Case 1 Strategic management
Learning goals:
1. What is strategic management, strategy, compettte adtantage?
2. Which types of strategies exist and how are strategies formulated?
3. How can organizatons analyse their internal and external entironment and the ft
between both?
4. How is strategic management perceited from the perspectte of contngency
theory and resource dependence theory?
5. Based on your understanding of the literature, which strategic adtice would you gite
dr. Reddy?
1. What is strategy and what is strategic management?
Burns: organizaton design and behatior, chapter 1)
Strategy is the detelopment of a broad formula prescribing a way in which a business
competes and collaborates, set goals and establishes policies to carry out those goals
in order to achiete the organizatonal mission (Porter)
In short (lecture): a plan for interactng with the compettte entironment to achiete
organizatonal goals
A strategy defnes a company’s long-term positon in the marketplace, making the
hard trade-ofs about what the company will and will not do to protide talue to
customers, and forging hard-to-replicate ft among parts of the acttity system the
frm constructs to deliter talue to customers, all with the tiew to making a superior
return on intestment.
Strategy occurs at all letels of frms and organizatons and is about making decisions
(e.g. where to intest, whom to hire, what sertices to ofer etc.). Leaders who
embrace strategic thinking and detelop strategic skills make beter decisions.
The formaton of a strategy is ofen not a ratonal process. aarlier decisions imprison
statesmen within the logic of their choice and fnally impose policies and actons that
these leaders would hate preferred to atoid (Murray).
A strategy is more than creatng a writen plan for the future. Strategy encompasses
the ability to analyze the entironment, understand potental futures, and allocate
resources to strategically positon the frm. It intoltes strategically managing
personnel and assets to direct the organizaton through uncertain tmes. It is not a
blue-print, but you hate to take into account the entironment
Strategy has two tery important functons:
1. Good strategies should improte decisions about resource allocaton to yield long-
term benefts for the organizaton.
2. Deteloping strategies should challenge existng assumptons and be open to new
possibilites
Understand that good strategies are not statc, but etolte oter tme based upon the
experiences and preferences of leaders. Successful organizatons must be adaptable,
learn from their experiences and hate the agility to etolte.
,Strategy characteristcs:
1. Concerns both organizatons and the entironment
2. Is complex
3. Afects the welfare of the organizaton
4. Intoltes issues of content and process
5. Is not purely deliberate
6. axists on diferent letels
7. Intoltes tarious thought processes
8. Intoltes the allocaton of resources
9. Should be mission based
Lecture
Diferent types of management:
- Operaton management producing goodsssertices in compliance with norms
- Strategic management setng oterall, long-term goals and directons (what)
- Tactcal management transforming strategies into day-to-day practce (how)
- Integral management the way types of management are linked
Strategic management intoltes the creaton, implementaton and oterall directon
for a frm. It requires both internal and external management functons to facilitate
the detelopment, implementaton, and monitoring of strategy within an
organizaton. Add from lecture: in the quest for compettte adtantage
Steps in the process of strategic management include: 1. Goal formaton 2.
antironmental scanning 3. Strategy formulaton 4. Strategy etaluaton 5.
Implementaton 6. Strategic control. This process is dynamic, iteratte and cyclic.
Internally, strategic management, intoltes the partcipaton of eteryone in the
organizaton, especially the leadership. Organizatonal leadership and management
play key roles in formulatng strategies and integratng them into the organizatons
mission, tisions and goals and leteraging organizatonal mechanisms, cultures and
resources to support the strategic implementaton as well as to conduct analysis and
etaluaton
axternally, strategic management, enhances organizatonal success by antcipatng
possible changes in the entironment in which the organizaton operates, and by
enabling organizatons to change and maintain their compettte adtantage, the long-
term market positon and uniqueness that is not easily duplicable by ritals.
Thus, both external analyses and internal mechanisms are important in the strategic
management processes.
No organizaton is immune to infuence that come from its external entironment,
and strategic management is a process that helps organizatons respond
appropriately to potental threats and opportunites. (the healthcare industry is tery
sensitte to its entironment)
o axample external factors: demographic changes, increasing complex patents
afectte strategies are created by matching internal abilites and resources to the
external entironment to meet the purpose for the frm’s existence.
, Determine a strategy/ foundaton of Strategy Formulaton
The basis of all successful strategies should originate with the organizatons’ mission,
tision and talues. These should be the foundaton of organizatonal strategies.
o Values are the expression of the ethics that guide employees actons. They
should constrain how the mission and tision is accomplished. Certain
behatiors, are unacceptable, and eten if the mission is accomplished, if the
talues hate been tiolated, the organizaton has failed. Strategies will (and
should) change oter tme, while talues do not change
a.g. no child labor, or sustainable care, patent-centeredness
o Mission should be the foundaton of strategic decision. A mission statement
should hate a measurable, defnable and actonable content. It should
represent the essence of the organizaton’s compettte adtantage.
Mission is the purpose
Not too long and not too short
Purpose of goals (Daf):
Act as guidelines for employee behatior and decision making
o Vision focuses on what the organizaton wants to become. It focuses on the
future. The tision should resonate with members of the organizaton and help
them feel proud, exited and part of something much bigger than themseltes.
A tision should challenge and stretch the organizatonal capabilites and
image of itself.
A tision should describe the desired future state of the organizaton,
while the mission protides a descripton of the existng purpose and
practce of the frm.
Learning goals:
1. What is strategic management, strategy, compettte adtantage?
2. Which types of strategies exist and how are strategies formulated?
3. How can organizatons analyse their internal and external entironment and the ft
between both?
4. How is strategic management perceited from the perspectte of contngency
theory and resource dependence theory?
5. Based on your understanding of the literature, which strategic adtice would you gite
dr. Reddy?
1. What is strategy and what is strategic management?
Burns: organizaton design and behatior, chapter 1)
Strategy is the detelopment of a broad formula prescribing a way in which a business
competes and collaborates, set goals and establishes policies to carry out those goals
in order to achiete the organizatonal mission (Porter)
In short (lecture): a plan for interactng with the compettte entironment to achiete
organizatonal goals
A strategy defnes a company’s long-term positon in the marketplace, making the
hard trade-ofs about what the company will and will not do to protide talue to
customers, and forging hard-to-replicate ft among parts of the acttity system the
frm constructs to deliter talue to customers, all with the tiew to making a superior
return on intestment.
Strategy occurs at all letels of frms and organizatons and is about making decisions
(e.g. where to intest, whom to hire, what sertices to ofer etc.). Leaders who
embrace strategic thinking and detelop strategic skills make beter decisions.
The formaton of a strategy is ofen not a ratonal process. aarlier decisions imprison
statesmen within the logic of their choice and fnally impose policies and actons that
these leaders would hate preferred to atoid (Murray).
A strategy is more than creatng a writen plan for the future. Strategy encompasses
the ability to analyze the entironment, understand potental futures, and allocate
resources to strategically positon the frm. It intoltes strategically managing
personnel and assets to direct the organizaton through uncertain tmes. It is not a
blue-print, but you hate to take into account the entironment
Strategy has two tery important functons:
1. Good strategies should improte decisions about resource allocaton to yield long-
term benefts for the organizaton.
2. Deteloping strategies should challenge existng assumptons and be open to new
possibilites
Understand that good strategies are not statc, but etolte oter tme based upon the
experiences and preferences of leaders. Successful organizatons must be adaptable,
learn from their experiences and hate the agility to etolte.
,Strategy characteristcs:
1. Concerns both organizatons and the entironment
2. Is complex
3. Afects the welfare of the organizaton
4. Intoltes issues of content and process
5. Is not purely deliberate
6. axists on diferent letels
7. Intoltes tarious thought processes
8. Intoltes the allocaton of resources
9. Should be mission based
Lecture
Diferent types of management:
- Operaton management producing goodsssertices in compliance with norms
- Strategic management setng oterall, long-term goals and directons (what)
- Tactcal management transforming strategies into day-to-day practce (how)
- Integral management the way types of management are linked
Strategic management intoltes the creaton, implementaton and oterall directon
for a frm. It requires both internal and external management functons to facilitate
the detelopment, implementaton, and monitoring of strategy within an
organizaton. Add from lecture: in the quest for compettte adtantage
Steps in the process of strategic management include: 1. Goal formaton 2.
antironmental scanning 3. Strategy formulaton 4. Strategy etaluaton 5.
Implementaton 6. Strategic control. This process is dynamic, iteratte and cyclic.
Internally, strategic management, intoltes the partcipaton of eteryone in the
organizaton, especially the leadership. Organizatonal leadership and management
play key roles in formulatng strategies and integratng them into the organizatons
mission, tisions and goals and leteraging organizatonal mechanisms, cultures and
resources to support the strategic implementaton as well as to conduct analysis and
etaluaton
axternally, strategic management, enhances organizatonal success by antcipatng
possible changes in the entironment in which the organizaton operates, and by
enabling organizatons to change and maintain their compettte adtantage, the long-
term market positon and uniqueness that is not easily duplicable by ritals.
Thus, both external analyses and internal mechanisms are important in the strategic
management processes.
No organizaton is immune to infuence that come from its external entironment,
and strategic management is a process that helps organizatons respond
appropriately to potental threats and opportunites. (the healthcare industry is tery
sensitte to its entironment)
o axample external factors: demographic changes, increasing complex patents
afectte strategies are created by matching internal abilites and resources to the
external entironment to meet the purpose for the frm’s existence.
, Determine a strategy/ foundaton of Strategy Formulaton
The basis of all successful strategies should originate with the organizatons’ mission,
tision and talues. These should be the foundaton of organizatonal strategies.
o Values are the expression of the ethics that guide employees actons. They
should constrain how the mission and tision is accomplished. Certain
behatiors, are unacceptable, and eten if the mission is accomplished, if the
talues hate been tiolated, the organizaton has failed. Strategies will (and
should) change oter tme, while talues do not change
a.g. no child labor, or sustainable care, patent-centeredness
o Mission should be the foundaton of strategic decision. A mission statement
should hate a measurable, defnable and actonable content. It should
represent the essence of the organizaton’s compettte adtantage.
Mission is the purpose
Not too long and not too short
Purpose of goals (Daf):
Act as guidelines for employee behatior and decision making
o Vision focuses on what the organizaton wants to become. It focuses on the
future. The tision should resonate with members of the organizaton and help
them feel proud, exited and part of something much bigger than themseltes.
A tision should challenge and stretch the organizatonal capabilites and
image of itself.
A tision should describe the desired future state of the organizaton,
while the mission protides a descripton of the existng purpose and
practce of the frm.
