Strategic Management Definition: It has the following definitions: determine future direction, implementing decisions, and achieving objectives.

. Matching activities with environment. Management process that determine long term structure and activities. Evolution of guiding ideas according to continually changing circumstances. Broad collection of decision rules that define scope and growth direction. The concept of strategic management builds on definition of strategic planning. It is insufficient if not followed by the implementation of the plan and the evaluation of the plan in action. It is the process by which the guiding members of an organization envision its future and develop the necessary procedures to achieve that future. The process of assessing the organization and its environment in order to meet long term objectives and also to adapt to environment through manipulation of opportunities and reduction of threat. Characteristics of strategic management: decisions are based on futurity. Decisions concerned with long term impact Continuous and repetitive process of nature. Systematic and rational Integrated function Strong sense of identity, direction and purpose Focus on scope Gain competitive advantage over competitors Match between activities and environment

Manager's role: creating opportunities by knowing organization resource base recognizes need for new resources understand impact of strategic decisions on activities match intent with activates.

Levels of strategy: corporate strategy level business level or competitive strategy level (how the what to be done) Operational strategy level (implementation of instructions) Strategic management process: analysis: - understand market position of organization in relation to its environment choice: - out of many options shall choose on that is feasible and acceptable. - Choosing best strategy depends on leaders, personal factors and environmental factors. Implementation: - involves planning and allocation of resources and management of the people working for the organization and needs: - suitable structure and functional strategies matching and supporting each. - Harness all resources and management support - Measurement and control system - Information and communication must be in place - Manager's commitment, motivation and support to suppress risks associated with change. - Modify management system to fit and facilitate The five process of strategic management are: preplanning strategic planning deployment implementation
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 measurement and evaluation strategic management is the deployment and implementation of the strategic plan and measurement and evaluation of the results. Deployment involves completing the plan and communicating it to all employees. Implementation involves re-sourcing the plan, putting it into action and managing these actions. Measurement and evaluation consists of tracking implementation actions and assessing how the organization is changing as a result of these action and using that information to update the plan. Definition of management: It is the people at the top. It is an economic organ of an industrial society Management is the science and art of organizing resources to achieve the goals of an organization in the most effective way. Management is doing work through others. Management is an open system of inputs, process, output and feedback. Definition of an organization: it is a body that is set up to meet human needs by providing people with goods and services. It is a tool used by people to coordinate their actions to obtain something that they desire. It is a response to, or a means of satisfying some human needs. It is mechanism for value creation. Value creation stages: input. Conversion. Output. The inputs are:

Raw materials. Human resources. Information and knowledge. Money and capital. Customers.

Conversion process: machinery computers human skills external environment: it includes the economic, social and political factors together with sources of inputs and the marketplace for the outputs e.g Customers Shareholders Suppliers Distributors Government Competitors Outputs: finished goods services dividends salaries and wages profit use resources

feature of an organization: have to be accountable have to meet legal requirements has a formal structure organization activity which includes:

- output of goods and services - consumption by clients of output

- use of resources - carrying out of functions - interaction with external factors.

Organization resources: Land . Rent Labor wage Capital .. interest Enterprise .. profit

Organization functions: production marketing finance administrative tasks personnel research and development

the management approach classifies the management functions as follows: planning organizing leading controlling communicating coordinating decision making types of planning to identify the types of planning the following criteria are needed: the organizational framework criteria the time duration criteria the scope criteria

types of planning: Central planning Planners have all the powers to design an implement the plans. In this type the distinction between the planners and decision makers almost disappear. An example for such system of planning was the soviet union before its disintegration. Indicative planning the planners have little direct control of economic and social policies. Their main task is to provide information and forecast some possible future options. They are mostly advocates and not actual decision makers. This system is used by France and Japan. Mixed or development planning It lies between the above mentioned types of planning. The planning authority may be a ministry, a department or a central planning office. Comprehensive planning It is called the aggressive, global, national or overall planning. It should not, however, confused with a strict centralization of the decisions and actions. It embraces all the important factors which are important for a country's economy as a whole. The meaning of management There is no generally accepted definition of management as an activity, however, different scholars defined it differently: Henri Fayol definition: "to manage is to forecast and plan, to organize and command, to coordinate and to control" E.F.L. Brech's definition: "management is a social process the process consists ofplanning, control, coordination and motivation"

 Koontz and O'Donnell's definition: "managing is an operational process initially best dissected by analyzing the managerial functionsthe five managerial functions are planning, organizing, staffing, directing an leading, and controlling. There are five areas of management which are: obsession with responsiveness to customers constant innovation in all areas of the firm partnership leadership that love change instead of fighting control by simple support systems and the aim should be "measuring the right staff".

Difference between management and administration: The terms " management and administration" had been used interchangeably, however, in the last forty years the term management is understood as the encompassing much more than administration which tended to be understood as the narrower process of developing and maintaining procedures. Definitions of organizations: organizations are complicated human strategies designed to achieve certain objectives. Organizations are setup to achieve purposes that individuals cannot achieve on their own. Relationship between management and organization theory: The relationship is summed up by Handy and based it on the role of the manager. He suggest that the key variables a manager has to grapple with are: people work and structure systems and procedures

these variable cannot b e dealt with in isolation but within the constrains of an environment in which he sees three crucial components: the goals of the organization the technology available the culture of the organization (its values and believes) the process of management: the process of management is concerned with the elements of inputs, conversion and output. It is also concerned with systematic organization of economic resource and its task is to make these resources productive. Management is not an activity that exists in its own. It is a description of a variety of activities carried out by those members of organization whose role is of a manager. The groupings of management activities can be summarized as follows: Planning (deciding the objectives of the organization and preparing how to meet them) Organizing (determining activities and allocating responsibilities for the achievement of plans). A framework for strategic intervention The field of development management is more complex than straightforward business management which has diverse objectives specifically profit. The development manager has to serve many conflicting objectives. He has to be the economist who assumes that everything else will remain constant while he defines his economic model of development and the sociologist whose passion is to understand how people live and interact with each other and the politician who specializes in balancing the powers of contending forces. The development manager must follow a wholistic approach to bring all these developmental factors together to form an integrated development strategy. Environmental development process:

Environmental development involves the management of a geographic area and the development agencies intervene to promote the growth and productivity. Area and agency interface The interface between the development agency an the area earmarked for development is the effective management of the area resources. Agency and industry/sector interface. He linkage between the development agency and industry/sector is the mobilization of build up of industrial capabilities. Area and industry/sector interface The interaction between industry/sector and area happens at various levels starting from the harnessing the area resources and translating them into industry investment. The real environmental development is the process of optimizing the use of are, industry/sector and agencies resources to bring them the highest levels productivity which means generating a greater amount of goods and service by and for the people through efficient means. Real environment development takes a longer run and it is managed at the area level through various stages of intervention by a development agency. In the: first stage: the agency scans the environment to look for development opportunities and watch out for threats that may impede development. second stage: the agency defines its mission and sets objectives in full recognition of environmental trends. third stage: is the selection of the optimal strategy. The fourth stage: The agency outlines detailed programs and budgets for these programs to carry out development projects. The fifth stage:

Contingency plans established.

Economic development process: The economic development process involves the conversion of resources into investments and investments into goods and services and goods and services into income and income back into resources distributed to beneficiaries. The Multiplication process The Subtraction process: The production of goods and serves emanate from investments made by the development agencies involved. The investments come in the form of land, buildings, labor, machinery and funds. It is called subtraction process due to the fact that there is a deduction in potential income. The deduction occurs through the payment of commission to market brokers and middlemen. The additional process: As the production units sell their goods and services to the market, there are revenues realized. If these revenues exceed the costs of production, profits are obtained and values are added to the economy. This clearly an addition process that should happen if the economic development process is to be considered a success. The division process: in the distribution of benefits, there is a sharing of the profits or value added. This is the division aspect in the economic development process. Without division there is no real development because the fruits of development do not accrue to and are not enjoyed by the people> to summarize, the economic development process is one of resource mobilization and multiplication of these resources. Socio-political development process: Human infrastructure and institution building is the objective of the socio-political development process. It is a social process because it concerns individuals relating to one another within an organization and
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groups interacting with other groups and the environment they live in. and it is political process because it involves the dynamics of influencing, governing and empowering people. Socio-political development should embrace people's institutions, their ideology, organization and values. Ideology: It is a set of ideas, theories, doctrines and beliefs that are formulated to attain a vision for the individual and the society. It addresses the mind of a person or a group or a community. Organization: Organization is the physical grouping of individuals for general or specific purposes. It is a group of human beings which may either have a collective or an individual person orientation 1. 2. 3. elements of an organization: structures processes controls

- organizational structures are the formal and informal means of arranging people for the purpose of achieving certain tasks. - Organizational processes are methodologies used and behavioral patterns manifested as groups performs their tasks and relate to one another - Organizational controls are the motivational, and preventive measures taken to encourage of discourage individual. Controls could be seen as mechanisms of organizational structures and processes. They are designed to ensure that organizational goals are met, processes are followed and groups within the organization are motivated to perform at their peak capacity. To summarize, structures, processes and controls are the critical elements of organizational development. Values: Societies or individuals possess deep-rooted convictions about how they and other people should behave. They set up standards or norms of behavior that are supposed to guide the actuation ( ) of people.

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Values can come from long-standing traditional practices, customs and more.

Strategic Management (reading 2) Strategic management is a process which begins with the searching of "what are we all about". It ends with answers that may be time bound and situation based but they nevertheless provide action plans to establish the development agency's identity. A development agency addresses strategic management at three fronts: The environment at large The internal front (what mechanisms the agency uses for dealing with its own operations) The strategy adopted for intervening in the development process of a client system. Management at different levels in the agency associate themselves with different fronts: Top management (board of directors) is concerned of environmental forces Middle management is concerned with the internal dynamics or operational matters of the agency. First line managers (supervisors, field officers) have a primary concern : the agency's clients. To get the job, the agency should be guided by a mission statement of purpose that justifies the reason of its being. It reflects a philosophy of looking at how things are and how they should be. Example of mission statement of the Philippine Business for Social Progress (private volunteer organization supported by the business community) is stated as: " To improve the quality of like of the Fiilipino poor" Since strategic management is fundamentally a human process, the manner by which it is carried out depends very much on the personalities of the managers in the organization.

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Strategic Management approaches: The Rational Approach The Adaptive Approach The Ideological Approach The Creative Approach

- The rational approach: It uses the science of correct reasoning. It relies heavily on analyzing causes and their effects to enable the prediction of certain effects. It evaluates existing mission statements, objectives and strategies, it then examines the economic, social, political, cultural, technological and even religious trends. From the environmental analysis the organization identifies opportunities for development and threats that tend to reverse growth. After analyzing the environment, the organization could create a list of options such as: expand area coverage intensify existing operations in the same area. integrate operations. diversify into other services or products acquire or take over other organizations. consolidate operations setup contingency mechanisms or action plans choose a product or service not being provided well by other organizations. 9. establish networks rather than do it a lone. 10.subcontract activities to others 11.set up "anchor" projects that provide the inputs to and absorb the output of a great number of smaller organizations and individuals. 12. retrench ( ) 13.merge with other organization 14.withdraw altogether. The organization makes a choice of strategies to pursue through a rational thought process. Strategy is formulation: once the choice is made, the organization gears for strategy implementation where it defines specific goals and policies and allocates resources to accomplish the goals set.
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1. 2. 3. 4. 5. 6. 7. 8.

- The adaptive approach: For many organizations strategy-making is not a formal procedure but one that emanates from the behavioral responses of managers to situation. These organizations do not systematically decipher trends and scan the environment. Their choices are built on healthy experiences in the past. Strategy formulation becomes a function of the action reaction chain. The organization acts, the environment reacts and the organization counter-react. In other words, the organization adapts to the dynamism of the situation at hand. The directional and structural dimensions of the adaptive approach are as follows: a) building block concept (the organization builds upon its basic foundational activities and expands sideways and upwards. b) Spokes concept (the organization maintains a central hub with spokes extending outwards to activities that revolve like satellites around the nucleus area or activity. c) Molecular compound concept (the organization connects to subsidiary activities which in turn are connected to sub-subsidiary undertakings) d) Amoeba concept (the organization movements respond to push and pull forces exerted by its immediate environment) e) Concentric circles concept (the organization expands outwards to its immediate geographic neighbors) f) Leapfrong concept (the organization leaps from on activity to another depending on the attractiveness of the activities) g) Chess game concept (the organization positions its chess pieces to build up a devastating strike force, provide backup troops , clear escape routes, and set up solid defense line) h) Polevault concept (the organization makes a quantum leap to level of activity not previously attained due to some extraordinary circumstances) i) Nitching concept (the organization seeks a place in the sun not crowded by other entities. Nitching for a development can mean targeting a particular client not adequately served. - The ideological approach: Certain organization exist because of the theories, missions, doctrine and beliefs that they espouse. the change agents often come from within and
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they are called rebels or reformists. They could proof effective when they are able to paint an idealized vision which found emotional appeal among the members of their society. Ideologically motivated organizations often have strong central committees to preserve their doctrines and culture. However, they also tend to scatter about in smaller sub-central committees to stress group solidarity, defend themselves from aggressors. In these organizations, strategies are focused on several formulae: a) evangelization or spreading the word in spoken or written form. b) Strength in numbers is another fundamental tenet. In numbers the organization gains more supporters to their cause. The organization may start as a small group but as it grows it begins to have political, economic and even military power. c) Discipline is important. This goes without saying because ideologies disintegrate with very liberal ways and lack of enforcing mechanism. d) Protective isolation or environmental conservation are often used strategies to retain the original thought and prevent external influences from polluting the organization. e) Low profile when weak, high visibility when gaining strength and absolute control when finally strong is a common strategy of ideological organizations. The first stage is to forestall precaution, the second to win followers and the third to minimize opposition. - The creative approach: The creative strategist is one who seeks better ways to do things because he is never contented with the mediocre status quo. He takes the less traveled routes, not necessarily the riskier one but definitely the more unfamiliar terrain. There are two crucial components of the creative strategy approach: Innovation Making that innovation work. Condition necessary for the creative approach to thrive:

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First: creativity must be planted in mind and the mind should be fertile. Mental fertility depends on the nutrients fed that mind. These nutrients are: - openness or ability to absorb new things. - Knowledge or the brains accumulation of facts, data, and theories. - Skills or the capability to process knowledge by analyzing, comparing and contrasting. - Imagination. Second: creativity flourishes in a conducive environment. Third: Creativity sprouts hard best when the creator works and prepares

Techniques for creation eliciting: a) brainstorming it is the generation of a huge number of ideas from a group of people within a very limited time. It goes through four stages: state the problem ask for restatement of the problem the actual braining storming (generation of ideas) evaluation of the ideas produced

b) systematized directed induction steps involved: the facilitator of the exercise sits down with management to set objectives. They desist from accentuating problem area that may be expressed by management during the consultation

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 Management selects people from the organization who may have something to do with the objectives set. A warm-up session begins Yellow slips are passed and participants are asked to state their work-related problems. Then pink slips are passed and participants are asked to write how the problems could be solved. The evaluation of the problems and their solutions are given to the consultant. c) Lateral thinking: Lateral think was introduce by Edward de Bono who identified four types of thinking: 1. 2. 3. 4. Natural Logical Mathematical Lateral

1. De Bono claims that natural thinking moves along from one end to anther of the though spectrum with no sense of proportion and with great subjective bias. 2. logical thinking controls the flow of natural thinking by censoring though paths which do not conform with rational criteria. 3. mathematical thinking uses symbols and rules to put order. 4. lateral thinking tries to overcome the limitations of the three previous types of thinking by encouraging new ways of looking at things. De Bono claims that logical and mathematical thinking can solve problems which only require the processing of available data. Lateral thinking can be applied to "no problem" situation" where the status quo is accepted. d) Oblique thinking It is close to lateral thinking and Theodore Cheney claims that primitive man hooked his ideas more to emotions rather to words. He promotes

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silence in this type of thinking. It uses techniques as distraction, vagueness and irrelevance.

e) Synectics This is a problem stating problem solving technique carried out by a small group who are trained for this purpose. In addition to the other techniques elements, this technique's session involves the person owning the problem and seek the help of the group to discover the solutions. It has nine phases which are 1. the problem is stated as given. 2. the group becomes familiar with the problem and dissects all its elements. 3. the group arrives at a new understanding of the problem. 4. analogies are developed to open up new avenues of thought. 5. the familiar problem is made strange. 6. the group attains a conducive psychological stat for creative thinking. 7. the most pertinent analogy is compared to the problem as understood in the third phase 8. the group gets a technical insight into the problem through the use of the chosen analogy. If no satisfaction is found the group goes back to phase 4. 9. the solution is found.

Strategic planning process Effective strategists probably combine all the approaches to strategic management. The different strategic approaches could be divided in a systematic manner into five steps: analysis or the identification of problems in the organization or environment. Creativity or the generation and combination of ideas. Objectives are set. Judgment or assembling and evaluation of strategic options.
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 Planning or the detailing of the strategy into its action components Implementation or the execution and monitoring of results. The Management of Change (reading 3) Change starts in the mind or in the environment. In the former, change stems from a new perception of things. In the latter, there is a physical rearrangement of reality that requires reaction and new behavioral response. New perceptions arouse the need for change, while changes in reality necessitate change. Attitude towards change could be positive or negative or neutral "waitand-see attitude". Negative attitude can lead to compliance, especially if he order emanates from a very powerful source. Positive attitude still have to be activated by trigger mechanisms (like a directive, an incentive). Negative attitude can be overcome by power sources or by extreme necessity. This is where leadership and organizational systems and control come in. they are the important ingredients that translate attitudes into actions. Technical and social changes: The technical changes could be introduced to the communities through the powerful tribal system which is already present among the people. Social change is introduce to communities who are already familiar with the technical aspect of the project (cotton growing for example). The introducer has to build the moral and social foundation through leadership training and value formation seminars. He could negotiate with banks so as to give farmers better financial packages and a system that motivate higher repayment rates. In this way the social relationships of the farmers with their fellow farmers, the banks and the textile buyers would improve through the organizational restructuring, system designing and procedural changes.

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Ideology, values and organizational tradition: The most difficult situation to change is when the ideology and value systems of an organization are too strong. The change agent can succeed only if he breaks the weakest link in the chain or destroy the strongest link. The more cohesive the group in their ideology and values, the harder it is for change to happen. (examples religious, communists and capitalists groups). Way of breaking through: convince the leadership to embrace the new vision destroy and replace the controlling power by charisma or by force. Erode the people's confidence in their leadership. Incite the followers to rebel by exposing the weaknesses and negative effects of the status quo.

How does change modify the value system: - To get involved in a process that try to change the rules of the game by establishing new standards of behavior. - Expose the group to other behavioral patterns outside their own societies. The organizations profile is another determinant of change. Open organization, societies and urban areas are exposed to change more than the others. Change also happens if the organization is heterogeneous and not tightly structured

Strategies for managing change: Ways of introducing and managing change: 1. 2. 3. 4. get to know the subject of change power plays empowerment strategies negotiating strategies

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 get to know the subject of change: It has been said that "never write a letter to your superior unless you know the response". An action produces a reaction, and if the chances of the negative reaction are high, the action should never take place. power plays: a quick and direct way of introducing change is to use your power to borrow power from another source. Power could be defined as the ability to make people comply because of your control or authority over some critical aspects of their lives. Power is used for change in two ways: - change the people's perception - change the environment and the rules governing it. empowerment strategies: In contrast to power plays where the leader or the organizational authority hold the sway, empowerment strategies are designed to transfer power to the change subject so that they can effect their own changes. Empowerment strategies ingredients to success: - the change subject must be given or taught to demand access to resources. - They must control the resources and determine their usage. - For all that to happen, the change subject should build up its capacity to seek opportunities and use the natural resources. This could done through: a) external alliance and participatory process b) education and training c) collective assertion and unity of purpose negotiating strategies

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In cases where the change process can only be achieved through a give and take of two or more forces, the negotiating and arbitration strategies become useful. The change agent can play the role of the negotiator. Choice of change strategy: The chance agent should carefully evaluate his strategic options for introducing change. This choice must be made only upon a thorough analysis of the situation in order to pinpoint what needs to be changed. The change agent must try to understand the situation from the change subject's perspective and not from his own. The change should be explained from the subjects' point of view. The change agent should examine the conditions that might facilitate change. When the agent himself does not have acceptance, a credible go- between can be employed. The idea is to open the heart and mind of the change subjects through adequate groundwork In making the actual choice of the change strategy to be adopted, the change agent must take the adaptive approach. Power plays can be used when the leadership or power bloc is strong. The problem with power plays is that there has to be a constant pressure applied to make the change subject continuously comply. Empowerment strategies transfer the burden of change to the change subjects. They are quite effective when the total commitment of the change subject is mandatory. . the agent can use education and training when the subjects deficiency lies in ignorance, fear of failure and lack of confidence. Getting to know the change subject is important in whatever circumstance. The only backlash is the overconfidence. Negotiating strategies should be used when one is dealing with two or more opposing forces that can be brought to terms through a process of giving and taking and finding areas of compromise.

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 One has to adopt strategies that are suitable for the people and the environment. There is on one correct strategy. The choice depends on the circumstances, and therefore, flexibility is the element of success.

Monitoring change: Responses to change must be monitored closely less unwanted effects negate the relationship between change agent and change subjects. Fallback positions must established along with strategic shifts should unexpectedly erupt. Feedback mechanisms are important for the monitoring of change. High level of expectations leads to high level of disappointment in case of failure.

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Chapter 16: Strategic Aspects of Management Introduction: Planning is a process that takes place at every level of the organization. Mintzberg is unhappy with the machine view of planning, especially in relation to strategy making, and argues that organizations can consider their future without engaging in a formal planning process. He thinks that they can engage in planning procedures. He sees planning as servicing the strategy formulation process by contributing both to the inputs and outputs of the strategy itself. Most managers are involved in planning at an operational level.

Distinction between strategic and operational levels of planning: Strategic planning: - Prime accountability shouldered by company board / top management. - Prime focus is company mission, long term goals, effectiveness. - Major concerns are competitive position, company values, business success and establishing appropriate financial controls. - Time scale is up to 10 years. Operational planning: - Prime accountability is shouldered by senior/middle management - Prime focus is achieving targets, optimizing resources and efficiency.
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- Major concerns are budgets, sales, production, harnessing technology etc. - Time scale is 1- 2 years. strategic management is a complex process, its ultimate goal is to optimize the enterprise 's competitiveness and achieve the best alliance between people. The strategic dimension of management has grown in importance due to the increasing complexity of modern business organization. Other contributing factors include: - increase customer expectations for quality - the rapid advance of micro-electronics - the increased ability of firms to compete with each other due to the benefits of new technology. - The entry into markets of new low-cost manufacturing firms from Asia. - The greater concern among nations for protecting the natural environment - A greater emphasis on consumer rights - The improvement of communication systems all over the world. Theories about strategy: Alfred D. Chandler defined strategy as:" the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals" He believes that company structure follows its strategy, and therefore he thinks that a growing organization passes through a number of phases of development as follows: - single-location, single-product, single-business. - Geographic expansion - Diversification (introducing new products) Kenneth Andrew combines goal-setting with the policies and plans needed to achieve the goals. He distinguishes between corporate strategy and business strategy.

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 H. I. Ansoff prefers to separate goals from strategy . he envisages a close relationship between the two in which an objective (end) is followed by a strategy (means) To realize a strategy, Ansoff argues that three types of decisions are to be made: - strategic decision - administrative decision - operating decision Another definition of strategy by Ansoff are: 1. 2. 3. a systematic approach for managing change which consists of: positioning of the firm through strategy and capability planning; real-time strategic response through issue management; systematic management of resistance during strategic implementation.

Competitive advantage: M. E. Porter proposed a different approach to development strategy. Porter is concerned with the impact of the external environment on the firm. Porter's five forces that influence the firm's ability to compete: 1. 2. 3. 4. 5. Threats of new entrants threats rivalry among current competitors bargaining power of buyers threat of substitute products bargaining power of suppliers.

Porter's forces could be utilized by firms in their strategy formulation while doing their SWOT analysis. Porter's barriers to market entry: 1. newcomers have to come in on a large scale or accept cost disadvantage 2. product differentiation (break existing brand loyalty) 3. capital requirements 4. switching cost (costs that help the firm to switch to new markets)
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5. lack of access to distribution channels 6. cost disadvantages regardless of size 7. government policy

Other theories of strategy: Difference between effectiveness and efficiency: effectiveness: It refers to the extent to which an organization achieves what it has set out to achieve (actual vs desired output) efficiency: It refers to the ratio between outputs and inputs. The four components of strategy as stated by Hofer and Schendel: scope or domain (the extent of interaction with the environment) resource deployments competitive advantage synergy (the total effect sought through strategic decisions "expressed as 2 + 2 = 5)

the five tasks of strategic management as set by Thompson and Strickland: 1. 2. 3. 4. 5. define the overall business mission (principal goal) breakdown the mission statement into specific objectives. crafting of the strategy implement the strategy evaluate, review and adjust

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chapter 17 objectives, policies and organizational ethics introduction: the objectives of a business organization will be based around concepts such as profitability, customer service, shareholder satisfaction and employee motivation. The objectives of a public service are likely to focus on the efficient delivery of a service (health or education) to the community. The clarification and definition of key objectives is vital for any organization since these are what provide it with a sense of direction and mission. It is probably best to think of strategic management as a process which enables an organization to identify the following: its principal objectives. Its current strength and weaknesses Its opportunities and threats The base of its long-term plans its short-term plans its key performance standards it is seeking to achieve its rules of conduct/ethnical principles

corporate planning is not the same as long-term planning which focuses on one part of an organization at a time. The corporate planning looks at the future selectively.

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 A major part of corporate planning is the business of setting corporate objectives which are usually two types: - objectives that set out the organization's overall purpose - objective that set out the organization's long-term strategic aims if the strategic objectives are highly specific and quantifiable, then they are not strategic objective, but they are operational or tactical objectives. Strategic objectives are stated in such a way that is possible to see whether they have been achieved or not. Strategic objectives are normally set for all the major functions of the organization. Strategic objectives will be influenced strongly by the views of the directors of the organization Policies: once an organization has established its corporate objectives, it can begin to say in what manner it intends these to be achieved. Policies are not the same as objectives or plans, even though they are frequently confused with them. Objectives stat an aim or a goal whereas plans provide a framework within which action can take place to attain the objective. A major factor affecting policy is the attitude of the organization's owners as well as that of the society in which it operates. National laws and local customs all play a part in determining an organization's policies. Ethics: ethical codes go further than most policy statements in that they are focused on matters of right and wrong.

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 Ethics is defined as " a set of moral principles or values, used by organizations to steer the conduct both of the organization itself and its employees, in all their business activities, both internal and in relation to the outside world" Ethics is applied collectively and individually to the organization's members and affects its internal affairs as well as those with its external stakeholders. An example of an ethical code can be found in the official principles of the movement of the international red cross/crescent organizations. The principles include the following: impartiality neutrality voluntary service universality

steps of implementing ethical codes: 1. Integrate the code into the company's value-system. 2. ensure that the code is endorsed by the top management. 3. circulate the code to all employees. 4. advise employees on how to deal with a potentially difficult ethical choice 5. give all staff the chance to respond to the content of the code. 6. introduce a requirement that managers state that they understand and apply the code in practice. 7. introduce a procedure for regular reviews of the code. 8. provide training in relevant issues if they arise from implementation of the code. 9. translate code into local languages. 10.distribute copies of the code to suppliers.

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11.produce the code in the company's annual report. 12.consider making adherence to the code a matter of contract for employees.

Social responsibility: social responsibility implies playing more than just an economic role in society. In response to the pressure to be socially responsible, many firms have developed their own social or community programs. Ways of encouraging commercial enterprises to develop a sense of social responsibility: 1. they can be forced by law; 2. they can be persuaded voluntarily. Types of activities support by UK firms: work creation schemes. Welfare programmes Support for educational institutions Support for the arts Contributions to overseas aid.

Business plans: business planning follows on from the setting of the organization's key objectives and polices plans essentially state how the organization intends to move forward over a given period. Questions to be answered before choosing a strategy: - what is the organization's current performance in terms of strengths and weaknesses?

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- What factors in the external environment might affect the organization's proposed plans for the future? SWOT analysis: S stands for "strength" W stands for "weakness" O stands for "opportunities" T stands for " Threats"

Typical corporate strategies could be: expand into new markets with existing products or services continue to maintain market share in existing markets with existing products. Add to product base or range of services by acquisition of a competitor Seek long-term, low-interest loans from banks Reorganize company into separate profit centers. Measures of performance: output per employee percentage utilization of machines percentage increase in market share costs as percentage of sales

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