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Topic 8 - Strategy Generation Selection (Part 2) (Principles of Good …
Topic 8 - Strategy Generation
Selection (Part 2)
Quantitative Strategic
Planning (QSPM)
Indicate which alternative strategies are the best
Use input from Stage 1 and Stage 2 to decide objectively among alternative strategies
Steps
Make a list of key external opportunity and threats and internal strengths and weaknesses in left column
Assign weighs to each key external and internal factor
Examine Stage 2, and identify alternative strategies that organisation should consider implementing
Determine the Attractiveness Scores (AS)
Compute total of AS
Compute sum total of AS
Positive
Features
Sets of strategies can be examined simultaneously
Require strategists to integrate external and internal factor into decision process
Can be adapted for use by small and large for profit and non - profit organisation
Limitations
Always required informed judgements
Only good as pre - requisite information and matching analyses on which it's based
Principles of Good
Governance
No more than 2 directors are current or former company executives
Audit, compensation and nominate committees are made up outside directors
Each director owns a large equity stake in the company
Each director attends at least 75% of all meetings
CEO is not the chairperson of the board
No interlocking directorships
Culture and Politics of
Strategy Choice
Cultural changes strategy may be more attractive because extensive changes can take time and effort
Political maneuvering consumes valuable time, subverts organisation, diverts human energy
Political biases and personal preferences get unduly embedded in strategy choice decisions
Governance
Issues
BoD Duties and
Responsibilities
Control and oversight over management
Adherence to legal prescription
Consideration of stakeholders / interests
Advancement of stockholders' rights