This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Chapter 1Chapter 1
Introduction: A Model of Introduction: A Model of Strategic ManagementStrategic Management
Chapter 1Chapter 1
Introduction: A Model of Introduction: A Model of Strategic ManagementStrategic Management
All rights reserved. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt Brace & Company, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777.
Competitive Competitive Landscape of the Landscape of the 1990s1990s
Competitive Competitive Landscape of the Landscape of the 1990s1990s
Rapid Rate of Change Consumer demographics Tastes and preferences Nature of products and services Technologies “High-velocity environments,” such as PCs.
• Managers must react quickly to changes in industry environments.
– IBM and Sears examples of companies who did not react fast enough.
Strategy: A Pattern in Strategy: A Pattern in a Stream of Decisionsa Stream of DecisionsStrategy: A Pattern in Strategy: A Pattern in a Stream of Decisionsa Stream of Decisions
Must understand managerial decision making and how managers’ decisions affect the performance of firms and businesses. Strategies emerge over time as decisions
accumulate to form coherent recognizable patterns of action.
• Different from conventional “grand plan” view.– Strategies emerge after careful analyses of competitive
Exhibit 1.3:Exhibit 1.3: Strategy Strategy Formulation as a Product of Formulation as a Product of Intended & Emergent Intended & Emergent ProcessesProcesses
Exhibit 1.3:Exhibit 1.3: Strategy Strategy Formulation as a Product of Formulation as a Product of Intended & Emergent Intended & Emergent ProcessesProcesses
Exhibit 1.4 (A):Exhibit 1.4 (A): Strategy Strategy Formulation Activities at Formulation Activities at General Mills’ Cereal General Mills’ Cereal BusinessBusiness
Exhibit 1.4 (A):Exhibit 1.4 (A): Strategy Strategy Formulation Activities at Formulation Activities at General Mills’ Cereal General Mills’ Cereal BusinessBusiness
Exhibit 1.4 (B):Exhibit 1.4 (B): Strategy Strategy Formulation Activities at Formulation Activities at General Mills’ Cereal BusinessGeneral Mills’ Cereal Business
Exhibit 1.4 (B):Exhibit 1.4 (B): Strategy Strategy Formulation Activities at Formulation Activities at General Mills’ Cereal BusinessGeneral Mills’ Cereal Business
What Makes Strategic What Makes Strategic Management Management ““Strategic?”Strategic?”
What Makes Strategic What Makes Strategic Management Management ““Strategic?”Strategic?”
Strategic decisions have the potential to affect the health or direction of a business in a profound way: Strategic decisions are important. Strategic decisions involve significant reallocations
of resources. Strategic decisions tend to involve more than one
functional department. Strategic decisions are not tactical decisions, which
A Model of Strategic A Model of Strategic Management Management (cont.)(cont.)
A Model of Strategic A Model of Strategic Management Management (cont.)(cont.)
Types of mental models and decisions (cont.): Beliefs about the appropriate scale and scope of the
business enterprise, beliefs about how firms’ businesses are related, and beliefs about how diversification should be managed and how these mental models influence decisions about corporate strategy (chapter 9).
Beliefs about how to organize and how these mental models influence decisions about organizational structure (chapter 10).
Exhibit 1.6:Exhibit 1.6: Model of Model of Strategic ManagementStrategic ManagementExhibit 1.6:Exhibit 1.6: Model of Model of Strategic ManagementStrategic Management
Feedbackreinforces or
suggests changes
in managers'
mental models
Managers' Mental Models
+ Industry environments + How to compete + Appropriate size/diversity, how businesses are related, how diversification should be managed + How to organize
Three Key Themes for Three Key Themes for this Book this Book (cont.)(cont.)
Three Key Themes for Three Key Themes for this Book this Book (cont.)(cont.)
Importance of organizational learning. As the business world becomes increasingly
knowledge-intensive, the ability to learn, store, retrieve, and exploit new knowledge and information will become a key source of sustained competitive advantage.
Model of strategic management in Exhibits 1.6 and 1.7 explains many business situations of today, including the erratic performance of two very large American companies who failed to keep pace with changing business environments: General Motors
• Market share dropped from 50+% in 1980 to just over 30% by end of 1980s.
– GM’s cars became dated.– It fell behind technologically and lost its manufacturing
Key Points Introduced Key Points Introduced in Chapter 1 in Chapter 1 (cont.)(cont.)
Key Points Introduced Key Points Introduced in Chapter 1 in Chapter 1 (cont.)(cont.)
This book emphasizes critical role of general managers and strategic thinking in understanding industry environments, defining or positioning businesses in their competitive arenas, developing and maintaining capabilities, and developing organizational structures. In contrast, most textbooks on strategic
management stress importance of industry structure as primary influence on firm performance.
Key Points Introduced Key Points Introduced in Chapter 1 in Chapter 1 (cont.)(cont.)
Key Points Introduced Key Points Introduced in Chapter 1 in Chapter 1 (cont.)(cont.)
Model of strategic management (cont.) How businesses should compete and how those
decisions influence business strategy. Appropriate scale and scope of their firms. How their firms’ businesses are related. How diversification should be managed and how
those beliefs influence corporate strategic decisions. How to organize and how those beliefs influence