Strategic Management
Essay title: Strategic Management
Chapter 1- Strategic management, creating competitive advantage
Strategic management consists of the analysis, decisions and actions of an organisation in order to create and sustain competitive advantage.
2 main elements of strategy
i.ongoing process of analysis, decisions and actions
ii.to study why some firms outperform others.
Michael Porter argues that sustainable competitive advantage cannot be achieved through operational effectiveness alone.
4 key attributes of strategic management
i.direction toward overall organisational goals and objectives – “organisational versus individual rationality”
ii.management includes multiple stakeholders in decision making
iii.management requires incorporating both short term and long term perspectives – “creative tension”
iv.management involves the recognition of trade offs between effectiveness and efficiency – “doing the right thing” versus “doing things right”.
Henry Mintzberg- in his view, the business environment is far from predictable, thus limiting out ability for analysis. Further, decisions in an organisation are seldom based on optimal rationality alone, given the political processes that occur in all organisations.
Therefore, there are intended/ deliberate strategies, unrealised strategies and emergent strategies.
2 alternative perspectives to stakeholder management
i.Zero-sum- looks upon various stakeholders as competing for attention an resources of the organisation. This perspective is rooted, in part, in the traditional conflict between workers and management.
ii.Symbiosis- organisations can achieve mutual benefits when recognising that stakeholders are dependent
upon each other for their success and well-being.
Intellectual capital- knowledge has become the direct source of competitive advantage for companies selling ideas and relationships as well as indirect sources of competitive advantage for all companies trying to differentiate themselves from rivals by how they create value for their customers.
Enhancing employee involvement in the strategic management process- develop and mobilise people and other assets in the organisations, leaders are needed throughout the organisation.
benefits of a good mission statement
i.help channel employees behaviour
ii.challenges help motivate
iii.help resolve conflict between departments
iv.provide a yardstick for rewards and incentives
Lecture notes
A.P. Sloan- strategy is all about positioning
A.D. Chandler- structure follows strategy
I Ansoff- strategy as planning
Chapter 2- Analysing the external environment of the firm
environmental monitoring- tracks the evolution of environmental trends, sequences of events or streams of activities.
Competitive intelligence- helps firms define and understand their industry and identify rivals strengths