Aims of Strategic Management Course Understand the concepts of Strategy, Strategic Management and other basic vocabulary of strategy; Identify the characteristics of strategic decisions; Identify the various levels of strategic decision making; Understand the various elements of the Strategic Management process. Understand different approaches to strategy www.ePowerPoint.com

Aims of Strategic Management What is Strategy? www.epowerpoint.com www.ePowerPoint.com

Understanding the Origin “Strategos” The main task of the general – to lead, to direct, to show the way to the army. www.ePowerPoint.com

Understanding the Origin “The Art of War” - the oldest military manual written approximately 400-320 b.C. by an ancient Chinese general, Sun Tzu. “Sun Tzu and the Art of Business” (Mark McNeilly). “Sun Tzu: War and Management” (Hou, W., Sheang, L. And Hidajat, B.) “Sun Tzu: the Art of War for Managers: 50 Strategic Rules” (Gerald Michaelson). “The Art of Strategy: A New Translation of Sun Tzu’s ‘The Art of War’” (Wing). www.ePowerPoint.com

Sun Tzu’s Military Strategy and Management “An army shouldn’t go to war, unless it is certain that it has an advantage over the enemy.” Lesson: Management should not only know their own internal capability but also the resources and competences of their competitors. “A territory must be conquered as quickly as possible, and unnecessary blood shed should be avoided.” Lesson: Management should avoid unnecessary waste of time and resources. www.ePowerPoint.com

Military Strategy and a Business Strategy Objective To conquer and control markets To conquer and control territories Analysis Of the macro environment Of the industry (microenvironment) Resources and competences Organisational structure Control and co-ordination Of the environmental conditions Enemy’s strengthens and weaknesses Own capabilities and limitations Command structure Leadership and co-ordination Results Strategic plan Plan of campaign www.ePowerPoint.com

Levels of Strategy Corporate Level Business Unit Level (Strategic Business Unit) Operational Strategies www.ePowerPoint.com

Levels of Strategy Strategy and Tactics – War and batles Without winning the battles we cannot win the war, but without determining first which victories are really critical to succeed, we cannot determine which battles are really necessary. www.ePowerPoint.com

Definition of Strategy “Strategy is the direction and scope of an organisation over the long term: which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.” (Johnson and Scholes, 2005:9). www.ePowerPoint.com

Another definition (cont.) “The strategy of the firm is the match between its internal capabilities and its external relationships. It describes how it responds to its suppliers, its customers, its competitors and the social and economic environment within which it operates.” Strategy is basically the way www.ePowerPoint.com

The 5 P’s of Strategy Henry Mintzberg, 1987 PLAN: Consciously intended course of action PATTERN: Consistency in behavior POSITION: Where in its environment? PERSPECTIVE: Ingrained way of perceiving the world PLOY: www.ePowerPoint.com

The Strategic Management Process www.ePowerPoint.com

But Management isn’t Strategic Management Managerial Functions Henri Fayol 1841 - 1925 To PLAN To ORGANISE To COORDINATE To COMMAND To CONTROL But Management isn’t Strategic Management www.ePowerPoint.com

What is Strategic Management? “Strategic Management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organisation to achieve its objectives” David (2003: 5).   “Strategic Management is a process of formulating, implementing, and evaluating cross-functional decisions that enable the organisation to define and achieve its mission, and ultimately to create value” Porth (2003: 2). www.ePowerPoint.com

The Strategic Management Process www.ePowerPoint.com

Prescriptive Strategy vs. Emergent Strategy “Is one whose objective has been defined in advance and whose main elements have been developed before the strategy commences.” Emergent Strategy “Is a strategy whose final objective is unclear and whose elements are developed during the course of its life, as a strategy proceeds.” (Lynch, 2006:16) www.ePowerPoint.com

The Strategy Lenses Strategy - deliberate or emergent ? Intended strategy Centrally controlled or loosely coupled ? deliberate Unrealized strategy Realized strategy Emergent strategy www.ePowerPoint.com

Strategic Management in Different Contexts Small business context The multinational corporation Manufacturing and services organisations Strategy in the public sector The voluntary and not-for-profit sectors www.ePowerPoint.com

References Johnson, G. Scholes, K. and Whittington, R. (2005). Exploring Corporate Strategy. 7th Edition. Harlow: Financial Times Prentice Hall. Lynch, R. (2006). Corporate Strategy. 4th Edition. Harlow: Financial Times Prentice Hall. Porth, S. (2003). Strategic Management: A Cross Functional Approach. New Jersey: Prentice Hall. Stonehouse, G., Hamill, J., Campbell, D. and Purdie, T. (2000). Global and transnational Business: Strategy and Management. Chichester: John Wiley and Sons Ltd. www.ePowerPoint.com

Lynch, R. (2006) “Corporate Strategy”. 4th Edition Johnson, G. and Scholes, K. (2005) “Exploring Corporate Strategy”. 7th Edition Lynch, R. (2006) “Corporate Strategy”. 4th Edition www.ePowerPoint.com