achieve.

• It is short and succinct, but it carries an extraordinary force that will stir, motivate, and
inspire employees to work and refocus toward its desired optimal future state.
MISSION STATEMENT

• Mission statement/mission defines the current purpose of an organization; it answers

what the organization does, for whom it is done, and how it does what it does.

• It gives employees a better perspective on how their tasks contribute to the attainment
of organizational goals.

• Mission statements are expected to change in the context of shifting economic realities
or unexpected circumstances like challenges, threats, and even opportunities.
• LCC VISION/MISSION
ORGANIZATIONAL GOALS AND
OBJECTIVES
GOALS

• To operationalize the mission statement, organizational goals and objectives are defined.
These are referred to as organizational goals.

• Organizational goals are purchase to make the specified strategies succeed and are
essentially dependent on their respective purpose and direction.

• Goals are macro, encompassing in perspective and prospective in nature.

• Goals represent the overall vision of an organization.
Properties of Goals

• 1. Goals provide organization’s focus and direction.

• 2. Goals move organization to action.
• 3. Goals develop in organizations the trait of persistence.
OBJECTIVES

• Objectives are different from goals, in that they are micro and specific in
perspective. They should possess the following characteristics:

• 1. Objectives need to be clearly defined and formulated, carefully chosen, specific, and
definite.

• 2. Objectives may be immediate or short-term.

• Objectives need to be realistic and attainable, flexible consistent, and strategic.
• Objectives need to be measurable over time.
Relationship between Organizational Goal and Objectives

According to Peter Drucker

(2008), objectives fall into eight
(8) major classifications.
Eight (8) Major Classifications of Objectives

• 1. Market standing (e.g, desired share of the current and new markets);
• 2.Innovation (e.g, development of new goods, services, and of skills and methods
required to supply them);

• 3.Human Resources (e.g, selection and development of employees);

• 4. Financial resources (e.g, identification of sources of capital and their uses);
• 5. Physical resources (e.g, identification of sources of capital and their uses);
• 6. Productivity (e.g, efficient use of the resources relative to output);
• 7. Social responsibility (e.g, awareness and responsiveness to the effects on the
community of the stakeholders); and

• 8. Profit requirements (e.g, achievement of measurable financial and well-being and

growth).
Values and Value System
VALUES
• VALUES are inherent roots of motivation within an individual, an organization, a
community, or a nation.

• Values are generally exhibited in two different ways, namely, BELIEFS and
ATTITUDES.

• BELIEFS are cognitive manifestation

• ATTITUDES are characteristically behavioral.
VALUE SYSTEM

• It is characteristically broader in scope; aside from values, it includes other variables

such as the organization’s dreams, aspirations, expectations, philosophies, as well as
leadership and management styles and ethical practices.

• It also indicates the hierarchy of values ranked by organizations

ORGANIZATIONAL CLIMATE AND CULTURE
ORGANIZATIONAL
CLIMATE
ORGANIZATIONAL CLIMATE

• It is defined as the regular and repetitive patterns of attitudes and behavor exhibited by
the employees of an organization.

• It is a measure of the health of an organization.

• It’s manifests wether the employees are happy, hard working, and motivated.
• It is easier to assess and change. It lends to flexibility. It precedes and somehow
contributes to the solidification of the culture of an organization.
ORGANIZATIONAL CULTURE

• Organizational culture denotes a wide range of social phenomena, including an

organization’s customary dress, language, behavior, beliefs, values, symbols of status
and authority, myths, ceremonies and rituals, and models of deference and subversion
(Scott et al. 2003)
THANK YOU!!!