MO001/0/2019
MO001/0/2019
Strategic Management
MNG4801
Year Module
Department of Business Management
IMPORTANT INFORMATION:
This tutorial letter contains important information about your module (study guide)
Note: This is an online module, and therefore your module is available on myUnisa.
However, in order to support you in your learning process, you will also receive some study
materials in printed.format.
, MO001/0/2019
© 2016 University of South Africa
All rights reserved
Printed and published by the
University of South Africa
Muckleneuk, Pretoria
MO001/0/2016
60165944
,Table of contents
ORIENTATION ....................................................................................................................... iv
TOPIC 1: Development of strategic management as a management approach ......................1
Study unit 1.1 Development of strategic management as a management
approach ..........................................................................................2
Study unit 1.2 Importance of strategic management .............................................15
Study unit 1.3 Strategic management terminology ................................................35
Study unit 1.4 Contemporary business environment .............................................43
TOPIC 2: Building blocks of strategic planning ......................................................................64
Study unit 2.1 Strategic direction ...........................................................................65
Study unit 2.2 Internal environmental analysis ......................................................88
Study unit 2.3 External environmental analysis .....................................................99
Study unit 2.4 Strategy selection .........................................................................119
TOPIC 3: The building blocks of strategy implementation ...................................................140
Study unit 3.1 Strategy implementation ...............................................................141
Study unit 3.2 Short-term objectives, functional tactics and policies ...................147
Study unit 3.3 Leadership ....................................................................................151
Study unit 3.4 Organisational culture...................................................................164
Study unit 3.5 Reward systems ...........................................................................178
Study unit 3.6 Resource allocation ......................................................................188
Study unit 3.7 Organisational architecture, systems and processes ...................194
TOPIC 4: Building blocks of strategic control .......................................................................204
Study unit 4.1 Strategic control methodologies and approaches ........................205
TOPIC 5: Developing a strategic management plan ............................................................212
Study unit 5.1 Developing a strategic management plan ....................................213
BIBLIOGRAPHY .................................................................................................................. 230
ANNEXURE A ...................................................................................................................... 235
ANNEXURE B ...................................................................................................................... 243
MO001/0/2019 iii
, ORIENTATION
Dear Student
Welcome to the exciting world of strategic management! MNG4801 performs the
function of a capstone subject in that it forms the culmination of the concepts you
learnt in your undergraduate studies in strategic and business management. It is a
great pleasure to introduce you to this stimulating and dynamic field of study.
MNG4801 is offered as an online module supported with printed copies of all material.
This will allow you to read the study material even if you are not online. To ensure
that you share our enthusiasm for this field of study, we urge you to read this
orientation in detail. You may find that you need to refer to it as you progress through
the learning guide since it will definitely make studying this subject a lot easier.
Strategic management is about selecting effective strategies that balance the
organisation’s resources and capabilities, values and goals with its external
environment. In doing so, strategic managers are responsible for establishing a clear
strategic direction for the organisation, ensuring that the organisation reaches its
goals through the creation of a strong competitive position and the implementation of
strategy in such a way that the organisational architecture and activities are
synergistically integrated to achieve effective performance.
The learning content and activities in this guide, as well as your assignments, have
been developed in such a way that they will provide you with opportunities to delve
into the building blocks of strategic management and the role that strategic
management plays in the contemporary business environment. You will also have an
opportunity to gain knowledge of and insight into the analysis and development of
strategic plans.
PURPOSE OF THIS LEARNING GUIDE
The purpose of this learning guide is to introduce you to strategic management and
its development as a management approach. This guide will provide insight into the
building blocks of strategic management and the interrelatedness of these building
blocks. You will also have the opportunity to evaluate and develop a strategic plan.
LINK TO OTHER COURSES/MODULES
This module does not stand alone; it forms an integral part of the business
management field of study and, more specifically, your postgraduate management
studies. It builds directly on the strategic management and business management
concepts that you learnt in your undergraduate studies. If it has been some time since
you completed your undergraduate degree, we strongly recommend that you first
work through your undergraduate textbook to provide you with an introductory
overview of strategic management.
iv
MO001/0/2019
Strategic Management
MNG4801
Year Module
Department of Business Management
IMPORTANT INFORMATION:
This tutorial letter contains important information about your module (study guide)
Note: This is an online module, and therefore your module is available on myUnisa.
However, in order to support you in your learning process, you will also receive some study
materials in printed.format.
, MO001/0/2019
© 2016 University of South Africa
All rights reserved
Printed and published by the
University of South Africa
Muckleneuk, Pretoria
MO001/0/2016
60165944
,Table of contents
ORIENTATION ....................................................................................................................... iv
TOPIC 1: Development of strategic management as a management approach ......................1
Study unit 1.1 Development of strategic management as a management
approach ..........................................................................................2
Study unit 1.2 Importance of strategic management .............................................15
Study unit 1.3 Strategic management terminology ................................................35
Study unit 1.4 Contemporary business environment .............................................43
TOPIC 2: Building blocks of strategic planning ......................................................................64
Study unit 2.1 Strategic direction ...........................................................................65
Study unit 2.2 Internal environmental analysis ......................................................88
Study unit 2.3 External environmental analysis .....................................................99
Study unit 2.4 Strategy selection .........................................................................119
TOPIC 3: The building blocks of strategy implementation ...................................................140
Study unit 3.1 Strategy implementation ...............................................................141
Study unit 3.2 Short-term objectives, functional tactics and policies ...................147
Study unit 3.3 Leadership ....................................................................................151
Study unit 3.4 Organisational culture...................................................................164
Study unit 3.5 Reward systems ...........................................................................178
Study unit 3.6 Resource allocation ......................................................................188
Study unit 3.7 Organisational architecture, systems and processes ...................194
TOPIC 4: Building blocks of strategic control .......................................................................204
Study unit 4.1 Strategic control methodologies and approaches ........................205
TOPIC 5: Developing a strategic management plan ............................................................212
Study unit 5.1 Developing a strategic management plan ....................................213
BIBLIOGRAPHY .................................................................................................................. 230
ANNEXURE A ...................................................................................................................... 235
ANNEXURE B ...................................................................................................................... 243
MO001/0/2019 iii
, ORIENTATION
Dear Student
Welcome to the exciting world of strategic management! MNG4801 performs the
function of a capstone subject in that it forms the culmination of the concepts you
learnt in your undergraduate studies in strategic and business management. It is a
great pleasure to introduce you to this stimulating and dynamic field of study.
MNG4801 is offered as an online module supported with printed copies of all material.
This will allow you to read the study material even if you are not online. To ensure
that you share our enthusiasm for this field of study, we urge you to read this
orientation in detail. You may find that you need to refer to it as you progress through
the learning guide since it will definitely make studying this subject a lot easier.
Strategic management is about selecting effective strategies that balance the
organisation’s resources and capabilities, values and goals with its external
environment. In doing so, strategic managers are responsible for establishing a clear
strategic direction for the organisation, ensuring that the organisation reaches its
goals through the creation of a strong competitive position and the implementation of
strategy in such a way that the organisational architecture and activities are
synergistically integrated to achieve effective performance.
The learning content and activities in this guide, as well as your assignments, have
been developed in such a way that they will provide you with opportunities to delve
into the building blocks of strategic management and the role that strategic
management plays in the contemporary business environment. You will also have an
opportunity to gain knowledge of and insight into the analysis and development of
strategic plans.
PURPOSE OF THIS LEARNING GUIDE
The purpose of this learning guide is to introduce you to strategic management and
its development as a management approach. This guide will provide insight into the
building blocks of strategic management and the interrelatedness of these building
blocks. You will also have the opportunity to evaluate and develop a strategic plan.
LINK TO OTHER COURSES/MODULES
This module does not stand alone; it forms an integral part of the business
management field of study and, more specifically, your postgraduate management
studies. It builds directly on the strategic management and business management
concepts that you learnt in your undergraduate studies. If it has been some time since
you completed your undergraduate degree, we strongly recommend that you first
work through your undergraduate textbook to provide you with an introductory
overview of strategic management.
iv
