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LECTURE 05

LECTURE 05. MGT686. REVIEW OF LECTURE 04. External Audit Chapter 3. Vision & Mission Chapter 2. Long-Term Objectives Chapter 5. Generate, Evaluate, Select Strategies Chapter 6. Implement Strategies: Mgmt Issues Chapter 7. Implement Strategies: Marketing, Fin/Acct,

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LECTURE 05

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  1. LECTURE 05 MGT686

  2. REVIEW OF LECTURE 04 External Audit Chapter 3 Vision & Mission Chapter 2 Long-Term Objectives Chapter 5 Generate, Evaluate, Select Strategies Chapter 6 Implement Strategies: Mgmt Issues Chapter 7 Implement Strategies: Marketing, Fin/Acct, R&D, CIS Chapter 8 Measure & Evaluate Performance Chapter 9 Internal Audit Chapter 4

  3. Strategic-Management Model Strategic-Management Process – • Dynamic and Continuous • More formal in larger organizations

  4. Strategic-Management Model • Identify Organization’s existing: • Vision • Mission • Objectives • Strategies

  5. Strategic-Management Model • Perform External Audit • Perform Internal Audit • Establish long-term objectives • Generate, evaluate, select strategies • Implement strategies • Measure and evaluate performance

  6. Benefits of Strategic Management • Proactive in shaping organization’s future • Initiate and influence activities • Formulate better strategies • Systematic, logical, rational approach

  7. Benefits of Strategic Management • Financial benefits • Improvement in sales • Improvement in profitability • Improvement in productivity

  8. Benefits of Strategic Management • Non-Financial benefits • Enhanced awareness of xternal threats • Improved understanding of competitors’ strategies • Increased employee productivity • Reduced resistance to change • Understanding of performance-reward relationships • Enhances problem-prevention capabilities

  9. Benefits of Strategic Management • Identification of opportunities • Objective view of management problems • Improved coordination and control • Minimizes adverse conditions and changes • Decisions to better support objectives • Effective allocation of time and resources • Internal communication among personnel

  10. Benefits of Strategic Management • Integration of individual behaviors • Clarifies individual responsibilities • Encourages forward thinking • Encourages favorable attitude toward change • Discipline and formality to the management of the business

  11. Why Some Firms Do No Strategic Planning • Poor reward structures • Waste of time • Too expensive • Laziness • Content with success

  12. Why Some Firms Do No Strategic Planning (Cont’d) • Fear of failure • Overconfidence • Prior bad experience • Self-interest • Fear of the unknown • Suspicion

  13. Business Ethics and Strategic Management Business ethics defined: • Principles of conduct within organizations that guide decision making and behavior.

  14. Business Ethics and Strategic Management Good business ethics: • prerequisite for good strategic management

  15. Business Ethics and Strategic Management Code of business ethics: • Provides basis on which policies can be devised to guide daily behavior and decisions at the workplace

  16. Business Ethics & Strategic Planning Business actions always unethical include: • Misleading advertising • Misleading labeling • Environmental harm • Poor product or service safety • Insider trading • Dumping flawed products on foreign markets

  17. Nature of Global Competition Companies conduct business across borders • International or multinational corporations • Parent company • Host country • Strategy implementation more difficult • Cultural differences • Norms, values, work ethics

  18. Advantages of International Operations • Absorb excess capacity • Reduce unit costs • Spread economic risks over wider markets • Low-cost production facilities • Competition may be less intense • Reduced tariffs, lower taxes • Economies of scale

  19. Disadvantages of International Operations • Different social, cultural demographic, legal forces may create difficult communication • Weaknesses of foreign competition may be underestimated • Barriers to communication and effective management of personnel • Complications from different monetary systems

  20. THANK YOU

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