Chapter One
Scope of Strategic Management

1

Major Issues to Consider
Global considerations impact virtually all strategic decisions. E-commerce has become a vital strategic management tool. The natural environment has become an important strategic issue.

2

Strategic Management Defined

Art and science of formulating, implementing, and evaluating crossfunctional decisions that enable an organization to achieve its objectives.

3

Terminology
“Strategic Management” Synonymous with “Strategic Planning”
•

Strategic management
Used more often in academia

•

Strategic planning
Used more often in the business world

4

Terminology
Strategic management
Refers to:
Strategy formulation Strategy implementation Strategy evaluation

Strategic planning
Refers to:
Strategy formulation

5

Brief History
1950s
Term strategic planning originates

1960s – 1970s Strategic planning very popular
Widely viewed as panacea for problems

6

Brief History
1980s
Strategic planning cast aside
Planning models did not yield higher returns

1990s–2000
Revival of strategic planning
Widely practiced in business world

7

Strategic-Management Process Three Stages
Strategy Formulation Strategy Implementation Strategy Evaluation
8

Strategy Formulation
Vision & Mission Opportunities & Threats Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection
9

Strategy Implementation

Annual Objectives

Policies

Motivate Employees

Resource Allocation
10

Strategy Evaluation

Review External & Internal

Measure Performance

Corrective Action

11

Key Strategic Management Terms (Cont’d)
1. 2. 3. 4. 5. 6. 7. 8. 9. Strategists Vision statements Mission statements External opportunities and threats Internal strengths and weaknesses Long-term objectives Strategies Annual objectives