STRATEGIC
MANAGEMENT
344
NOTES & ESSAY TYPE
QUESTIONS/ANSWERS
(SUMMARIES)
, CHAPTER 1
THE STRATEGIC
MANAGEMENT PROCESS
INTRODUCTION
Strategy formulation and implementation are concerned with two approaches to
strategy. The prescriptive approach is rational and logical while the emergent
approach is creative, experiential and intuitive.
Strategic planning and formulation takes place within the organizations
strategic context and is supported by strategic decision-making, leadership and
risk management.
The strategic management process consists of four components; strategic
direction, strategic analysis, strategy development and formulation and, strategy
implementation.
COMPONENT 1: STRATEGIC
DIRECTION
Strategic management sets the strategic direction of the organization to
create an overarching organizational culture that focuses on integrating all
levels of the organization to achieve sustainable competitive advantage with
above-average returns.
Competitive advantage is a condition that is achieved by an organization
when it creates superior value for its customers compared to competitors
and/ or when it outperforms competitors in key areas such as profitability.
Sustainability implies that this condition can be achieved by an organization by:
creating value,
managing ethically and
being sustainable, corporate global citizens with social, economic and
environmental integrity through engagement with government, socio-
economic and environmental focus.
Strategic tools are used to communicate strategic direction and include
strategic intent, vision, mission and value statements, and balanced scorecards.
, CHAPTER 1
THE STRATEGIC
MANAGEMENT PROCESS
COMPONENT 1: STRATEGIC
DIRECTION
STRATEGIC INTENT
Strategic intent captures the essence of winning and setting out a 10–20-year
quest for global leadership.
It informs and shapes how an organization defines its business and where
they find unique strategic advantage.
Strategic intent provides a central point of departure for decision-making.
VISION STATEMENTS
Vision statements should contain some strategic stretch and indicates the core
ideology of an organization that defines its enduring character and consistent
image, highlighting its purpose, the fundamental reason for its existence, and
value.
The visionary process (creative), of setting out a vision, can be analytical,
intuitive or benchmark-based approaches:
The intuitive approach is based on structural introspection, the analytical
approach involves gathering information on the direction of an organization
The benchmark-based approach looks at competitors for standards.
MISSION STATEMENTS
Mission statements should contain the fundamental objectives of the
organization and includes what people should consider as the guiding principles
or philosophies.
These statements can change in the light of changing environmental conditions,
so they should be clearly defined to give strategic leaders the necessary
direction to develop strategies in line with changing trends/ conditions.
, CHAPTER 1
THE STRATEGIC
MANAGEMENT PROCESS
COMPONENT 1: STRATEGIC
DIRECTION
MISSION STATEMENTS
Categories of this mission statement include producer, partner and promoter
approaches:
Producer statements focus on the product an organization provides
Partner statements emphasize working with customers to provide mutually
beneficial experiences and solutions
Promoter statements suggest that the organization aims to improve the
quality of life.
VALUE STATEMENTS
Value statements build onto mission statements and reflect the basic
organizational beliefs, values, aspirations and philosophies.
BALANCED SCORECARDS
Balanced scorecards are used for guiding, controlling and challenging an
organization to realize a shared conception of the future.
It enables the organization to achieve an integrated, aligned and balanced focus
on four perspectives, financial, customer, growth and internal business
processes and learning, that collectively underpin the achievement of the
organization.
The four processes balanced scorecards use to capture an organizations ideal
business strategy are:
1. clarifying and translating vision into strategy
2. communicating and linking strategic objectives and measures
3. planning, setting targets
4. aligning strategic activities and enhancing strategic feedback and learning.
MANAGEMENT
344
NOTES & ESSAY TYPE
QUESTIONS/ANSWERS
(SUMMARIES)
, CHAPTER 1
THE STRATEGIC
MANAGEMENT PROCESS
INTRODUCTION
Strategy formulation and implementation are concerned with two approaches to
strategy. The prescriptive approach is rational and logical while the emergent
approach is creative, experiential and intuitive.
Strategic planning and formulation takes place within the organizations
strategic context and is supported by strategic decision-making, leadership and
risk management.
The strategic management process consists of four components; strategic
direction, strategic analysis, strategy development and formulation and, strategy
implementation.
COMPONENT 1: STRATEGIC
DIRECTION
Strategic management sets the strategic direction of the organization to
create an overarching organizational culture that focuses on integrating all
levels of the organization to achieve sustainable competitive advantage with
above-average returns.
Competitive advantage is a condition that is achieved by an organization
when it creates superior value for its customers compared to competitors
and/ or when it outperforms competitors in key areas such as profitability.
Sustainability implies that this condition can be achieved by an organization by:
creating value,
managing ethically and
being sustainable, corporate global citizens with social, economic and
environmental integrity through engagement with government, socio-
economic and environmental focus.
Strategic tools are used to communicate strategic direction and include
strategic intent, vision, mission and value statements, and balanced scorecards.
, CHAPTER 1
THE STRATEGIC
MANAGEMENT PROCESS
COMPONENT 1: STRATEGIC
DIRECTION
STRATEGIC INTENT
Strategic intent captures the essence of winning and setting out a 10–20-year
quest for global leadership.
It informs and shapes how an organization defines its business and where
they find unique strategic advantage.
Strategic intent provides a central point of departure for decision-making.
VISION STATEMENTS
Vision statements should contain some strategic stretch and indicates the core
ideology of an organization that defines its enduring character and consistent
image, highlighting its purpose, the fundamental reason for its existence, and
value.
The visionary process (creative), of setting out a vision, can be analytical,
intuitive or benchmark-based approaches:
The intuitive approach is based on structural introspection, the analytical
approach involves gathering information on the direction of an organization
The benchmark-based approach looks at competitors for standards.
MISSION STATEMENTS
Mission statements should contain the fundamental objectives of the
organization and includes what people should consider as the guiding principles
or philosophies.
These statements can change in the light of changing environmental conditions,
so they should be clearly defined to give strategic leaders the necessary
direction to develop strategies in line with changing trends/ conditions.
, CHAPTER 1
THE STRATEGIC
MANAGEMENT PROCESS
COMPONENT 1: STRATEGIC
DIRECTION
MISSION STATEMENTS
Categories of this mission statement include producer, partner and promoter
approaches:
Producer statements focus on the product an organization provides
Partner statements emphasize working with customers to provide mutually
beneficial experiences and solutions
Promoter statements suggest that the organization aims to improve the
quality of life.
VALUE STATEMENTS
Value statements build onto mission statements and reflect the basic
organizational beliefs, values, aspirations and philosophies.
BALANCED SCORECARDS
Balanced scorecards are used for guiding, controlling and challenging an
organization to realize a shared conception of the future.
It enables the organization to achieve an integrated, aligned and balanced focus
on four perspectives, financial, customer, growth and internal business
processes and learning, that collectively underpin the achievement of the
organization.
The four processes balanced scorecards use to capture an organizations ideal
business strategy are:
1. clarifying and translating vision into strategy
2. communicating and linking strategic objectives and measures
3. planning, setting targets
4. aligning strategic activities and enhancing strategic feedback and learning.
