Overview of Strategic Management

1. Comparing Business and Military Strategy

1.1. Business strategy is formulated, implemented, and evaluated with an assumption of competition. Military strategy is based on an assumption of conflict.

1.2. Both business and military organizations must adapt to change and constantly improve to be successful

2. Why Some Firms Do No Strategic Planning

2.1. Lack of knowledge in strategic planning

2.2. Poor reward structures

2.3. Firefighting

2.4. Waste of time

2.5. Too expensive

2.6. Laziness

2.7. Content with success

2.8. Fear of failure

2.9. Overconfidence

2.10. Prior bad experience

2.11. Self-interest

2.12. Fear of the unknown

2.13. Honest difference of opinion

2.14. Suspicion

3. Pitfalls in Strategic Planning

3.1. Using strategic planning to gain control over decisions and resources

3.2. Doing strategic planning only to satisfy accreditation or regulatory requirements

3.3. Too hastily moving from mission development to strategy formulation

3.4. Failing to communicate the plan to employees, who continue working in the dark

3.5. Top managers making many intuitive decisions that conflict with the formal plan

4. Guidelines for Effective Strategic Management

4.1. It should be a people process more than a paper process.

4.2. It should be a learning process for all managers and employees.

4.3. It should be words supported by numbers rather than numbers supported by words.

4.4. It should be simple and non-routine.

4.5. It should vary assignments, team memberships, meeting formats and even the planning calendar.

4.6. It should challenge the assumptions underlying the current corporate strategy.

4.7. It should welcome bad news.

5. Strategic management is the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

6. Stages of Strategic Management

6.1. Strategy formulation

6.2. Strategy implementation

6.3. Strategy evaluation

7. Key Terms in Strategic Management

7.1. Competitive advantage

7.2. Strategists

7.3. Vision statement

7.4. Mission statements

7.5. External opportunities and external threats

7.6. Internal strengths and internal weaknesses

7.7. Objectives

7.8. Strategies

7.9. Annual objectives

7.10. Policies

8. Benefits of Strategic Management

8.1. to help organizations formulate better strategies

8.2. Communication is a key to successful strategic management

8.3. Managers and employees become committed to supporting the organization

9. Financial Benefits

9.1. To show significant improvement in sales, profitability, and productivity

9.2. High-performing firms seem to make more informed decisions

10. Nonfinancial Benefits

10.1. It allows for identification, prioritization, and exploitation of opportunities.

10.2. It provides an objective view of management problems.

10.3. It represents a framework for improved coordination and control of activities.

10.4. It minimizes the effects of adverse conditions and changes.

10.5. It allows major decisions to better support established objectives.

10.6. It allows more effective allocation of time and resources to identified opportunities.