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Understanding Strategic Management Basics

The document provides an overview of strategic management. It discusses how the CEOs of the big three U.S. automakers were sent home from asking for a bailout without a clear strategic plan for the future. It then defines strategic management as formulating, implementing, and evaluating cross-functional decisions to help an organization achieve its objectives and obtain a competitive advantage. The chapter introduces the basic concepts and terms in strategic management.

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77 views7 pages

Understanding Strategic Management Basics

The document provides an overview of strategic management. It discusses how the CEOs of the big three U.S. automakers were sent home from asking for a bailout without a clear strategic plan for the future. It then defines strategic management as formulating, implementing, and evaluating cross-functional decisions to help an organization achieve its objectives and obtain a competitive advantage. The chapter introduces the basic concepts and terms in strategic management.

Uploaded by

maimoonasaleem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Strategic Management

Chapter 1
• When CEOs from the big three U.S. automakers—Ford, General Motors
(GM), and Chrysler—showed up several years ago without a clear strategic
plan to ask congressional leaders for bailout monies, they were sent home
with instructions to develop a clear strategic plan for the future.
• Austan Goolsbee, one of President Barack Obama’s top economic advisers,
said, “Asking for a bailout without a convincing business plan was crazy.”
• Goolsbee also said, “If the three auto CEOs need a bridge, it’s got to be a
bridge to somewhere, not a bridge to nowhere.”
• This text gives the instructions on how to develop a clear strategic plan—a
bridge to somewhere rather than nowhere.
• The chapter provides an overview of strategic management. It introduces a
practical, integrative model of the strategic-management process, and it
defines basic activities and terms in strategic management.
What Is Strategic Management?
• Once, two CEOs competed in the same industry.
• They went camping to explore a prospective merger.
• It was a long hike.
• Suddenly, a grizzly bear stood on its hind legs and growled.
• The first president quickly removed his bag and donned his running
shoes. “You can't outrun that bear,” remarked President #2.
• “Maybe I can't outrun that bear, but I can outrun you!” said the first
president. That is the essence of strategic management: obtaining
and sustaining a competitive advantage.
Defining Strategic Management
• Strategic management is the art and science of formulating, implementing, and evaluating cross-
functional decisions that enable an organization to achieve its objectives.
• As this definition implies, strategic management focuses on:
• integrating management,
• marketing,
• finance and accounting,
• production and operations,
• research and development (R&D),
• and information systems to achieve organizational success.
• The term strategic management in this text is used synonymously with the term strategic
planning.
• The latter term is more often used in the business world, whereas the former is often used in
academia.
• Sometimes the term strategic management is used to refer to strategy formulation,
implementation, and evaluation, with strategic planning referring only to strategy formulation.
• The purpose of strategic management is to exploit and create new and different opportunities for
tomorrow; long-range planning, in contrast, tries to optimize for tomorrow the trends of today.

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