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Chapter 2: Strategic Planning (Definition of Strategic Management…
Chapter 2: Strategic Planning
Definition of Strategic Management
Conscious selection
of policies,
development of capacity
and
interpretation of the environment
to focus on organizational efforts towards achieving of preset objectives
eg: reduction in crime rates
As a matching process in which variables of
strategies, capability, environment
are matched to manage change through strategy
Capability
SWOT analysis test strategic viability
SW highlight capabilities
OT highlight survival
Environment
an assessment of organization's present, current, and future environment
demand forecast - population, economic growth
future analysis - likely scenarios
Features of strategic management
Definition of the organizational process
within a mission statement
Identification of objectives
in a vision statement
Adoption of time frame
(planning horizon) in which objectives to be achieved
systematic analysis
of the current circumstances (capabilities)
Assessment of surrounding environment
both now and within planning horizon
selection of strategy by a future date, comparing various alternatives
integration of efforts around strategy
creation of control and evaluation system for continuous feedback
Objectives
part of the military thinking
distinction between strategic objectives and tactical objective
PA slower to adopt SM due to higher concern about functions and responsibilities rather objectives
causes of changes from responsibilities and function to objectives:
popularization of management by objectives by Peter Drucker (measurable goals to be achieved over a period)
more rapid pace of change in communities
pervasiveness of 'strama' in the private sector
Features of objectives
succinct
, limited to org's sphere of influence
directional
, specific future states to be achieved
time limited
, for each objectives to be achieved
measurable
, so achievement/ progress can be evaluated
Planning horizon
some constraints for PA to establish time horizons
political nature due to election, public opinion
budgeting process due to political leverage
Stakeholders
Role as advocates, sponsors, partners, agents of change
particular customers
private firms who contract to help do the work of public agencies
other govt units that may involves in the frequent intergovernmental provisions of service
interest groups (community) who have a stake in what agencies do
policy making bodies that define mission, provide oversight of public agencies
Benefit of Strategic Management
Proactive in shaping firm's future
initiate and influence firm's activities
formulate better strategies
systematic, logical, rational
Allows for identification, prioritization and exploitation of opportunities
objective view of management problems
represent a framework for improved coordination and control of activities
minimized the effects of adverse conditions and changes
provide basis for clarifying individual responsibilities
Financial benefits
improvement in sales
higher profitability
higher productivity
Non-financial benefits
improved understanding of competitors' strategies
enhanced awareness of threats
reduced resistance to change
enhance problem-prevention capabilities
Difference between
Strategic Management From Other
Types of Management
Strategic management
interdisciplinary, not focus on specific areas only (human resources/ operation
emphasis on the interactions of org with external environment
emphasis on coordination of org's various functional areas, internal focus
concern the choice of future direction (future focus)
Reasons for no
strategic planning
Waste of time
Too expensive
Laziness
Fear of failure
Fear of the unknown
Drawbacks in strategic planning
to gain control on decisions and resources
to satisfy accreditation and regulatory requirements
failing to communicate the plan to employees, do the work in the dark
many intuitive plan vs formal plan
1. Introduction
strategy in business from stable to rapidly changing, competitive environment
gives a framework to develop abilities to cope with changes, uncertain future by defining procedures to accomplish goals
Factors
:
acceleration from within firms
acceleration application of S & T to the process of management
Strategy involves
:
environmental, situation analysis
utilization of resources to achieve goals
2. Concepts of SM
1. Sun Tzu Art of War
Force against enemy weak points, by passing their strong points
seek weakness and exploit
four elements of Sun Tzu which are
people, environment, desireability of strategy, strength of management
View objective to strengthen the state by acquire enemy resources
war as possible means but not the ideal one
13 books on competitive strategies including:
planning
competitive actions
competitive strategies
positioning
opportunity and timing
control
2. Clausewitz Model of Strategy
4 elements
Theory
- explanation rather than prescribe
Methods
- means to carry the business
Principles
- universal but not absolute
Rules
- rest on the truth but allows exception
Seek out enemy's strong points and attack directly- fortress, armies
Public morale
depends on the victories achieved
emphasized on boldness
emphasis on aggression, martial spirit, destruction of enemy
resonate emotionally with the audience
Strategy vs Tactics
Strategy
defined as employment, management of resources to gain objectives
long term
as the answer of what for (purpose, objective)
what are you going to do to achieve your vision
Tactics
the use of a subset of the resources to gain a part of the overall objectives
short-term
as the answer to the question "how" (process, actions)
how to achieve your strategy and when
Strategic Management Process
Strategy formulation
vision and mission
External analysis
Internal analysis
Long-term Objectives
Alternative Strategies
Strategy Selection
Strategy implementation
annual objectives
policies
employee motivation
resource allocation
Strategy Evaluation
Internal Review
External Review
Performance measurement
Taking corrective actions