Overview of strategic management pdf

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Strategic Management Courses is considered one of the most important courses that you will take during MBA postgraduate degree as it integrates other courses, builds on them, and acts as a stepping-stone to the real world of business. The purpose of this course is to enhance your capacity to do the job of a general manager responsible for strategic performance. This course helps to develop the ability to think strategically about a business organization, its business position, and how it can gain sustainable competitive advantage.

MBA Strategic Management study material includes strategic management notes , strategic management books , strategic management case study , strategic management MCQ , strategic management syllabus , strategic management question paper , strategic management questions and answers , strategic management courses in strategic management pdf form.

Come on! Save my name, email, and website in this browser for the next time I comment. Skip to content Post last modified: 9 July Reading time: 8 mins read. Download PDF. Hill, Gareth R. Dube et al.

This is also supported by Wenger et al. He further argues that although CoPs provide a good platform for knowledge sharing and in turn an increased organisational performance it is difficult to measure their contribution to performance. Meessen and Berton posit that CoP contribution to organisational performance can be measured by evaluating the domain composition, community participation meetings, workshops and resource utilisation.

On the hand McDermott proposes a framework for assessing the contribution and influence of CoPs to business results. The framework is shown in the figure below. He argues that CoPs can be assessed using their activities, outputs, value and business results. He refers to business results as constituting operating costs, increased market penetration or reduction in product development period. In this view CoPs can be taken as an essential tool in increasing export market penetration and resultantly improve the organisational EP.

On the other hand Cateora and Graham also contend that international marketers are focusing on understanding their home and host country characteristics to gain a competitive advantage. Research has two extreme ends with the use of KMS in improving performance. Kautz and Mahnke support the cost ineffective view and allude that many organisations are frustrated by KMS as they fail to yield results after they would have invested heavily in the acquisition of the sophisticated equipment.

These systems have been proven in literature to support the organized identification of organizational knowledge scattered within the employees Alavi and Ledner, ; provide a platform for codification of both explicit and tacit knowledge Thierauf, and provide information access to all level of management in the organization Bostock, This therefore means that IT driven KMS simplify the integration of scattered knowledge Grant, ; Hidiyanto and Efendy, , increase the rate at which organizational culture and practices are conceptualized within the organization; reduce the data redundancy levels by enabling knowledge sharing among the users Quinn et al.

The capabilities of KMS cited above and EP requirements of understanding host and home country information Cateora and Graham, , improve products development Hidiyanto and Efendy, , improve export knowledge and perception in employees Gertner, Gertner and Guthery, are indicative of KMS being able to enhance EP. This can be attainable through improving the product development phase as noted by Hidiyanto and Efendy which in turn improves the product competitiveness.

It will also come in the form of simplifying information search and analysis as argued by Bostock thus increasing the understanding of the export markets, improve the organizational culture and resultantly increase export market orientation Shahmoradi, They concluded that companies that had embraced technology based KM performed better in terms of EP. However although the literature reviewed seem to suggests that IT driven KMS have a potential to improve EP Solberg and Olsson, , literature is lacking on the empirical evidence to support this idea.

This could explain the existence of the two contrasting views of KMS being effective in support of organizational performance and that of their ineffectiveness. The failure to harmonize the two could be due to the difficult associated with determining their measurement. Ferreira suggests a comparative approach to the evaluation of KMS. He argues that the improvement can be measured by the percentage in improvement as compared between system A and system B.

Chen, et al. The literature has shown that KMS have the potential to improve EP however there is no literature to support this view although as cited above the contribution KMS can make to EP is measurable.

Non- financial EP measures identified in literature relevant to the study include Export strategy, Firm characteristics, Export commitment, Export experience and Export orientation. Literature Francis and Collins-Dodd, ; Tesfom and Lutz, ; Gilaninia, shabgoo and Mosaddegh, ; Mwiti, Ofafa and Mkim, shows that the success of these measures is hinged on effective knowledge creation, knowledge transfer and effective knowledge use.

In their findings they concluded that the stage theory of internationalisation indicates the level at which the firm has gradually acquired and integrated knowledge about foreign markets. Bostock argues that KMS increase access to knowledge in distributed systems. This is also echoed by Pawlowski and Bick who proposed a KMS framework to be utilized in globalized environment. He further posit that if an organization is provided with the relevant systems to access knowledge and utilize it for a competitive advantage its market orientation is likely to change based on the new knowledge environment.

They further argue that if firms can easily access export information and be able to make meaning out of it they are likely to increase their export commitment. Gertner, Gertner and Guthery argue that export commitment can be measured by the budget allocation towards exporting, time spent searching for new knowledge on knowledge markets and the number of people dedicated to exporting activities.

While export experience can be measure by the period the firm has been exporting and export market orientation can be measure by number of countries the firm is exporting and the frequency of the exports. In line with the possibility to measure the non-financial export measures and also the posed argument in the reviewed literature above it is reasonable to propose the fourth hypothesis as follows: H4: KMS positively influence non-financial EP measures.

Koeing argues that CoPs increase the level of interaction between members of the CoP domain and community. He further argues that the interaction leads to increased export knowledge which may in turn increase growth.

Bostock argues that Intranets and Extranets increase the interaction between firms and their agents. In this view by using intranets firms engaged in indirect marketing may increase sales by use of intranets and extranets. On the other hand Content Management Systems increase access to customers across the globe through the web allowing for search relating to videos, images and various formats Mckenna, This gives it a potential to increases the export sales and profits as it increases customer trials and reduce operating costs.

The results of the KMS studies showed that limited research had been done on the subject. The limited literature on KM and KMS indicates the level at which the subject is of discussion especially from a Zimbabwean context.

It also indicated that there were no studies done in Zimbabwe regarding KMS and the role they can play to support organisational EP. Other studies focused on KM methods of preserving indigenous knowledge Ngulube, ; Kaniki and Mphahlele, Jain carried out a survey to establish the level of KM practices in east and southern Africa. He used academic libraries for his research and found out that none of the libraries were practicing something that can be related to KM.

Instead he found out that most of them believed in Information Systems practices rather than Knowledge based practices. This could suggest that the awareness of KMS is low in the region under study. Although these studies gave an insight into the subject of KM they were concentrating on identifying problems and benefits. However they did not suggest how the problems can be resolved or how the benefits can be embraced leaving a gap that need to be covered 2. The existing literature has not fully explored the utilising of KMS to improve export performance and the existence of a relationship between the two variables.

The critical success factors of KMS can be categorised into two main groups the socially driven and the IT driven factors. While on the other hand EP measures can be categorised into non-financial and financial measure.

Most of the reviewed literature also revealed that the survey study method was the most used methodology in conducting KMS and EP studies. The next chapter builds a research methodology guided by the reviewed literature.

Since a scientific research has to be conducted in a given methodology, this chapter gives an overview of how the study was carried out. It further proves the practicability of conducting the research before committing any resources to it. As such it covers among other things the research philosophy that will be used, the research design, sampling methods applied to select the participants.

It then explores the instruments that were used to collect the data, the techniques used to present and analyse the collected data. Lastly it considers other issues such as ethical considerations and the aspect of validity and reliability which are very important to research accuracy.

This was guided by the views from Zou who reviewed EP literature and concluded that the determinants of EP can be categorized into two major groups namely, non-financial and financial measures. He further argued that non-financial measures are more subjective while financial measures are more objective. They suggested that KMS adopt a socio- technical approach to meet the needs of the two taxonomies of knowledge tacit and explicit.

Non-financial export measures and socially driven KMS are more subjective in nature hence the phenomenology philosophy was adopted while financial export measures and IT driven KMS are more objective hence the positivist philosophy was also used. This dimension is also supported by Du Plooy who points out that combination is an attempt to include multiple sources of data collection in a single research project. This will in turn aid in achieving triangulation and further increase the reliability of the results as well as compensate for the limitations of each method Flick, A research design encompasses the methodology and procedures employed to conduct a research.

The research adopted a survey study methodology as suggested by the conclusions made by Zou After reviewing EP literature covering a ten year period he concluded that the survey study method had been the mostly used methodology which proves its effectiveness in the subject.

The same view was supported by Shamsuddoha and Ali who argued that nearly all the previous researches on EP they studied had used survey study as the methodology. This suggests that this is the best methodology when researching on EP.

Again this gave the relevance of the survey study method for this research. The framework for testing the role of a KMS as guided by the literature study in chapter two was adopted on this research. Furthermore the framework is all encompassing covering elements for both IT driven and socially driven KMS since a single sided testing of EP has proved to be erroneous Shamsuddoha and Ali, The study target population was constituted of participant from the Zimbabwean manufacturing industry namely non-metals, chemicals and drinks sectors.

The sectors of the industry chosen were guided by the ZimStat categorization. This categorization gives eleven industries namely food, drink, textile, wood, clothing, paper, chemicals, non-metals, transport and other. These two institutions are the government instruments to manage the local industry production and EP respectively.

Furthermore their databases contained the records of manufacturing companies that were still operational and producing for the export market. Using these databases simplified the task of identifying the relevant companies for the research. The non-metal, drink and chemical sectors were considered as these were the sectors which were intending to increase their EP and were the targeted source of revenue by the Zimbabwean government Mujuru, The table below summarizes the survey target population.

Table 3. Then within each cluster the researcher identified three key professionals with the relevant information. The judgmental approach was used as the field of study was a technical one with known individuals possessing the required information in each situation. The two questionnaires were handed over to four Information and Communication Technology ICT foreign experts attached at the National Defence College to validate the contents of the selected measures.

The two questionnaires were then modified based on the feedback after which the two questionnaires were combined into one. The combined questionnaire was given to a sample of participants from the field and the necessary adjustments made.

The questionnaires were combined to enable the testing of the relationship between EP and KMS by the same respondents. Other eternal sources in the form of publications such as magazines, reports, published financial statements and statistics from ZimStat were also used to collect data relating to each company or sector.

The use of secondary research instruments in survey studies was guided by Flick, who argues that secondary research instruments are effective tools for qualitative data collection. Lodico, Spaulding, and Voegtle, agrees and contends that triangulation reduces instrument error in survey studies thereby improving the validity of the research.

Guided by these views the research adopted both primary and secondary research instruments. The approach to use just one country for the research did not affect the results of the study. This is supported by Katsikeas, Piercy and Ioannidis who concluded that the use of one country reduces sample heterogeneity. He further contends that heterogeneity has a tendency to diminish the meaning in any research findings as also confirmed by Camillo et al.

Thus considering the differences that exist in the levels of development in southern Africa and Africa as whole the use of one country was considered most appropriate for the research. Considering the sample size of participants a questionnaire was used as it is the most cost effective and quickest instrument to collect data from such a large sample.

This is supported by Moriarty, The questionnaire was e-mailed to all participants who had access to electronic mail facilities. While those who did not have these facilities had their questionnaires hand delivered. A grace period of two weeks was given to allow the respondents to answer the questionnaires with proper analysis and not hurriedly as this would compromise the quality of the data.

A researcher assisted questionnaire survey was conducted on those identified to be interested but being not part of the sample as the study required large samples due to its complexity Sousa, However the researcher used ICT based data collection methods such as electronic mail and website searches so as to cater for time and budget limitations.

However the reviewed literature indicates a reflective measurement model. This therefore enables the use of covariance measures with minimum error as compared to a situation where there is a formative measurement model as alluded to by Coltman et al.

Thus quantitative tests such as correlational analysis, regression analysis, content analysis and chi-square tests were conducted on the data to establish the relationship between KMS and EP as well as the effect of KMS on EP and support the proposed model. This study used companies in the Zimbabwean manufacturing sector that were confirmed to be engaged in EM activities and registered with both the CZI and ZimTrade.

As such generalization or application of the study to the entire manufacturing sector may require further research.

However the research took all this into consideration by including different sectors of the manufacturing industry to cater for the variations that may arise as a change of the target population. Consistency gives the researcher confidence that the results actually represent what was intended in the study.

Reliability of instruments is shown by similar responses obtained when the same research instrument is administered to different respondents. Objectivity is qualified by Saunders et al. The rational for this is that it is important to eliminate subjectivity from the judgments made concerning the subjects under study.

However, objectivity is never probably attained completely. In addressing these key issues about research instruments, the questionnaire was pretested before the survey.

This was done with the view to reveal ambiguities, poor worded questions, and unclear choices and also to indicate whether the instructions to the respondents were clear Fowler, ; Saunders et al. The secondary data was coded through key words and themes Flick, used in EP and KMS and a relational content analysis conducted. This enabled the results to be easily repeated and still getting similar results if the same conditions are maintained. Lastly the research was operationalized and measured using EP and KMS variable and techniques from the reviewed literature.

This ensured that reliability was achieved since the measurement techniques and variables had evidence from literature of use in previous research, thus by building on previous researches the reliability of the research was assured. Furthermore the data was checked for multi-collinearity and the independent variables proved to poses proportional odds which makes it give reliable results.

However, Saunders et al. Accordingly they further stated that validity of the instruments must always be considered within the context of inferences the researcher makes regarding particular areas or topics. In other words, the researcher needs instruments that would permit him to draw warranted, or valid, conclusions about the characteristics that is, perceptions and attitude of the individuals under study.

After establishing the different measures used in literature, experts in EM and ICT were consulted to check and verify on the contents of the instruments and their feedback was used for modification. It is on the basis of having taken these procedures that the study was considered to have content validity. The limitations sections highlighted the ruling out of using Partial Least Squares PLS which are the best for testing the proposed models in a study Coltman et al. However the non-usage of PLS was ensured that it would not affect the validity of the research.

The data from secondary sources books, websites and magazines was codified and categorized according to key words and themes related to KMS and EP. The coded data was then analyzed by using relational content analysis. The collected data was mostly ordinal and nominal as such statistical methods that support non-parametric data were used. Furthermore ordinal regression analysis was used to check for the significance of the correlation identified using Spearman rho correlation. The collected data was presented in tables, pie charts and graphs to clearly indicate the gathered responses relating to each area of study that answers the research question.

The tables were used to come up with the quantities related to each variables and further meaning was made through the use of graphs and pie charts. The researcher used SPSS 20 student version as the statistical packages to find out the relationship that exists on the variables that will be measured.

The analysis and presentation enabled the researcher to determine if it can be concluded that a relationship exists between KMS and EP and justify the conceptual framework.

Respect for persons issues were considered in that all the agreements during the research were religiously observed, no data was collected without the knowledge of the institution and or individual.

Thus letter of contract of confidentiality was drafted and signed as confirmation of abiding by the agreements.

Issues to deal with beneficence were assured by giving a copy of the study to all the interested organizations without favor or bias. The risks involved were minimized by avoiding the mentioning of participating organizations or individuals so that their strategy or private information may not be revealed to their rivals or competitors.

Lastly justice was achieved through a random selection of individuals within the identified clusters which ensured that there was equal representation of all the variations in the target population. It was guided by literature which suggested a combination of qualitative and quantitative variables in the operationalization of EP and KMS. Also discussed was the population and sample size which were drawn from the Zimbabwean manufacturing sector.

Lastly the methods used for data collection, data analysis, data interpretation were discussed in line with issues of reliability, validity and ethical considerations. The next chapter looks at the practical data analysis and presentation. This chapter implements the methodology as outlined in the previous chapter. It discusses the results from the collected data by analyzing and presenting the results in graphs and tables and charts. It also seeks to fill in the identified gap by testing the different hypothesis and contribute to the existing body of knowledge.

The data collected through questionnaires, and other secondary sources was analyzed so as to address the objectives and test the hypotheses.

These were tested with significance levels being set at the standard 0. The respondent responses will be discussed first and then the hypotheses will be discussed. A total of questionnaires out of the distributed were returned. This represented a Table 4. The various attributes which include employee profession; number of employees in the company; the company sector within the industry were also analysed to ensure that the sample was representative enough to the study population.

As such it was necessary to analyse them so as to eliminate the influence they may have on the final research findings. Responses on Respondents Profession The high response from the IT professionals could have been necessitated by the use of e-mail based questionnaires since they have more access to mail services than other professions.

The respondents were asked whether they were officially registered as exporters or not using yes, no responses. The results in Table 4. This meant that the responses were not based on assumption but on actual export conditions in each of the firm. Those companies with less than 20 employees were considered as small and those with more than 20 employees as large companies.

The results in figure 4. Responses on No of Company Employees The results are shown in figure 4. The results indicated that The responses were very proportion to numbers of participants in each sector. The Drinks sector had the highest number of participants and also the highest responses and the least number of participants was in the chemicals sector so were the responses.

Responses on Company Sector in the Industry The responses were then used to group the companies according to export experience. The results in Figure 4. The results suggest that the manufacturing industry was composed mostly of new companies that are less than 30 years in operation. The questions were about basic concepts of KMS and the role they can play to enhance export performance as established from the literature study.

The outcome of the results is shown in figure 4. While The respondents were further asked to give their understanding of the categorization of KMS. This shows the consistency in the responses. As such to clear this view another question was asked as discussed below. The respondents were asked to rank their views on KMS being the best tools for enhancing export performance.

The results that emerged from this question showed that On the other hand the Figure 4. In terms of storing knowledge This outcome is in agreement with the other view given above that KMS are only comprised of IT centred systems.

The results also showed that Overally The results indicated that none of the respondents believed that there were any people centered KMS in use in their organizations. The practice was however not being recognized as a KMS systems and hence it was not being formalized and the knowledge gathered thus remained tacit and had little benefit to the organizations. On the other hand most respondents were able to identify IT centered systems in their organizations.

The figure indicates that the majority of the KMS The identified CSF in literature include export strategy, organizational culture, product innovation, firm size, government commitment, access to export knowledge, level of education, resource management and control, value addition in products, government export promotion programs, organizational commitment, export marketing Research and Development, training and involvement of employees.

The results as shown in figure 4. While the low to average rating included organisational culture 1. Organisational culture The dependent variables identified to be relevant from literature were the non-financial EP measure export growth, firm characteristics-size, export commitment, export experience, export orientation and financial EP measures export growth, export market share, export sales, export profit.

Each hypothesis will now be discussed based on the relevant test variables. This hypothesis was based on the assumption that firms would enhance their export activities through the use of KMS.

These firms may not be aware of this sleeping giant i. As such improvement in EP may not be ascertained under such circumstances. The testing of the existence of the relation between KMS and EP was done through first checking whether the respondents confirmed that they were using a KMS at their company or not. The use of the KMS at the company was then checked against the number of countries the company was exporting to and also where those countries were located either within the region or internationally or globally.

This was also further checked against the perceived nature of the knowledge form tacit or explicit in the organisation and whether the company was actually engaged in exporting or they had stopped for various reasons although still registered as exporters. CountyLoc and CompExp variables as dependent variables. The cross tabulations of the chi-square test between the existence of a KMS and the form of knowledge in the organisation showed that Also the cross tabulations between the use of a KMS and active exporting activities indicated that On the other hand only 2.

The 2. The other cross tabulation between the number of countries the firm was exporting to and the use of KMS revealed that Finally from the cross tabulations between the use of KMS and location of export host countries it emerged that One interesting aspect from this cross tabulation was that out of the firms that were not exporting to any country 2. Having seen the association from the Chi-squares test a Spearman rho correlation was also conducted to see the effect of using KMS on the number of countries a company was exporting.

When the knowledge form variable was tested as the dependent variable the Spearman rho correlation coefficient was. The three options were taken as independent variables and the financial and non-financial EP measures as dependent variables. Furthermore using the combined KMS as the independent variable was regressed against the EP measures as identified in the conceptual framework to determine their effect on each dependent variables so as to confirm the above findings. The statistics from the ordinal regression showed a sensitivity and positivity test of This was also clear in that organizations that were performing well confirmed to be using IT driven KMS and were also using social driven KMS although unaware of it as it emerged from the secondary data.

The increase in EP as result of utilizing both systems was actually 1. However while using IT driven KMS influence was realized to be significant on all financial export measures and none of the social driven EP measures as indicated above in section 4. On the other hand social driven KMS had a significant influence on all non-financial EP measures but none on financial performance measures as also indicated in section 4.

The outcome of the results is shown in the figure below. The finding of formulating and adopting a framework was in line with the conclusions by Pawlowski and Bick who suggests that the field of KM and KMS needs guiding frameworks for it to be implemented successfully in support of any given role.

These thematic areas will now be discussed in detail. This supports the views by Zou that small companies are less likely to engage in exporting as compared to large companies.

This could be probably due to a view of being incapacitated in terms of human capital and this condition presents a good environment for the role of KMS as a lasting solution to this shortcoming. The results also indicated that the Zimbabwean manufacturing industry was composed mostly of new companies that were less than 30 years in operation. Considering the need for experience in exporting as suggested by Marandu who concluded that the longer the experience the higher the EP.

This could explain the low EP in the manufacturing sector. There is therefore need to find out how the inexperienced companies can stand the global competition from century old Multinationals.

This suggests that KMS can be treated as ordinary computer systems that cannot predict pattern and advice in taking positive less risk decision.

However these views are in agreement with the current agreed definitions of KMS in literature which are normally related to IT based system Thierauf, ; Alavi and Leidner, ; Hidayanto and Efendy, ; Assegaf and Hussin, As such the fact that these powerful systems could be used for providing basic internet or relational database systems. This was supported by the finding that there was acceptance in most of the respondents that KMS are primarily for knowledge transfer and have little or no role in knowledge creation, retention or utilization.

This suggests a low awareness of the role that KMS play in supporting export knowledge management activities and hence the lack of realisation of benefits from export promotions programs from ZimTrade. The study also showed that there was little understanding of the two categories of people centered and IT centered systems.

It appears that the Industry would need more education about KMS before it can start to appreciate their role in enhancing EP. First the test that was using IT driven system only was done. This tested showed that there is a positive relationship between IT driven systems and financial EP measures and a negative relationship between IT driven systems and non-financial EP measure. Each of these components will receive much greater attention in a later chap- company mission ter.

The intention here is simply to introduce them. The unique purpose that sets a company apart Company Mission from others of its type and identifies the scope The mission of a company is the unique purpose that sets it apart from other companies of of its operations.

For example, Lee Hun-Hee, the new chairman of the Samsung Group, revamped the company mission by stamping his own brand of management on Samsung. This corporate act of downscaling reflected a revised management philosophy that favored specialization, thereby changing the direction and scope of the organization. A firm needs to set social responsibility aspirations for itself, just as it does in other areas of corporate performance.

The strategic management model shows the external environment as three interactive segments: the remote, industry, and operating environments.

Strategic Analysis and Choice Simultaneous assessment of the external environment and the company profile enables a firm to identify a range of possibly attractive interactive opportunities. These opportunities are possible avenues for investment.

However, they must be screened through the criterion of the company mission to generate a set of possible and desired opportunities. This screening process results in the selection of options from which a strategic choice is made. The process is meant to provide the combination of long-term objectives and generic and grand strategies that optimally position the firm in its external environment to achieve the company mission.

Multibusiness companies find their managers focused on the question of which combination of businesses maximizes shareholder value as the guiding theme during their strategic analysis and choice. Long-Term Objectives long-term The results that an organization seeks over a multiyear period are its long-term objectives.

Generic and Grand Strategies generic strategies Fundamental philo- Many businesses explicitly and all implicitly adopt one or more generic strategies charac- sophical options for the terizing their competitive orientation in the marketplace. Low cost, differentiation, or focus design of strategies. They usually combine these capabilities with a comprehensive, general plan of major actions through which their firm intends to achieve its long-term grand strategies objectives in a dynamic environment.

Called the grand strategy, this statement of means The means by which indicates how the objectives are to be achieved. Although every grand strategy is, in fact, a objectives are achieved. Each of these grand strategies will be covered in detail in Chapter 7. Short-Term Objectives Short-term objectives are the desired results that a company seeks over a period of one year or less.

Companies short-term typically have many short-term objectives to provide guidance for their functional and objectives operational activities. Thus, there are short-term marketing activity, raw material usage, Desired results that employee turnover, and sales objectives, to name just four. Second, they establish a clear time frame for completion of each action. These short-term, limited-scope plans are called functional tactics. A radio ad Short-term, narrow campaign, an inventory reduction, and an introductory loan rate are examples of tactics.

Policies are broad, precedent-setting decisions Predetermined decisions that guide or substitute for repetitive or time-sensitive managerial decision making.

Policies often increase managerial effectiveness by standardizing routine decisions and empowering or expanding the discretion of managers and subordinates in implementing business strategies.

The standard formula used to calculate return on investment for the 6 strategic business units of General Electric. A decision that Sears service and repair employees have the right to waive repair charges to appliance customers they feel have been poorly served by their Sears appliance.

Restructuring, Reengineering, and Refocusing the Organization Until this point in the strategic management process, managers have maintained a decid- edly market-oriented focus as they formulate strategies and begin implementation through action plans and functional tactics. Now the process takes an internal focus—getting the work of the business done efficiently and effectively so as to make the strategy successful.

What is the best way to organize ourselves to accomplish the mission? Where should leader- ship come from? What values should guide our daily activities—what should the organiza- tion and its people be like?

How can we shape rewards to encourage appropriate action? Downsizing, restructur- ing, and reengineering are terms that reflect the critical stage in strategy implementation wherein managers attempt to recast their organization.

The elements of the strategic management process are evident in the recent activities at Ford Motor Company. In , Ford undertook to create a strategy to lower costs, increase efficiency, improve designs, and increase brand appeal. These improvements were needed to keep cash flows up to cover rising pension costs. For Ford to accomplish this new strategy it had to improve operations. New executives were brought in to lead product development and financial controls.

To break down the bureaucratic boundaries, a committee was created that included employees from the major functional areas, and it was given the assignment to reduce the time needed to develop a new-concept vehicle.

Strategic Control and Continuous Improvement strategic control Strategic control is concerned with tracking a strategy as it is being implemented, detect- Tracking a strategy as it ing problems or changes in its underlying premises, and making necessary adjustments.

In is being implemented, contrast to postaction control, strategic control seeks to guide action on behalf of the generic detecting problems or changes in its under- and grand strategies as they are taking place and when the end results are still several years lying premises, and away. The rapid, accelerating change of the global marketplace of the last 10 years has making necessary made continuous improvement another aspect of strategic control in many organizations.

A form of strategic However, even in its early implementation stages the strategy required revisions. Additionally, for Yahoo! Thus, the strategic management model in Exhibit 1. In the strategic management process, the flow of information involves historical, lated stages of analysis toward the achievement current, and forecast data on the operations and environment of the business.

Manag- of an aim. The interrelated stages of the process are the 11 components discussed in the previous Influential people who section. First, business. Most of the arrows in the model point two ways, suggesting that the flow of information usually is reciprocal.

A specific example is a power company that is persuaded, in part by governmental incentives, to include a commitment to the develop- ment of energy alternatives in its mission statement. A second implication of viewing strategic management as a process is that strategy formulation and implementation are sequential.

The process begins with development or reevaluation of the company mission. This step is associated with, but essentially followed by, development of a company profile and assessment of the external environment.

Then follow, in order, strategic choice, definition of long-term objectives, design of the grand strategy, definition of short-term objectives, design of operating strategies, institutionaliza- tion of the strategy, and review and evaluation. The apparent rigidity of the process, however, must be qualified. However, no matter where the need for a reassessment originates, the strategic management process begins with the mission statement.

Second, not every component of the strategic management process deserves equal atten- tion each time planning activity takes place. Firms in an extremely stable environment may find that an in-depth assessment is not required every year.

Companies often are satisfied with their original mission statements even after a decade of operation and spend only a minimal amount of time addressing this subject. A third implication of viewing strategic management as a process is the necessity of feedback from institutionalization, review, and evaluation to the early stages of the process.

Therefore, as indicated in Exhibit 1.