Chapter II

MANAGERIAL PROCESS OF CRAFTING AND EXECUTING STRATEGY

 

I. Developing a Vision/Mission?

bullet Must have strategic future direction
bullet Vision charts future
bullet Vision must be personalized
bullet Vision helps managers manage
bullet See table 2.2, page 20 for characteristics of an effectively worded strategic vision statement
bullet Elements of a Mission Statement
bullet What business is the company in?  Must answer:
bullet What is being satisfied?
bullet Who is being satisfied?
bullet How needs are being satisfied
bullet See Capsule 2.2, page 23 for example strategic vision statements

 

II.  Establishing Objectives

bullet Objectives:  Are a company's commitment to achieving performance targets within a specified time frame
bullet What kind must be set?
bullet Two types:  financial and strategic  See page page 27 and Capsule 2.4, page 28
bullet Objectives are needed for each key result area
bullet Strategic objectives need to be:
bullet Competitor focused
bullet Indicate a strategic intent to stake out a particular business position
bullet Short range objectives:  Indicate speed of progress for 2-3 periods
bullet Long range objectives:  Ultimate targets beyond 2-3 periods
bullet How much Stretch?
bullet High enough to produce outcomes better than current performance
bullet Above what is doable, with a little extra effort
bullet Need objectives at all levels
bullet Objective setting should be "top down" approach
bullet See Capsule 2.5, page 30 for example of balanced scorecard approach to setting objectives

 

III.  Crafting Strategy

bullet Strategies are needed to:
bullet Achieve objectives
bullet Pursue mission/vision
bullet Strategies evolve over time
bullet Indicate what to do and how to do it
bullet Strategy is a game plan for building a sustained competitive advantage
bullet Strategy making hierarchy  (See Fig. 2.2, page 35)
bullet Corporate
bullet Establishes different businesses
bullet Boosts combined performance
bullet Captures synergy
bullet Establishes investment priorities
bullet Business Strategy
bullet Boosts performance in one business
bullet Builds competitive position
bullet Produces sustained competitive advantage in one business
bullet Functional Strategy
bullet Game plan for departments
bullet How functions can be performed to support business strategy
bullet Operating Strategy
bullet How to manage front-line organizational units

 

IV. Implementing and Executing Strategy

bullet Staff the organization -- structure
bullet Develop budgets
bullet Establish policies and procedures
bullet Install operating systems that assist employees to carry out duties
bullet Motivate people
bullet Provide a supportive culture
bullet Implement �Best Practices�, and �Continuous Improvement�
bullet Exert internal leadership
bullet Tie rewards to achievement of objectives

 

V. Initiating Corrective Adjustments

bullet Monitor changes in environment and make adjustments

 

VI. Strategic Management as a Process � Is an on-going, never ending process

Characteristics of the Process:

bullet Much interplay among above five tasks
bullet Not done in isolation
bullet Places erratic demands on management
bullet However, too many changes can be disruptive to employees and confusing to customers and is usually unnecessary
bullet Usually, there is more to be gained from improving execution of existing strategy

 

VII.  Role of Board of Directors

bullet Appraise and approve plan
bullet Be inquiring critics and overseers
bullet Evaluate caliber of executive's strategy making and executing skills
bullet Incent executives to reward shareholders

 

VIII. Benefits of Strategic Approach

bullet Provides better guidance
bullet Makes managers more alert to change
bullet Provides rationale for competing budgets and resources
bullet Helps to unify functional strategies
bullet Creates more proactive environment
bullet Promotes development of constantly changing business model to produce and sustain success

 

Next Steps:  Please review the PowerPoint Overview slides (11-33) for this chapter.  Then proceed to the Discussion Area.

 

 
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