strategic management 4th edition pdf

strategic management 4th edition pdf

Strategic Management: A Comprehensive Guide (4th Edition)

1. Introduction to Strategic Management

Modern management began during the industrial revolution in the late 18th century when large-scale organizations started to appear. The two significant reformers in management knowledge are F.W. Taylor and Henry Fayol, who developed their thoughts as a response to the challenges of doing business in contemporary times. They provided the conceptual infrastructure to enhance our understanding of managing organizations that are increasingly operating in an emerging internationalized and globalized sphere. They developed “the why” and “the how” perspective on management and provided guidelines that can be used as a basis. They encouraged better management by offering principles and descriptive knowledge as a response to the challenges of their times. The basic management ideas of Taylor and Fayol are still valid in terms of meeting a certain level of organizational challenge that continuously develops. The coordination and optimization of demands from the priorities of stakeholders are some of the main challenges of today’s philosophy of management.

Management is the fundamental component of any organized body. The term management is a combination of two Latin words, which are Manus and Agere, which represent ‘to act with hands’. It indicates the execution of a function effectively for the attainment of set objectives and planned results. The discipline is considered to be a complex process of organizing resources to perform a function by means of necessary actions. The organization of the history of management can be dated back to the Sumerian time. The Sumerians used the accounting method, which has become part of the business strategy today. Similarly, other disciplines like accounting and economics originated from the Sumerian time.

2. Strategic Analysis and Planning

Strategic management goes much beyond basic planning. The involvement of top management of the entire company in the process, the allocation of responsibility throughout the firm, and the continuous movement toward firm commitments and results distinguish it quite considerably from operational short-lived, low-level planning efforts. The strategic management process itself moves through situational assessment and analysis to consistent action. The heart of the process is a continuity of interaction and involvement of top management throughout: in evaluation of situations, alternatives, and all kinds of results; in formulating and scheduling decisions; in making decisions; in effectively instructing those who are going to implement decisions; and in expressing the firm’s commitments to chosen plans. Obviously, such a streamlined process employs useful devices and techniques continually to assure the consistency of action as well as to assist in decisions. There are many simple and useful diagnostics and methodologies that help top management to appraise what the company should do and to evaluate the assumptions on which these needs and opportunities are based. In essence, the strategic management concept should help direct top management developed from day-to-day firefighting managers to the exigencies of the environment by shifting their concern from immediate problems to long-term profit reform. This will be realized from continued effective interaction with the market, cuts, and outsells based on the effect of orchestrating the company’s system of activities and operation toward maximum overall firm success that satisfies owners’ desires and meets other firm stakeholder responsibilities to the larger environment.

The effectiveness of implementing decisions carries with it a conscious involvement with change and facing change. We feel that as we approach a new century, change is and will be both universal and rapid. Planning in an enterprise is a necessity. Hope and chance can be no part of the implementation calculation without some form of guide or plan. Planning cannot be communicated to other people, neither can a firm mobilize and manipulate resources to meet goals. As such, planning is an organized way of evaluating alternative courses of action.

Strategic management is a capstone term in business administration programs. Strategic management is an advanced part of the program that dispenses with the prior concentration on functional discipline. It expands the vision of thinking about managing within the firm to make decisions that affect what the firm does and how they can add value to a firm outside of the firm. It manages for performance and concerns itself with making profit and the economic consequences of firm decisions to its owners and significant stakeholders.

3. Implementation and Execution of Strategies

It is necessary to establish intermediate objectives and value standards for these objectives so that their accomplishment be a tendency toward attaining the strategic objectives. The objectives system is thus a helpful element in the company’s strategic management activity. The course of action means the role and the positions under which the personnel must accomplish their tasks and must contribute to the company’s main strategic objectives. The course of action means the efforts of the management of the organization and more exactly the methods, actions, and techniques which determine the implementation of the strategies. The strategy execution can be defined as “the mix of resources’ utilization in order to fulfill the company’s objectives”. The strategy execution can be achieved based on a part of the total resources the company has at its disposal.

The implementation of decision strategies is performed by executing various tasks, among which the most important is the utilization of resources (money, personnel, equipment) for implementing certain decisions. In order to realize a certain action, we need to have at our disposal special funds and we must understand to what extent these funds will contribute to attaining the objectives. For a manager, it is difficult to estimate the effectiveness of the utilization of resources and money. Executing a strategy means using the resources assigned to the company in the best possible way. This is done by having a number of courses of action at our disposal, which must be established so that the company reaches its objectives.

4. Evaluating and Adapting Strategies

Sustainability We will first examine how to measure long-term performance – a process vital to understanding whether strategic actions are translating into stakeholder value. We will then consider an important emerging consideration: the relationship between business strategy and the natural environment. The chapter will conclude with a discussion of the strategic management dynamic. Though we usually speak of developing long-run strategies, in truth, strategies are under virtual and constant tension from inside the organization – conflicts between different functional or managerial goals – and from outside of the organization – social, political, economic, and natural environment trends not anticipated or adequately handled. In the final analysis, the success of the strategic management process does not rest with its perfect execution but with the organization’s ability to recognize and manage its dynamic nature. No company can consider its strategic management successes to be permanent accomplishments because it operates in an environment that is in a constant state of dynamism.

Introduction In this chapter, we will consider the final phase of the strategic management process: how to measure and evaluate whether the organization is on the right path, how to determine what needs to be done to put the organization back on course, and how to implement the needed changes. Over the last three decades, organizations have made substantial progress in designing and implementing strategic management systems. Many organizations have undertaken the first three steps of the strategic management process particularly well – environmental scanning, strategy development, and strategy deployment. Some of these organizations have invested substantial resources, time, and political capital to have the strategic management process undergird the entire culture of their organizations. Yet in some of these organizations, there seems to be an inexplicable void between the promise and the performance of the strategy. This chapter will focus on how to close the performance gap.