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CH. 1
Strategic Management
CH. Summary
Strategic management is the_ set of decisions and actions that result in the_
formulation and implementation of plans designed to achieve a company’s objectives.
Because it involves long-term, future-oriented, complex decision making and requires
considerable resources, top-management participation is essential. This CH.
describes strategic management as a three-tier process involving corporate-,
business-, and functional-level planners, and support personnel. At each progressively
lower level, strategic activities are more specific, narrow, short-term, and action-
oriented, with lower risks but fewer opportunities for dramatic impact.
The_ strategic management model presented in this CH. serves as the_ structure for
understanding and integrating all the_ major phases of strategy formulation and
implementation. The_ CH. provides a summary account of these phases, each of
which is given extensive individual attention in subsequent chapters. Finally, the_ CH.
stresses that the_ strategic management process centers on the_ belief that a firm’s
mission can be best achieved through a systematic and comprehensive assessment of
both its internal capabilities and its external environment.
Number range NL1Learning Objectives
1. Explain the_ concept of strategic management.
2. Number range NL_aDescribe how strategic decisions differ from other decisions
that managers make.
3. Number range NL_aName the_ benefits and risks of a participative approach to
strategic decision making.
4. Number range NL_aUnderstand the_ types of strategic decisions for which
managers at different levels of the_ company are responsible.
5. Number range NL_aDescribe a comprehensive model of strategic decision
making.
6. Number range NL_aAppreciate the_ importance of strategic management as a
process.
1
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7. Number range NL_aGive examples of strategic decisions that companies have
recently made.
Number range NL1Lecture Outline
INumber range NLA. The_ Nature and Value of Strategic Management
ANumber range NL1. Exhibit 1.1, Strategy in Action gives an example of how a
poor decision affected Xerox to the_ tune of $107 billion. Strategic
management is defined as the_ set of decisions and actions that result in the_
formulation and implementation of plans designed to achieve a company’s
objectives.
2
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1Number range NL_a. Strategic management comprises nine critical tasks:
aNumber range NL_1_) Formulate the_ company’s mission, including
broad statements about its purpose, philosophy, and goals.
bNumber range NL_1_) Conduct an analysis that reflects the_
company’s internal conditions and capabilities.
cNumber range NL_1_) Assess the_ company’s external environment,
including both the_ competitive and the_ general contextual factors.
dNumber range NL_1_) Analyze the_ company’s options by matching
its resources with the_ external environment.
eNumber range NL_1_) Identify the_ most desirable options by
evaluating each option in light of the_ company’s mission.
fNumber range NL_1_) Select a set of long-term objectives and grand
strategies that will achieve the_ most desirable options.
gNumber range NL_1_) Develop annual objectives and short-term
strategies that are compatible with the_ selected set of long-term
objectives and grand strategies.
hNumber range NL_1_) Implement the_ strategic choices by means of
budgeted resource allocations in which the_ matching of tasks, people,
structures, technologies, and reward systems is emphasized.
iNumber range NL_1_) Evaluate the_ success of the_ strategic
process as an input for future decision making.
2Number range NL_a. As these tasks indicate, strategic management
involves the_ planning, directing, organizing, and controlling of a
company’s strategy-related decisions and actions.
aNumber range NL_1_) Strategy means managers’ large-scale, future-
oriented plans for interacting with the_ competitive environment to
achieve company objectives.
bNumber range NL_1_) A strategy is a company’s game plan. It does
not precisely detail all future deployments, but it does provide a
framework for managerial decisions.
cNumber range NL_1_) A strategy reflects a company’s awareness of
how, when, and where it should compete; against whom it should
compete; and for what purposes it should compete.
BNumber range NL1. Dimensions of Strategic Decisions
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1Number range NL_a. Typically, strategic issues have the_ following
dimensions:
aNumber range NL_1_) Strategic issues require top-management
decisions.
(1)Number range NL_(a)Because strategic decisions overarch several
areas of a firm’s operations, they require top-management
involvement.
(2)Number range NL_(a)Usually only top management has the_
perspective needed to understand the_ broad implications of such
decisions and the_ power to authorize the_ necessary resource
allocations.
4
CH. 1
Strategic Management
CH. Summary
Strategic management is the_ set of decisions and actions that result in the_
formulation and implementation of plans designed to achieve a company’s objectives.
Because it involves long-term, future-oriented, complex decision making and requires
considerable resources, top-management participation is essential. This CH.
describes strategic management as a three-tier process involving corporate-,
business-, and functional-level planners, and support personnel. At each progressively
lower level, strategic activities are more specific, narrow, short-term, and action-
oriented, with lower risks but fewer opportunities for dramatic impact.
The_ strategic management model presented in this CH. serves as the_ structure for
understanding and integrating all the_ major phases of strategy formulation and
implementation. The_ CH. provides a summary account of these phases, each of
which is given extensive individual attention in subsequent chapters. Finally, the_ CH.
stresses that the_ strategic management process centers on the_ belief that a firm’s
mission can be best achieved through a systematic and comprehensive assessment of
both its internal capabilities and its external environment.
Number range NL1Learning Objectives
1. Explain the_ concept of strategic management.
2. Number range NL_aDescribe how strategic decisions differ from other decisions
that managers make.
3. Number range NL_aName the_ benefits and risks of a participative approach to
strategic decision making.
4. Number range NL_aUnderstand the_ types of strategic decisions for which
managers at different levels of the_ company are responsible.
5. Number range NL_aDescribe a comprehensive model of strategic decision
making.
6. Number range NL_aAppreciate the_ importance of strategic management as a
process.
1
,TEST BANK
7. Number range NL_aGive examples of strategic decisions that companies have
recently made.
Number range NL1Lecture Outline
INumber range NLA. The_ Nature and Value of Strategic Management
ANumber range NL1. Exhibit 1.1, Strategy in Action gives an example of how a
poor decision affected Xerox to the_ tune of $107 billion. Strategic
management is defined as the_ set of decisions and actions that result in the_
formulation and implementation of plans designed to achieve a company’s
objectives.
2
,TEST BANK
1Number range NL_a. Strategic management comprises nine critical tasks:
aNumber range NL_1_) Formulate the_ company’s mission, including
broad statements about its purpose, philosophy, and goals.
bNumber range NL_1_) Conduct an analysis that reflects the_
company’s internal conditions and capabilities.
cNumber range NL_1_) Assess the_ company’s external environment,
including both the_ competitive and the_ general contextual factors.
dNumber range NL_1_) Analyze the_ company’s options by matching
its resources with the_ external environment.
eNumber range NL_1_) Identify the_ most desirable options by
evaluating each option in light of the_ company’s mission.
fNumber range NL_1_) Select a set of long-term objectives and grand
strategies that will achieve the_ most desirable options.
gNumber range NL_1_) Develop annual objectives and short-term
strategies that are compatible with the_ selected set of long-term
objectives and grand strategies.
hNumber range NL_1_) Implement the_ strategic choices by means of
budgeted resource allocations in which the_ matching of tasks, people,
structures, technologies, and reward systems is emphasized.
iNumber range NL_1_) Evaluate the_ success of the_ strategic
process as an input for future decision making.
2Number range NL_a. As these tasks indicate, strategic management
involves the_ planning, directing, organizing, and controlling of a
company’s strategy-related decisions and actions.
aNumber range NL_1_) Strategy means managers’ large-scale, future-
oriented plans for interacting with the_ competitive environment to
achieve company objectives.
bNumber range NL_1_) A strategy is a company’s game plan. It does
not precisely detail all future deployments, but it does provide a
framework for managerial decisions.
cNumber range NL_1_) A strategy reflects a company’s awareness of
how, when, and where it should compete; against whom it should
compete; and for what purposes it should compete.
BNumber range NL1. Dimensions of Strategic Decisions
3
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1Number range NL_a. Typically, strategic issues have the_ following
dimensions:
aNumber range NL_1_) Strategic issues require top-management
decisions.
(1)Number range NL_(a)Because strategic decisions overarch several
areas of a firm’s operations, they require top-management
involvement.
(2)Number range NL_(a)Usually only top management has the_
perspective needed to understand the_ broad implications of such
decisions and the_ power to authorize the_ necessary resource
allocations.
4
