INTRODUCTION TO

STRATEGIC
MANAGEMENT
Chapter 1
Strategic Analysis
And Decision-
Making
OBJECTIVES
At the end of this unit, you should be able to:
• define strategic management
• Identify each of the components of the strategic management process
and its corresponding outcome
• Identify strategic model
Strategic Management
• It is a continuous process of strategy creation
• It involves strategic processes like strategic
analysis and decision-making, strategy
formulation and implementation, and strategy
control with the primary objects of achieving
and maintaining better alignment of corporate
policies, priorities and success.
Strategic analysis

• Consists of a systematic evaluation of

variables currently existing In the external
and internal environments
Strategic Decision-making

•It brings people together the right

resources for the right markets at the
right time.
Strategy formulation

•It is designing strategies on the

business and corporate levels
Strategy Implementation

•It is employing theses crafted

strategies to achieve organizational
set goals and objectives
Strategic Control

Is the application of an appropriate

monitoring and feedback system
 Strategic Analysis Strategic Intelligence

Strategic Decision-Making Strategic Thinking

Strategy Formulation Organizational Competitiveness

Strategy Implementation Comparative Advantage

Strategic Control Strategic Performance

THE STRATEGIC MANAGEMENT PROCESS

Strategic Intelligence
• It is the capability of an organization to possess
relevant and related knowledge, abilities,
foresight, and systems thinking, such that it is
able to assess its own strengths and
vulnerabilities, pressing challenges confronting
the organization, as well as the trends and
opportunities existing in the environment.
Strategic thinking

It is the cognitive process of

competently and analytical
weighing factors and arriving at
critical decisions in the context of
the current milieu of which an
organization is party.
Organizational Competitiveness

• Pertains to the ability of any

business/company to utilize its resources
optimally and sustainably for maximum
performance and productivity
Comparative Advantage

Refers to the ability of an organization to

produce a particular good or service at lower
marginal and opportunity costs than its
competitors
Strategic Performance
• It is the accomplishment of a high level of productivity that is
characterized by efficiency in the context of lean and quantifiable
management.
 ORGANIZATIONAL STRATEGIC ORGANIZATIONAL
OUTPUT MANAGEMENT SUCCESS
PROCESS
• Strategic
• Management/ • Strategic analysis intelligence
Employees • Strategic • Strategic thinking
• Financial • Organizational
decision-making
Resources • Strategy competitiveness
• Facilities/ • Comparative
formulation
Equipment • Strategy advantage
• Infrastructures • Strategic
implementation
• Processes • Strategic control performance

STRATEGIC MANAGEMENT MODEL

STRATEGIC MANAGEMENT MODEL

• Shows the relationship between and among

the input, process, and output.
STRATEGIC MANAGEMENT MODEL

When these specific process are executed

and managed creatively, distinctly, and
strategically, the organization can ultimately
achieve organizational success.
STRATEGIC MANAGEMENT MODEL

In particular, when the output are exhibited

in the strategic intelligence acquired,
strategic thinking mode developed,
organizational competitiveness, comparative
advantage, and strategic performance
attained by the organization
Strategic planning

• It is a continuous, repetitive, and

competitive process of setting the goals and
objectives that an organization aims to
attain
Strategic planning

• To achieve them, and assessing the best way

to realize them in the context of the
prevailing environment while measuring
performance through set standards, and
periodically but continuously conducting
reassessments.
TYPES OF
STRATEGIC
PLANS
Medium/long-range plan
• Prepared in the context of the coming 3-5 or
10 more years.
• It describes the major factors or forces that
affect the organization’s long-term
objectives, strategies, and resources
required.
Annual/yearly plan
• Short term;
• Succinctly describes the organization’s
present situation, its goals and objectives,
strategies, monitoring mechanisms, and the
budget for the year ahead.
Need for
strategic
planning
Why is there a need for
strategic planning?
• To survive, organizations need to plan
carefully their strategic approaches.
• Therefore, strategic plans have to be
prepared purposefully for effective and
efficient implementation, thus, leading to
the attainment of their set objectives.
• The benefits of designing and putting into
effect a strategic plan cannot be
overemphasized
Strengths and
Limitations of
Strategic
Planning
Strategic planning
• Defines an organization’s mission, vision, and set
objectives.
• It provides organizations the opportunity to
assess the milieu and specify strategies to
achieve their goals
• It helps organizations to stay focused; it makes
things happen.
ORGANIZATIONAL
VISION
 VISION

GOALS MISSION

RELATIONSHIP OF THE VISION-MISSION-GOALS OF AN ORGANIAZATION

ORGANIZATIONAL VISION
• An inspirational statement of what the
organization hopes to achieve at some
point in the future.
• It is the image of what an organization
desires to achieve.
ORGANIZATIONAL VISION
• Having a strong sense of vision can
move the organization to be hat it
wants to be.
• Like an unseen force, the
organizational vision binds the
company and its employees together.
Example of a vision statement:
“an educational institution ablaze with the Spirit
of Excellence. This is the vision statement of the
educational institution, College of the Holy Spirit
Manila.

The statement energizes the administrators,

faculty, students, and staff.
It brings singleness in their desire and coherence
in their efforts.
MISSION STATEMENT
• It differs from the organizational vision.
It is the current purpose of an
organization; it answers what the
organization does, for whom it is done,
and how it does what is does.
Mission Statement example:
“we build, through Christian and holistic
formation, new generations of responsible
citizens who are agents of transformation”

Here, what the organization does is “to

build”; it does this “for new generations of
responsible citizens” and how it does what it
does is “through Christian an holistic form”
Mission Statement example:
They are likewise short and easy to
remember.
It gives employees a better perspective
on how their tasks contribute to the
attainment of organizational goals.
Organizational Goals and Objectives
• To operationalize the mission statement,
organizational goals and objectives are
defined.
• All organizations have set goals
• These are referred to as organizational
goals
ORGANIZATIONAL GOALS
it is pursue to make the specified
strategies succeed.
• They vary and are essentially
dependent on their respective
purpose and direction.
Goals
• They are micro, encompassing in
perspective and prospective in nature.
• It represent the overall vision of an
organization
Goals have the
following
properties:
 • They neatly converge
1.Goals provide toward the purpose of
organizations any firm, this,
focus and streamlining all
direction unnecessary and
redundant
considerations
 • Because goals have to
2. Goals move be attained,
organizations to organizations are
actions motivated to function
and perform toward
their vision
3. Goals
develop in • Thus, organizations
organizations continue to persevere
the trait of until they achieve
persistence their desired success.
Objectives
• Need to e clearly defined and
formulated, carefully chosen, specific,
and definite
• It may be immediate or short-term
• They need to be prioritized into a
hierarchy of objectives
• It needs to be realistic and attainable
8 Major
Classifications of
Strategic Objectives
1.Market standing (desired share of
the current and new market)
2.Innovation (development of new
goods, services, and of skills and
methods required)
3.Human Resources (selection and
development of employees)
4. Financial Resources (identification
of sources of capital and their
uses)
5. Physical Resources (equipment
and facilitates and their uses)
6. Productivity (efficient use of the
resources relative to output)
7. Social Responsibility (awareness
and responsiveness to the effects
on the community of the
stakeholders)
8. Profit Requirements (achievement
of measureable financial well-
being and growth)
VALUE AND
VALUE SYSTEM
VALUE
• these are inherent roots of motivation
within an individual, an organization, a
community, or a nation.

• Values are exhibited in to different ways,

namely, beliefs and attitudes.
Beliefs - are Attitudes - are
cognitive characteristically
manifestations behavioral

They are fundamental and intricately

integrated in the particular
organization’s value system.
VALUE SYSTEM
• It is characteristically broader in scope
• Aside from values, it includes other
variables such as the organization’s
dreams, aspirations, interests,
expectations, philosophies, as well as
leadership and management styles and
ethical practices.
VALUE SYSTEM
• It indicates the hierarchy of values
ranked by organizations
• They are distinct, they differ from one
organization to another
VALUE SYSTEM
• either why one organization may be
perceived as socially and community-
active, while another is business-
oriented.

• The importance of these value qualities and

value systems for organizations cannot be
underestimated
ORGANIZATIONAL
CLIMATE AND
CULTURE
ORGANIZATIONAL CLIMATE AND
CULTURE
• The concepts of organizational
climate and culture are
interrelated, interdependent, and
sequential
Organizational Climate
• It is defined as the regular and
repetitive patterns od attitudes and
behavior exhibited by employees of an
organization.
Organizational Climate
• It manifests whether its employees are
happy, hardworking, and motivated, or
otherwise whether good interpersonal
relationships exist between and among
different levels of management.
Organizational Culture
It denotes a wide range of social
phenomena, including an organization’s
customary dress, language, behavior,
beliefs, values, symbol of status and
authority, ceremonies and rituals