STRATEGIC MANAGEMENT Kelompok 4-1

STRATEGIC MANAGEMENT
INDONESIAN STRATEGIC MANAGEMENT SYLLABUS PAPERS
Arranged by:
Group 4:
Anissa Fitria Febriati/ C1C018070

Chenny Aprianti Utami/ C1C018087
Annisa Verliana/ C1C018090
Livia Puspaa Lingga / C1C018092
ACCOUNTING S1 STUDY PROGRAM

FACULTY OF ECONOMICS AND BUSINESS
BENGKULU UNIVERSITY
2020
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FOREWORD
We praise and thank you to the presence of God Almighty, because of His grace, we were
able to complete a paper on "Material Strategic Management Syllabus" well. This paper has been
prepared to provide information to readers.
Finally, there is a saying that there is no ivory that is not cracked.
We realize that this paper is far from perfect. Therefore, we apologize if there are many
deficiencies in this paper. We hope this paper can be useful for readers.
Bengkulu, April 28, 2020
Writer team
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TABLE OF CONTENTS
TITLE PAGE.........................................................................................................................................i
FOREWORD........................................................................................................................................ii
TABLE OF CONTENTS ...................................................................................................................iii
BACKGROUND...................................................................................................................................1
MATERIAL 1 : THE BASIC CONCEPTS OF STRATEGY MANAGEMENT..................................3

Conclusion............................................................................................................................................13
Question and Answer............................................................................................................................13
Bibliography.........................................................................................................................................14
MATERIAL 2 : UNDERSTANDING THE FORMULATION STRATEGY : VISION, MISSION,

OBJECTIVES, AND STRATEGIC PLAN IN VARIOUS PERSPECTIVES.....................................15
Conclusion............................................................................................................................................21
Bibliography.........................................................................................................................................23
MATERAL 3 : UNDERSTAND AND BE ABLE TO CARRY OUT AN ANALYSIS OF THE

EXTERNAL ENVIRONMENT IN VARIOUS PERSPECTIVES......................................................24
Conclusion............................................................................................................................................27
Bibliography.........................................................................................................................................30
MATERIAL 4 : UNDERSTAND AND BE ABLE TO ANALYZE THE COMPANY'S INTERNAL

ENVIRONMENT IN VARIOUS PERSPECTIVES............................................................................31
Conclusion............................................................................................................................................51
Bibliography.........................................................................................................................................52
MATERIAL 5 : UNDERSTANDING AND ABLE TO IMPLEMENT THE BSC IN

FORM OF CASE STUDY....................................................................................................................53
Conclusion............................................................................................................................................58
Bibliography.........................................................................................................................................59
MATERIAL 6 : BALDRIDGE PERFORMANCE EXCELLENT......................................................60

Conclusion............................................................................................................................................64
Bibliography.........................................................................................................................................66
MATERIAL7 : UNDERSTANDING THE BASIC CONCEPT AND DESCRIPTION OF LEAN-SIX

SIGMA IMPLEMENTATION.............................................................................................................67
Conclusion............................................................................................................................................71
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Bibliography.........................................................................................................................................73
MATERIAL 8 : UNDERSTAND THE DIFFERENT TYPES OF STRATEGIES IN ITS

IMPLEMENTATION...........................................................................................................................74
Conclusion............................................................................................................................................78
Bibliography.........................................................................................................................................80
MATERIAL 9 : UNDERSTANDING THE VARIOUS STAGES AND TECHNIQUES OF

ANALYZING AND CHOOSING STRATEGIES...............................................................................81
Conclusion............................................................................................................................................97
Bibliography.......................................................................................................................................101
MATERIAL 10 : UNDERSTANDING DIFFERENT TYPES, ANALYZING TECHNIQUES

AND CHOOSE STRATEGY.............................................................................................................102
Conclusion..........................................................................................................................................111
Question and Answer..........................................................................................................................112
Bibliography.......................................................................................................................................113
MATERIAL 11 : PROBLEM IMPLEMENTATION OF MANAGEMENT ISSUES AND

OPERATING......................................................................................................................................114
Conclusion..........................................................................................................................................119
Bibliography.......................................................................................................................................124
MATERIAL 12 : STRATEGY IMPLEMENTATION: MARKETING, FINANCIAL /

ACCOUNTING ISSUES, MANAGEMENT AND INFORMATION SYSTEM (SIM)...................125
Conclusion..........................................................................................................................................128
Bibliography.......................................................................................................................................131
MATERIAL 13 : UNDERSTANDING THE PROCESS OF REVIEW,EVALUATION, AND

STRATEGY CONTROL....................................................................................................................132
Conclusion..........................................................................................................................................143
Bibliography.......................................................................................................................................145
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BACKGROUND
Strategic management is senior and the science of regulating, implementing, and evaluating
cross-functional decisions that can overcome a company's goals. Strategic management is the process
of setting organizational goals, developing policies and plans to achieve these goals, as well as
allocating resources to implement policies and planning to achieve organizational goals. Strategic
management combines the activities of various functional parts for the purposes of the organization's
objectives. Strategy management is the highest management activity prepared by the board of
directors and carried out by the CEO and executive team of the organization. Strategic management
provides complete direction for the company and is related to the field of organization. Strategic
management talks about the major. The essence of strategic management is the assistance of goals,
resources, and using existing resources.
Strategic management must now provide a basic foundation or direction for decision making
in the organization. This is an ongoing and ongoing process. The strategic plan is a document that
must be visited and revisited. It may even need to be considered about the fluid that is its priority.
Next to the new information available, it must be used to create new and updated ones. According to
Thomas L. Heelen - J. David Hunger management strategy is the winner of agency decisions and
activities that determine the company's long-term success. The activity consists of the formulation /
planning of strategies, implementation / implementation, and evaluation of the world environment
that changes globalization, controls society, technological development, provides development for
countries and businesses.
Community control over the implementation of government activities, so that the government
and company leaders cannot make policies that urge the interests of the community. Therefore, in
carrying out its activities there needs to be alignment between the competencies required by the
company or government and the environment that exists outside the company (companies and
government). Practical global assessments have an impact on strategic decisions, the boundaries of
the countries to be addressed. others have become a matter of life or death for business. Thus the need
for activities in making decisions tailored to the needs needed with the environment around the need
for a management strategy. Supporting strategic management depends on managers getting an
understanding of support, markets, prices, suppliers, distributors, governments, creditors,
shareholders and customers all over the world. The price and quality of products and services from
companies can compete worldwide, not only in the local market.
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The competition that gives rise to competitiveness with free competition with market
understanding (standard and benchmarking), the speed and accuracy of the delivery of products
(goods and services) that are able to develop added value. Therefore, increasing the competitiveness
of a unique organization, but in essence, increasing by creativity, capacity, usable technology and
expanding successful marketing. It was created to create new products, increase productivity, and
improve good service.
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MATERIAL 1 : THE BASIC CONCEPTS OF STRATEGY MANAGEMENT
A. Define Management Strategy
Strategic management (management strategy) can be defined as the art and science of
formulating, implementing and evaluating cross-functional decisions that make an organization
obtain its goals. Management strategy focuses on integrating management, marketing, finance and
accounting, production and research and development operations and information systems to achieve
organizational success. The term strategy management in the book mm is used synonymously with
the term strategic planning (strategy planning). The last term is more often used in the business world
while the first is often used in academics.different for tomorrowSometimes the term strategic
management is used by referring only to the formulation of strategies.
The goal of strategy management is to find creating new opportunities as wellThe term strategic
planning began in the 1950s, then was popularized between the mid-1960s and mid-1970s.
The essence strategy plan is a game plan of the company such as a soccer team that requires a good
game plan in order to have a chance for successhave a good strategic plan to succeed in competence.
The term strategic management is used on many campuses and universities as the language title of
business administration courses. This course integrates the material and all business courses and in
addition, introduces new strategic management concepts and techniques that are widely used by
companies in strategic planning.
B. Strategic Management Stages
The strategic management process consists of three stages :
1. Strategy formulation (strategy formulation) includes the development of vision and mission,
identifying external opportunities and threats to the organization, determining internal
strengths and weaknesses creating long-term goals, initiating alternative strategies and
choosing specific strategies to achieve.
2. Implementation of the strategy (strategy implementation) requires the formulation of annual
goals, policies to motivate employees and the allocation of resources by the company, so that
the strategies formulated can be donedone Strategy implementation is often called the "action
phase of strategic management Implementing a strategy means mobilizing employees and
managers to change the strategy formulated into action.
3. Strategy evaluation is the final stage in strategic management. Management must know when
certain strategies do not work well. Strategy evaluation is the right way to find out this
information and there are three activities fundamental evaluation of strategy :
 Review internal and external factors that are the basis for the current strategy
 Measuring performance
 Take corrective action
 Integrate intuition and analysis

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Strategic management strives to organize quantitative information where decisions are
madeeffective can be made even in conditions that are uncertain but strategic management is not sans
Sma a good, neat and one-two-three approach.
Based on past experience, some people's judgments and feelings claim thatIntuition (intution)
is very important in making good strategic decisions. The institution is specifically useful in making
decisions in situations with great uncertainty or precedent.small.
different organasısı today can survive and prosper because having people who are geniuses in
the of most other organizations is not the case. Most of the intuition and analysis in decision making
change .
 Adapting to change
The process in strategic management is based on the belief that organizations should
continuously monitor internal and external events so that timely changes can be made when needed.
The extent and magnitude of changes affecting organizations is increasing dramatically as evidenced
by how the global economic recession surprised many firms, firms such as organisms, must "expert in
adapting" or not survive.
One company that strives to adapt is the washington post company. The best known as the
publisher of the washington post newspaper with a circulation of 525,000 in the areaarea washington
DC. However, the newspaper industry is declining globally. so washginton post in order to survive all
organizations must identify and adapt to change. The strategic management process aims to make the
organization adapt effectively to change.
C. Key Terms In Strategic Management
Define nine key terms of competitive advantage for the compilers of the strategy statement
Vision and mission, external opportunities and threats internal weaknesses and strengths, long-term
goals, strategies, objectives and policies.
 Competitive advantage
Strategic management is all about obtaining and maintaining competitive advantage. This can
be defined as "everything that a firm specifically does compared to a rival firm" When a firm can do
something that a firm cannot do or has something that a rival firm wants, it illustrates competitive
advantage. For example, having a lot of cash on the company's balance sheet can create a big
competitive advantage.
Having fewer fixed assets than rival firms can also provide a large competitive advantage. For
example, Apple does not have string-owned manufacturing facilitie while Sony has 57 electronics
factories. Apple relies exclusively on contract manufacturers to produce all of its products, while
Sony has its own factory. Smaller fixed assets allow Apple virtually no long-term debt. Sony instead
has a large debt on its balance sheet.
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Normally, firms can maintain competitive advantage only for a certain period because rival firms
intimidate and follow these advantages. Therefore, it is not enough to only gain competitive
advantage. Firms must strive to gain sustained competitive advantage by (1) continuously adapting to
changes in external trends and events and capabilities of internal competencies, and resources. (2).
Effectively formulates implementing, and evaluating the main strategies of these factors.
More and more companies are gaining a competitive advantage by using
The internet for direct sales and for communicating with suppliers, customers,
creditors, partners, shareholders, clients, and competitors who may spread globally
E-commerce allows firms to sell products, advertising, supply sales, intermediaries,
inventory tracking, eliminating work papers and sharing information. In total. e-commerce
minimizes costs and shortens the time, distance and space in doing business, so as to produce better
customer service, efficiency, product improvement, and higher profitability.
 Strategy Builder
The strategist is the individual who is most responsible for the success or failure of the
organization. The strategist has many job titles, such as chief executive officer, president, chair of the
board owner, executive director, chancellor, dean, or entrepreneur.
Strategists help organizations to obtain, analyze and manage information. They explore
industry and competitive trends, develop predictive models and scenario analysis, evaluate the
performance of divisions and companies mark the opportunity to enter the market identifying
business threats and develop creative action plans Strategic planners are usually supported by the role
of staff Usually found at higher management levels they generally have authority that can be
considered in making decisions at the CEO firm are the most visible and important strategic
managers. In recent years, CSO positions have emerged as new additions to top management in many
organizations including Sun Microsystems, Network Associates, Clarus Lante, Marimba, Spient,
Commerce One BBDO. Cadbury Schweppes, General Motors, Ellie Mae. Cendant Charles Schwab.
Tyco Campbell Soup, Morgan Stanley. and Reed-Elsevier. The official titles at this company
represent recognition of the growing sense of importance for having strategic planning in the business
of Franz Koch, CSO of German sportswear. Puma AG. recently promoted to be the CEO of Puma.
When asked about his plans for the company, Koch stated in a conference call "I plan only to focus
on long-term strategic plans".
Different strategists in each organization These differences must be considered in the formulation,
implementation, and strategic evaluation Some strategists will not consider several types of strategies
because of their personal philosophies.
 Vision and Mission Statement
Many organizations today develop vision statements that answer the question "What will we
become?" Developing a vision statement is often considered the first step in strategic planning,
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preceding the development of a mission statement. Many Vision statements are single sentences For
example, the vision statement at the Stokes Eye Clinic in Florence, South Carolina, namely "Our
vision is to maintain your vision."
The mission statement places the basic questions that all authors will face strategy: "what is
our business product?" A clear mission statement explains the values and priorities of the
organization. Developing a mission statement forces the strategists to think about the nature and
scope of current operations and to measure potential market attractiveness and activities in the future.
The mission statement broadly determines the direction in the future in the organization. The mission
statement is a constant reminder to employees about the reason the organization stands and what the
vision of its founders is when they risk big names and capital to achieve their dreams.
 External threats and opportunities
External opportunities and external threats refer to the economic, social, cultural,
demographic, political environment of government law.technology, and competitive trends and
events that may significantly benefit or harm the organization in the future. Threats and opportunities
are far below the sole control of the organization, so the term is called external. Some of the
opportunities and threats faced by many companies are mentioned below.
• Availability of capital that cannot be over-taken
Consumers expect operations and green products (environmentally friendly)
Marketing moves quickly to the Internet,
Food commodity prices have risen
• Political instability in the Middle East that has raised oil prices
• The problem of computer hackers is increasing.
• Intense price competition between companies
• High unemployment and underemployment rates globally
• Interest rates increase
• Product life cycles become shorter
• Central and local governments are financially weak
• Violence related to drug cartels in Mexico
• Winter is colder and summer is hotter than usual
House prices are low.
• The global market offers the highest growth income
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These types of changes create different types of consumers and the need for service products,
and different strategies. Companies in many industries face external threats from online sales that are
holding back an increase in their market share.The basic principle of strategic management is that
firms need to formulate strategies to take advantage of external opportunities and avoid or reduce the
impact of external threats. For this reason identifying monitoring, and evaluating opportunities and
external threats are essential for success. The process of stopping and collecting and assimilating
external information is sometimes called environmental scanning or industrial analysis.
 Internal Strengths and Weaknesses
Internal strengths and internal weaknesses are controlled organizational activities that are
done well or poorly. Both of these arise in management, marketing, financial / accounting,
production/operations activities. research and development (R & D), and information management
systems (MIS) in business. Identifying and evaluating organizational strengths and weaknesses in
functional areas of business is an important strategic management activity. The organization seeks to
pursue strategies that focus on internal strengths and eliminate internal weaknesses. Strengths and
weaknesses are determined relative to competitors Deficiency or relative superiority is important
information. Weaknesses and strengths can also be determined by elements that are more than just
performance. For example, strengths might include ownership of natural resources or a historical
reputation for quality. Strengths and weaknesses can be determined relative to the goals of the firm.
For example, a high level of inventory turnover may not be a strength for firms that aim to not run out
of inventory.
In conducting a case analysis on stralegic management. it is important to be asvisional as

possible when determining and stating internal weaknesses and strengths. In other words, for
companies like Walmart, saying that Sam Club's revenue grew 11 percent in the last quarter is better
than stating all of their internal factors in Walmart's overall terms. This practice will enable strategies
to be formulated more effectively because in strategic planning, companies must allocate resources
between divisions (segments) of the company (that is, based on any product, region, customer, or unit
within the company), such as Sam's Club versus Supercenters or Mexico versus Europe at Walmart.
Both internal and external factors should be stated in specific terms to some extent, using
numbers, percentages, dollars and ratios, as well as comparisons over time and for rival firms.
Specifications are very important because strategies will be formulated and resources allocated based
on this information. The more specific the internal and external factors that underlie it, the more
effective strategies can be formulated and resources allocated. Determining the numbers will take
time, but the sustainability of the company is often at stake, so identifying and estimating numbers
related to key factors is very important.
Internal factors can be determined in various ways, including calculating ratios, measuring
performance, and comparing with previous periods and industry averages. Different types of surveys
can also be developed and aimed at examining internal factors, such as employee morale, production
efficiency, advertising effectiveness, and customer loyalty.
 Long-term Goals
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Objectives can be defined as specific results that an organization is trying to achieve in
pursuing its mission, essentially a long step meaning more than one year. These goals are important
for organizational success because they provide direction, help in evaluation, create synergies,
express priorities, focus coordination, and provide the basis for effective planning activities.
Organizing, motivating, and controlling. Goals should be challenging, measurable, consistent,
reasonable, and clear. In a multidimensional firm, goals should be made for the whole company and
for each division.
 Strategy
Strategies (strategies) are intended to achieve long-term objectives (long-term objective).

Business strategies might include geographical expansion, diversification, acquisition, product
development, market penetration, reduction, divestment, liquidation and joint ventures. The
strategies currently being followed by several companies are described in Table 1-1.
Strategy is a potential action that requires top management decisions and large corporate
resources. In addition, strategies affect the long-term welfare of the organization, usually for at least
five years, and are therefore future-oriented. The strategy has multifunctional or multidimensional
consequences and requires consideration, both internal and external factors faced by the company.
 Annual Goals
The annual objective is the short-term foothold that the organization must obtain to achieve its
long-term goals. Like long-term goals, short-term goals should be measurable, quantitative,
challenging, realistic, consistent and prioritized. This should be stated in terms of management,
marketing, finance / accounting, production / operations, R&D, and driver's license completion. A set
of annual goals is needed for each long-term goal. Annual goals are especially important in strategy
implementation, while long-term goals are especially important in strategy formulation. The annual
goals represent the basis for allocating resources.
 Policy
Policies are policies used to achieve annual goals. Policies include guidelines, rules and
procedures designed to support efforts to achieve stated goals. Policies are guidelines in making
decisions and handling recurring and recurring situations.
Policies are often stated in terms of management, marketing, finance / accounting,

production / operations, R&D, and management information system activities. Policies can be made
at the company level and applied to all organizations at the divisional level and applied to a single
division, can also be made at the functional level and applied to certain operational department
activities. Policy, like annual goals, is very important in implementing strategy because it highlights
the organization's expectations of its employees and managers. Policies enable consistency and
coordination within and between departments in the organization.
Substantial research suggests that a healthier workforce can effectively and efficiently
implement strategies. Smoking has become a heavy burden on the system. Social welfare in Europe
because of cigarette-related diseases costs US $ 100 billion per year. Smoking is also a huge burden
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for companies throughout the world, so companies are continuously implementing policies to control
smoking. Starbucks in the middle of 2013 banned smoking within 25 feet of its 7,000 stores that
were not in other trading areas.
D. Strategic Management Models
The strategy management process can be best studied and applied, using a model. Each
model represents a certain type of process. This model does not guarantee success, but represents a
clear and practical approach to formulating, implementing, and evaluating strategies. The
relationships between the major components of the strategy management process are shown in the
model that appears in all subsequent chapters, with appropriate areas formed to show the specific
focus of each chapter. The following are three important questions to be answered in developing a
strategic plan:
Where are we now?
Where are we going?
How do we get there?
Identifying existing visions, missions, goals, and strategies is a logical first step for strategy
management because the firm's current situation and conditions may hinder certain strategies and may
even dictate certain actions. Every organization has a vision, mission, goals, and strategy, even if
these elements are not consciously designed, written and communicated. The answer to where the
organization will go in general can be determined based on where the organization is located!
The strategy management process is dynamic and ongoing. Changes to one of the main
components in the model can result in changes to other components for example, countries in Africa
that already have the ease of the internet can represent great opportunities that require changes in
long-term goals and strategies: failure to achieve annual goals requires policy changes, or changes
the main competitor's strategy can cause changes to the firm's mission. Therefore, the activities of
strategy formulation, implementation, and evaluation should be carried out on a sustainable basis not
only at the end of the year or semi-annually. The strategy management process will never really end.
The application of the Strategy management process is generally formal in large and well-
developed organizations. Formality refers to the extent to which participants, responsibilities,
authority, work, and approaches are determined. Smaller businesses tend to be more informal.
Companies that compete in complex environments, and change rapidly, like technology companies,
are more formal in strategic planning. Firms that have many divisions, products, markets, and
technology also tend to be more formal in applying the concept of strategy management. The greater
the formality in implementing the strategy management process is usually positively related to costs.
Completeness, accuracy, and success of planning in all types and sizes of organizations.
E. Benefits Of Management Strategy
Strategy management makes the organization more proactive than relative in shaping its own
future, it allows the organization to initiate and influence (not just respond to) activities and therefore
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be able to control its own destiny. Small business companies, CEOs, directors and managers of many
for-profit and nonprofit organizations know and realize the benefits of strategy management.
Historically, the main advantages of strategy management have helped organizations to

formulate strategies through the use of more systematic, logical, and rational approaches to strategic
choices. This of course continues to be the main benefit of strategic management. However, current
research studies indicate that protest, not decisions or documents are more important contributions
from strategic management. Communication is key in implementing successful strategic
management.Through involvement in the process, in other words, through dialogue and participation,
managers and employees are committed to supporting the organization.
The manner in which strategy management will be implemented is very important. The main
purpose of the process is to gain understanding and commitment from all managers and employees.
Understanding is perhaps the most important advantage of strategic management which is then
followed by commitment. This is true when employees also understand the relationship between the
compensation they receive and organizational performance. Managers and employees become
creative and innovative when they understand and support the company's mission, goals and
strategies. The biggest advantage of strategy management is the opportunity given by the process to
empower individuals.
Strategic planning is the process of learning, helping, educating, and supporting, not just the
process of distributing documents among top executives. Strategy management discussion is more
important than a well-documented strategy management document. The worst thing that strategists
can do is develop a strategic plan for themselves and then present it to the operations manager to
implement. Through involvement in the process, the line manager becomes the "owner" of the
strategy. Ownership of the strategy by the person who will execute it is the key to success.
 Financial Benefits
Research indicates that organizations that use the concept of strategic management are more
profitable and successful than organizations that do not use the concept of strategic management.
Companies that use the concept of strategic management show a significant increase in sales,
profitability, and productivity compared to companies without systematic planning activities.
High-performance companies tend to carry out systematic planning to prepare themselves for
future fluctuations in the internal and external environment. A company with a planning system that
reflects strategic management theory in general shows superior long-term financial performance
compared to its industry. High-performing companies look better at making decisions with good
anticipation of short-term and long-term consequences. Conversely, companies that perform poorly
are often involved in short-term oriented activities and do not reflect good predictions of future
conditions. Strategists in low-performing organizations are often busy solving internal problems and
meeting deadlines for clerical work. They generally underestimate the strength of competitors and
overestimate the strength of their own companies. They often have poor performance by blaming
uncontrollable factors, such as a bad economy, technological change, and competition with foreign
companies.
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More than 100,000 companies in the US fail every year. Company failures include
bankruptcy, confiscation, liquidation and court-mandated takeovers. Although many factors besides
the lack of effective strategic management can lead to business failure, the concepts and planning
tools described in this book can generate large financial benefits for some organizations. The rate of
business failure in the US dropped dramatically in 2012/2013, but has significantly increased in
Europe.
 Non-financial benefits
While helping companies avoid financial failures, strategic management offers other tangible
benefits, such as increased awareness of external threats, increased understanding of competitor
strategies, increased employee productivity, reduced resistance to change, and a clearer understanding
of the performance-reward relationship. Strategic management enhances the ability to prevent
problems by the organization because it makes interactions between managers at all divisions and
functions. Companies that are training their employees and managers, sharing organizational goals
with them, empowering them to help improve products or services, and recognizing their
contributions, can count on them to help the company because of this interaction.
In addition to strengthening managers and employees, strategic management often provides

regularity and discipline for companies that are struggling. This is the beginning of an effective and
efficient managerial system. Strategic management can renew confidence in current business
strategies or show the need for corrective action. The strategic management process provides a basis
for identifying and rationalizing change needs for all managers and employees of the company; this
will help them see change as an opportunity, not as a threat.
F. Traps In Strategic Management
Strategic planning is a complex and highly distributed process that brings organizations to
uncharted territory. Strategic planning does not provide a ready-to-use recipe for success; however,
it takes the organization through the journey and offers a framework for directing questions and
problem solving. Being alert to potential traps and being ready to direct them is an important thing to
do.
G. Guidelines For Effective Strategic Management
Failure to follow certain guidelines in carrying out strategic management can lead to criticism
of the process and create problems for the organization. Issues such as "Is the strategic management
of our company a human process or a document process?" preferably set. Some organizations spend
inappropriate time in developing strategic plans, but then fail to follow through with effective
implementation. Changes and results within a company arise as a result of implementation, not
through formulation, although effective formulations are essential for successful implementation.
Evaluation of sustainable strategies is also important because the world is changing so fast, that the
existing strategies must be modified frequently.
Strategic management should not be a bureaucratic mechanism that continues to rotate

automatically, but it must be a reflective learning process that brings managers and employees closer
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to the organization with key strategic issues and viable alternatives to resolve this issue. Strategic
management must not be ritual, rigid, official, too formal, predictable, and inflexible. Words
supported by numbers, and not numbers supported by words, should represent the media to explain
strategic issues and organizational responses. The key role of strategy makers is to facilitate learning
and sustainable organizational change.
Important guidelines for effective strategic management require open-mindedness. The

desire and willingness to consider new information, new perspectives, new ideas and new
possibilities is very important; all members of the organization must share the spirit of asking and
learning. Strategists such as CEOs, directors, small business owners, and leaders of government
agencies must commit to hearing and understanding managers' positions well enough to be able to
restate these positions for the satisfaction of managers. In addition, managers and employees in the
company should be able to describe the position of the strategy makers to the satisfaction of the
strategists. This will increase understanding and learning.
No organization has unlimited resources. No company can obtain an unlimited amount of

debt or issue an unlimited number of shares to obtain capital. Therefore, there is no organization that
can develop all strategies that can potentially benefit the company. Strategic decisions are therefore
always made to eliminate some actions and allocate anisation resources among others. Most
organizations can try to pursue only a few strategies at the corporate level for some time. It is a
mistake ar if managers pursue too many strategies at the same time, so that the company will spread
little resources, and endanger all strategies.
Strategic decisions require trade-offs such as short-term versus short-term considerations or

maximizing profits versus increasing shareholder wealth. There are also ethics. The trade-off
strategy requires judgment and subjective preferences. In many cases, lack of objectivity in
formulating strategies results in losses in competitive positions and profitability. Most organizations
today realize that the concepts and techniques of strategic management can improve decision
effectiveness. Subjective factors, such as risk behavior, attention to social responsibility, and
organizational culture will all have an impact on strategic formulation decisions, but organizations
need to be as objective as possible in considering qualitative factors. Table 1-2 summarizes the
important guidelines for the strategic planning process to be effective.
CONCLUSION
Strategic management (management strategy) can be defined as the art and science of
formulating, implementing and evaluating cross-functional decisions that make an
organization obtain its goals. Management strategy focuses on integrating management,
marketing, finance and accounting, production and research and development operations and
information systems to achieve organizational success. The term strategy management in the
book mm is used synonymously with the term strategic planning (strategy planning). The last
term is more often used in the business world while the first is often used in
academics.different for tomorrow. Sometimes the term strategic management is used by
referring only to the formulation of strategies.
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MATERIAL 1 QUESTIONS AND ANSWERS :
1. Explain the definition of strategic management in your opinion?
Answer:
Strategic management can be defined as the art and science of formulating, implementing, and
evaluating cross-functional decisions that enable an organization to achieve its objectives.
2. Explain 3 (three) stages of the strategic management process!
Answer:
• Strategy formulation → includes developing mission and vision, identifying external opportunities
and threats to the organization, determining internal strengths and weaknesses, creating long-term
goals, initiating alternative strategies, and choosing specific strategies to achieve.
• Implementation of strategies → requires the formulation of annual goals, policies that motivate
employees, and the allocation of resources by the company, so that the formulated strategies can be
carried out.
• Strategy evaluation → the final or final stage in strategic management. Managers must know when
certain strategies do not work well; Strategy evaluation is the right way to find out this information.
3. Name some of the opportunities and threats faced by many companies!
Answer:
• Availability of capital that cannot be over-taken
• Consumers expect operations and green products (environmentally friendly)
• Marketing moves quickly to the internet
• Political instability in the middle east which has increased oil prices
• The problem of computer hackers is increasing
• Increased interest rates
• The product life cycle is short
• Central and local governments are financially weak
4. What is meant by long-term goals in strategic management?
Answer:
13
Objectives can be defined as specific results that an organization is trying to achieve in pursuing its
basic mission. Long term means more than one year. These goals are important for organizational
success because they provide direction, help with evaluation, create synergies, express priorities,
focus coordination and provide the basis for effective planning, organizing, motivating and
controlling activities
BIBLIOGRAPHY
David,Fred R. 2011. Manajemen Strategis (Strategic Management) Buku 1 Edisi 12. Jakarta:
Penerbit Salemba Empat
14
MATERIAL 2 : UNDERSTANDING THE FORMULATION STRATEGY : VISION,
MISSION, OBJECTIVES, AND STRATEGIC PLAN IN VARIOUS PERSPECTIVES
1. Concept of Vision and Mission

Vision is a value or goal to be achieved by the government and becomes an agreement and a
common reference in carrying out activities. While the mission is a tactic or way that will be carried
out for all forms of activities or activities that refer to the achievement of the vision and mission of an
organization. The vision and mission that has been formulated will be a guide line for all members of
an organization and its community activities to help and contribute to achieving goals and so that all
related components have a common view in achieving goals. The understanding of the vision and
other missions of some experts can be reported the following:
Vision comes from the word vision which describes the foresight of an expectation that holds
the company's ethical values in running the business. While the mission comes from the word
mission is part of the vision, but it is related to the company's code of conduct. An example of the
vision of a bicycle factory to be established, his statement was the sentence: "one house hold one
bicycle". While the example mission, for example, "Cycling makes the body healthy and protect the
environment". This means that the company is tasked with having a social environmental mission
and to make the community healthy.
Vision is a series of words and even a series of sentences expressing dreams, ideals, plans,
hopes of a company organization to be achieved in the future. Whie the mission is a string of
sentences that contain the purpose and reason for the existence of an organization that contains what
is provided by the company / organization to the public, in the form of products and services that
have the aim to deliver to the stakeholders of the organization inside and outside, containing the
background of the company's establisment, direction and company goals.
Mission is the main purpose and activity that makes an organization have a distinctive identity
and at the same time distinguishes it from other organizations that are engaged in similar types of
business. The mission of an organization is a unique (fundamental) and fundamental purpose that
distinguishes the organization from other organizations and identifies the scope of operations in terms
of products and markets or shows the functions to be carried out in certain social and economic
systems.
15
To more easily understand it, the formulation of vision and mission can be distinguished based on
the following explanation:
a. Vision
The statement of vision formulation is often in the form of a single sentences in the form of
a. A picture of the future that is realistic and want to be realized within a certain period of time / a
specified time.
b. This statement, written / written today, is the current managerial process, which reaches forward.
c. The ideal konsisituationa bout the future that is realistic, can be trusted to convince and attract
attraction.
Vision Criteria
a. Short, simple and clear.
b. Interesting, easy to remember.
c. In accordancewithorganizational / companyvalues.
d. Are involvingeveryone.
e. Inspirational, challenging.
f. Descriptionofan ideal concession.
g. Givefuturebusinessdirection.
h. Providescriteriafordecision making.
i. Has a time limit (uptodate).
Benefit sofvision
a. Not a factbutcanbe a pictureofthefuturethatyouwanttorealize.
b. Can givedirectionandpush.
c. Membersoftheorganizationshowgoodperformance.
d. Inspireandbereadytofacetheobstacles.
e. Bridgingthepresentandthefuture.
f. Become a realisticandcrediblepictureofaninterestingfuture.
g. Create a dynamicorganization, not static.
16
b. Mission
Mission formulation
a. It is the essence of establishing an organization that can include a description: the purpose of the
formation of the organization, activities and organizational tips.
b. Is the foundation of strategic planning planning that shows the importance of the organization.
c. It must be clearly stated that the organization is concerned about customer interests.
d. Can invite broad community participation in the development of the main fieldsthey are involved
in.
Components of the Mission statement
a. Consumer - whoisthecompany'sconsumer?
b. Product / service - isthecompany's main productorservice?
c. Market - geographicallywheredoesthecompanycompete?
d. Technology - isthecompanytechnologicallysophisticated?
e. Focusonsurvival, growth, andprofitability -

isthecompanycommittedtogrowthandsoundfinancialcondition?
f. Philosophy - what are thebeliefsofthecompany'sethicalaspirationsandethicalpriorities?
g. Selfconcept - isthecompany'sspecialcompetenceorcompetitiveadvantagethe main?
h. Focusonthepublicmind - isthecompanyresponsivetosocial, communityandenvironmentalissues?
i. Focusonemployees - whetheremployees are seen as valuablecompanyassets.
Characteristics of Mission statement
a. Broad in scope.
b. The sentencelengthisnomorethan 250 words.
c. Inspire.
d. Identifytheusefulnessofthecompany'sproducts.
e. Showthatthecompany / organizationissociallyresponsible.
f. Demonstratethatthecompanyisenvironmentallyresponsible.
17
g. Includesninecomponents: consumers, products / services, markets, technology, focusonsurvival /
growth / profitability, philosophy, self-concept, focusonpublicimage, focusonemployees.
h. Timeless.
The benefits of the mission are as follows;
a. As a frameofreferenceforrealizingthevisionoftheorganization
b. As anevaluation material tocarryouttheorganization'svisionforthefuture;
c. For considerationtoformulate a bettervision;
d. Makeiteasyforalldivisionstocarryoutthework in order toachievethevisionthat has been set.
From the description above, the writer can conclude that, the difference between vision and
missionis; vision is the establishment of universal goals and is holistic (overall), while the mission is
part of the program that has been set in the context of achieving the vision in an organization. The
point is that vision is the main goal while the mission is a special goal in order to achieve the main
goals in an organization.
2.2. Organization goals

Organizations are formed to achieve the goals set by the leadership of the organization and its
members. Organizational goals are not the same, this is seen from the type of organization. Business
organizations have the aim to increase profitability or profits, while public organizations have a goal
in providing better public services or public services.
The purpose of the organization is "as a statement of the desired circumstances in which the
organization intend storealize" and as "a statement of the future conditions in which the organization
as a collective tries to impo seit. The objectives of the organization include (1) the desired end result
in the future (2) the directed efforts or activities.
The concept of organizational goals is widely seen as having several important functions that vary
according to time and circumstances. The variouso bjective functions include the following:
1. Guide lines for activities, through describing the final results in the future. Provide direction and
concentration of organizational activities regarding what must or not do.
2. The source of legitimacy, through justification of its activities. Willin crease the ability of
organizations to get a variety of resources ands upport from the surrounding environment.
3. Implementation standards, provide directst and ards for evaluating the implementation of activities
(organizational achievements).
4. A source of motivation, because it of ten provide sincentives for members.
5. Rational basis for organizing, because between goals and organizational structures interact with
each other in activities to achieve goals.
18
The objectives and benefits of the organization are to
1) overcome the limited ability, willingness and resources they have in achieving goals,
2) achieve goals more effectively and efficiently and efficiently because they are done together
(motives for achieving goals);
3)the contain erutilizes the smberpowerand technology together;
4) a forum for developing one' spotential and specialization (achievement motives);
5) a place to get a position and division of work:
6) a place to manage the environment together;
7) a forum formutual profit (moneymotive);
8) the place to use powerand supervision (motive for power);
9) a place to get ana ward (award motif);
10) a place where human needs are increasing and more complex;
11) the container adds to the association;
12) the contain erutilizes free time.
The view of the goals of the organization above can be concluded that, all organizations have
the same goal, namely, to advance and prosper the people in the organization. The specific objectives
of the organization depend on the form and type of organization, so that specific goals can be realized
through the type of organization that runs the form of business or activity.
2.3. Organizational Goals

The goal (goal) of the organization is a state or condition to be achieved by an organization.
Different types of goals in organizations:
1. Organizationscanhavemorethanonegoal.
2. Organizationsmayhaveoppositegoals.
3. Targets are relatedtooneanother.
4. There are differentviewsofthe target tobe set.
Organizational Goals and Measuring Effectiveness
1. The goal or goal is the reason for the existence of the organization.
19
2. Targets or goals are very important for the management process carried out in an organization.
Give recognition, direction for the organization, organizational measurement, reduce uncertainty.
Types of Organizational Goals
1. OfficialGoal (officialgoal) isthegoalthat has beenlegallydetermined in accordancewiththevisionthat

has been set.
2. The actualdesired target (Operativegoal), thatis, thegoalachieved, butexperienceschange,

sothatthedesired target israisedagain, in accordancewiththeoriginalgoal.
The party that sets the goals of the Organization
1. A singleleader, occurs in smallcompanieswheretheleaderisheldbytheowner.
2. The Leadership Group Coalition, occurs in largeorganizations.
Targets are the translation of organizational goals, in the final formand will be achieved or
produced within an annual, semi annual, or monthly period. Targets also describe things to be
achieved through the actions that will be taken to achieve the goals, there fore the goals set are
expected to provide a focus on the preparation of programs and activities that are specific, detailed,
measurable and achievable. Organizational goals that are set are basically part of the strategic
planning process with the main focus in the form of actions and allocation of organizational resources
in the planned activities or operations of the organization to be implemented.
The view of the above organizational goals can be concluded by the author that, setting goals
and objectives is based on the identification of key success factors determined after the determination
of the vision and mission. Setting goals will lead to the formulation of targets, policies, programs and
activities in order to realize the vision and mission. Targets describe the things to be achieved
through focused actions that are specific, detailed, measurable and achievable.
2.4. Linkages between Vision, Mission and Organizational Strategy Objectives

Today's organizations need to formula to clear visions, missions that support the achievement
of missions, goals that are easy to achieve and organizational strategies that are abletorealize.
Between Vision, Mission, and Strategic Planning have a very close relationship and need each other.
Vision is a general formulation of the desired situation at the end of the planning period, Mission is a
general formulation of the efforts to be carried out to realize the Vision, while Strategic Planning is
the process of deciding the programs to be carried out by the organization and the estimated amount
of resources to be allocated to any long-term program for the next few years.
Thus strategic planning isused to determine / make a vision and mission of the organization
and divideup the resources needed to achieve it. So it can be said that an organization initially has an
ideal or final goal to be achieved in a long term called vision, then to achieve / make a vision of the
20
organization that has been determined, the organization formulates general efforts to be call
edmission, then To make the mission clear, the organization makes / formulates specific efforts that
are felt to be the most effective and efficient way to achieve the ideals of the organization called
strategic planning.
More clearly the vision is a statement about the description of the circumstances and
characteristics to be achieved by an institution in the far future. The mission is a statement of what
must be done by the institution in an effort to realize the vision, and its relationship with the strategic
plan is to provide direction that will bring the institution in achieving goals that are in accordance
with the vision and mission that has been formulated.
CONCLUSION
Vision is a value or goal to be achieved by the government and becomes an agreement and a
common reference in carrying out activities. While the mission is a tactic or way that will be carried
out for all forms of activities or activities that refer to the achievement of the vision and mission of an
organization. The vision and mission that has been formulated will be a guide line for all members of
an organization and its community activities to help and contribute to achieving goals and so that all
related components have a common view in achieving goals. The understanding of the vision and
other missions of some experts can be reported the following:
Vision comes from the word vision which describes the foresight of an expectation that holds
the company's ethical values in running the business. While the mission comes from the word
mission is part of the vision, but it is related to the company's code of conduct. An example of the
vision of a bicycle factory to be established, his statement was the sentence: "one house hold one
bicycle". While the example mission, for example, "Cycling makes the body healthy and protect the
environment". This means that the company is tasked with having a social environmental mission
and to make the community healthy.
MATERIAL 2 QUESTIONS AND ANSWERS:
1. What do you know about the concept of vision and mission?
Answer:
Some organizations agree on the basic vision that the company is trying to get in the
long run. A clear vision provides the foundation for developing a comprehensive mission
statement. While the mission is in the form of an enduring statement of the goals that
distinguish one organization from another similar organization. A clear mission statement is
important for effectively setting goals and formulating strategies.
2. Mention the process of developing vision and mission!

21
Answer:
During the process of developing vision and mission statements, several

organizations used discussion groups made up of managers, to develop and modify existing
statements.
3. Explain 2 reasons why the mission statement is broad in scope!
Answer:
• A good mission statement allows a number of objectives and strategies to be produced

and considered without undermining management's critique.
• Mission statements need to be broad to effectively reconcile differences between, and also
be of interest to, various stakeholders, organizations.
4. What is the best way to develop the ability to write and evaluate mission statements?
Answer:
Perhaps the best way to develop the ability to write and evaluate mission statements is to learn
the company's actual mission.
5. What is the mission statement according to McGinnis?
Answer:
• What is an organization and what it aspires for
• Specific enough so that it does not include a particular business at once broad enough to
allow creative growth
• Differentiating an organization from other organizations
• Serves as a framework for evaluating both current and prospective activities
• Clear enough to be widely understood throughout the organization
22
BIBLIOGRAPHY
Hadari, Nawawi. 2005. SocialFieldResearchMethods. Yogyakarta: Gadjah Mada UniversityPress.
Wibisono, Dermawan.2006. Performance Management. Jakarta: Erlangga.
Siagian, Sondang.2003. ManagementofSratejik. Jakarta: Bumi Aksara.
Handoko, Hani. 2003. Management. Yogjakarta: BPFE - Yogyakarta.
Qudrat, M.Nugraha.2014. Main Material ofGovernment'sStrategicManagement. South Tangerang:

Open University.
Rekshodiprodjo, Sukanto & T. Hani Handoko. 1984. Company Organization: TheoryandBehavior.

Yogyakarta: BPFE - Yogyakarta.
Sedarmayanti.2014. StrategicManagement. Bandung: PT Refika Aditama.
Siagian, Sondang.2003. StrategicManagement. Jakarta: PT. Earth Aksara.
Usman, Husauni.2011. ManagementTheory, Practice, andEducationalResearch. Jakarta: PT.

EarthLiteracy.
Winardi. 2007. OrganizationalTheoryandOrganizing. Jakarta: PT. RajaGrafindo Persada.
23
MATERAL 3 : UNDERSTAND AND BE ABLE TO CARRY OUT AN ANALYSIS OF
THE EXTERNAL ENVIRONMENT IN VARIOUS PERSPECTIVES
A. DEFINITION OF ENVIRONMENTAL ANALYSIS

The environment is a strength of a condition of a state of events that are interconnected where
the organization has or does not have the ability to control it, while other definitions say the
environment is defined as everything that exists around humans and affects the development of
human life. While environmental analysis is a process of monitoring the organization's environment
that aims to identify opportunities (threats) and challenges (threats) that affect the company's ability
to achieve its goals.
The external environment can be regarded as components or environmental variables that
are or come from outside the organization or company. These components tend to be outside the
reach of the organization, meaning that the organization or company cannot intervene in these
components. Components are more likely to be treated as something that is given or something that
inevitably has to be accepted, just how organizations compromise or deal with these components.
B. PURPOSE OF ENVIRONMENTAL ANALYSIS

The purpose of environmental analysis according to the company To provide the ability to
reach critical problems in the environment for company management to investigate the future
conditions of the organization's environment and then try to incorporate it into organizational decision
making, and identify significant urgent problems for the company and give priority to these problems.
, and develop a plan to handle it.
C. ENVIRONMENTAL ANALYSIS COMPONENTS

The Environmental Analysis Components can be grouped into 4 namely:
 Scanning
Scanning is an attempt to study all segments in the general environment. Through scanning
the company identifies initial signals of changes that might occur in the general
environment and detects any changes that are happening. With scanning, the
analyst specifically deals with information and data that are unclear, incomplete and not
related to each other
 Monitoring
24
When monitoring, the analysts observe changes in the environment to see if, in fact, a trend is
developing. Important for the success of a monitoring is the ability to detect the meaning of
each environmental event. For example, new trends in education can be estimated from
changes in central and state funds for educational institutions, changes in secondary school
graduation requirements, or changes in the contents of high school curricula. In this case the
analyst will determine whether these different events represent a tendency in education, and if
so, whether other information data should be studied to monitor the trend.
 Forecasting
Scanning and monitoring relate to what happens in the general environment at any given time.
When forecasting, the analyst develops projections about what will happen, and how fast, as a
result of changes and trends detected through scanning and monitoring. For example, analysts
can estimate the time needed for a new technology to reach the market. Or they can also
estimate when different company training procedures are needed to deal with changes in the
composition of the workforce, or how long it will take for changes in government taxation
policies to influence consumer consumption patterns.
 Assessing
The purpose of assessing is to determine the time and influence of environmental changes and
trends in a company's strategic management. Through scanning, monitoring and forecasting,
analysts can understand the general environment. A step further, the purpose of the
assessment is to determine the implications of that understanding for the organization, without
assessment, the analyst will obtain interesting data, without knowing its relevance.
D. EXTERNAL ENVIRONMENTAL GROUP

According to Hani Handoko the micro external environment as follows:
 Competitors
The company's competitive environment is reflected in the type, number and norms of
behavior of competing organizations. With an understanding of the competitive environment
faced, organizations can find out their competitive position, so they are better able to optimize
their operations. For example; To increase its market share (market share), where products
and prices are the same as competitors, companies must create differences (differences), in
packaging (packaging), services (services), or promotion (promotion). Understanding the
25
arena, the nature of competition (competitors), as well as the strengths (strengths) and
weaknesses (weaknesses) of competitors, allows companies to use their competitive strengths
more effectively and efficiently.
 Customer
The company's marketing strategies, policies and tactics are highly dependent on the market
and customer situation. Usually marketing managers analyze the current and potential
customer profiles and market conditions and direct the company's marketing activities based
on the results of the analysis.
 Labor market
The organization requires a number of employees (personnel) with a variety of skills, abilities
and experience, so need to use many channels to attract and get these employees. There are
three factors that most influence the fulfillment of the needs of company employees, namely:
The company's reputation in the eyes of the workforce,
Growth rate of the labor force,
Availability of labor according to needs.
 Financial institutions
Organizations depend on a variety of financial institutions, such as banks, insurance
companies, including the capital market, to maintain and expand their activities, short-term to
finance operations, long-term to build new facilities and buy new equipment (investment).
 Suppliers
Each organization is very dependent on the sources of its resources to meet the needs of raw
materials (raw), auxiliary materials, services, energy and equipment, which are used for
production.
 Government representatives
Organizational relations with government representatives are increasingly complex. They
usually set rules that must be obeyed by the organization in its operations, licensing
procedures, and other restrictions to protect the community.
E. COMPETITIVE FACTORS IN COMPETITION IN THE INDUSTRY

Compared to the general environment, the industrial environment has a more direct effect
on strategic competitiveness and profitability. The intensity of competing in the industry and the
profit potential of the industry as measured by the return on investment in the long run is a function of
26
the five competitive forces of the threat of new competitors, suppliers, buyers, substitute products,
and the intensity of competition between competitors.
The five power model developed by Michael Porter broadens the field for competitive
analysis. Historically, when observing the competitive environment, companies have concentrated on
companies that are their competitors. But now competition is seen as a group of alternative ways for
consumers to get the desired results rather than only as direct competitors.
The five forces model recognizes that suppliers can become company competitors with
forward integration, just as buyers can also become company competitors with backward integration.
Likewise, companies that choose to enter a new market and choose to produce goods that can be
substituted for the goods they produce, can become competitors. Because the characteristics of the
industrial environment shape the company's strategy, environmental analysts try to determine the
relative strengths of each of these competitor's strengths
 Threat of New Arrivals

New manufacturers can jeopardize existing companies. New producers produce additional
production capacity. New producers have a large amount of resources and a strong will to
gain market share. The presence of new competitors can encourage existing companies to
become more effective and efficient and to learn how competitors are in a new dimension.
 Bargaining power of suppliers

Rising prices and reducing the quality of products sold are potential ways that suppliers can
use to gain strength against competing companies in an industry.
 The Power of a Buyer Offer

Buyers prefer to buy products at the lowest possible price where the industry can get the
lowest possible return. To reduce costs, buyers will demand higher quality, better service, and
lower prices.
 Threat of substitute products or services

Each company will try to compete with other companies that produce replacement products.
The price of a substitute product can be the highest limit of the price to be set by a company.
Examples in substitute products such as natural rubber are replaced by synthetic rubber, sugar
derived from sugar cane is replaced by synthetic sweeteners.
27
CONCLUSION
The environment is a strength of a condition of a state of events that are interconnected where
the organization has or does not have the ability to control it, while other definitions say the
environment is defined as everything that exists around humans and affects the development of
human life. While environmental analysis is a process of monitoring the organization's environment
that aims to identify opportunities (threats) and challenges (threats) that affect the company's ability
to achieve its goals.
The external environment can be regarded as components or environmental variables that
are or come from outside the organization or company. These components tend to be outside the
reach of the organization, meaning that the organization or company cannot intervene in these
components. Components are more likely to be treated as something that is given or something that
inevitably has to be accepted, just how organizations compromise or deal with these components.
MATERIAL QUESTIONS AND ANSWERS 3:

1. Mention 5 categories of external power!
Answer:
• External strength
• Cultural, demographic and environmental strength
• Political, government and legal power
• The power of technology
• Competitor strength
2. Explain the notion of competitive intelligence!

Answer:
It is a systematic and ethical process for collecting and analyzing information about competitive
activities and general business trends for future business purposes.
3. Mention 5 competitive forces in the industry!
Answer:
• Competition among competing companies
• Entry of new or potential competitors
• Potential development of substitute products
• Strength of supplier bargaining position
• Strength of consumers' bargaining position
28
4. Explain the notion of market publicity and resource equality!
Answer:
• Market announcements can be defined as the number and significance of markets where they
compete with competitors.
• Resource equality is the degree to which the type and amount of internal company resources can be
compared to competitors.
29
BIBLIOGRAPHY
Hit A. Michael. Dkk. 1996. Manajemen Strategis. Jakarta: Penerbit Erlangga.

Siagian.Sondang. 2005. Manajemen Strategis. Jakarta: PT Bumi Aksara
Dirgantoro Crown. 2001. Manajemen Strategis. Jakarta: PT Gramedia Widiaasarana Indonesia.
Irantara Yosal. 2004. Manajemen Strategis Public Relations. Jakarta: Ghalia Indonesia
30
MATERIAL 4 : UNDERSTAND AND BE ABLE TO ANALYZE THE COMPANY'S
INTERNAL ENVIRONMENT IN VARIOUS PERSPECTIVES
A. INTERNAL AUDIT RIGHTS
Internal strengths / weaknesses are combined with external threats / opportunities and
clear company mission, the basis for setting goals and strategies. This is done to utilize internal
strengths & overcome weaknesses.
The strength of a company that cannot be easily matched or imitated by competitors is called
distinctive competencies. Robert Grant concluded that internal audit was more important by
saying:
"In a world where consumer preferences are very dynamic, consumer identity is
changing, and technology that is intended to serve the needs of consumers is
constantly developing; an externally focused orientation will not provide a secure
foundation for long-term strategy formulation. As the external environment continues
to change, the company's own resources and capabilities are likely to be a more
stable foundation for defining its identity. "
The process of conducting internal audits provides wider opportunities for participants
to understand how their work, departments, and divisions can function appropriately
within the organization as a whole. Conducting an internal audit is therefore a very good
tool or forum to improve the communication process within the organization.
Internal auditing requires collecting, adjusting and evaluating information about the
company's operations. Important success factors, including both strengths and weaknesses
can be identified and prioritized.
The process of carrying out internal audits includes:

1. The internal audit process involves units within the company, similar to the units
involved in external audit.
2. Internal audits provide more opportunities for corporate units to better understand
how their role in the company, so they better understand
the impact they have on the company.
3. Carrying out internal audits requires collection, assimilation and evaluation
about company operations.
4. Through involvement in carrying out internal audits, different units within
the company can understand the nature and influence of other units for the company.
5. Failure to realize the relationships between units within a company is dangerous
31
because more and more parts of the company must be managed and addressed
6. Financial ratio analysis shows the complexity of relationships between business
units within a company which is usually caused by failed marketing activities,
inappropriate management policies & ineffective information systems
B. VIEW RESOURCE BASED VIEW BASED ON RESOURCES
A resource is an asset, competency, process, skill, or knowledge that is controlled by

the company. Resources include knowledge of general analytical concepts and procedural
techniques for each region and the ability of people in each area to use them effectively. If
used properly, these resources serve as strengths for value-added activities and support
strategic decisions.
Gaining popularity in the 1990s and continuing to the present, the Resource-Based
View (RBV) approach to competitive advantage believes that internal resources are more
important to the company than various external factors in its efforts to achieve and
maintain competitive advantage . Contrary to I / O theory, adherents of the RBV view
believe that organizational performance will be largely determined by a variety of internal
resources that can be grouped into 3 broad categories
namely:
1. Physical resources
Example: all factories and equipment, location, technology, raw materials, machinery
2. Human Resources
Example: all over employee training, experience, intelligence, knowledge,
skills, abilities
3. Organizational Resources
Examples: company structure, planning processes, information systems, patents,
trademarks, copyrights, databases and the like.
This RBV view emphasizes that resources are what really help companies exploit
opportunities and neutralize threats. The basic reason for the RBV is that the mix, type,
amount, and nature of a company's resources must be considered as the main one in
choosing and establishing strategies that can lead to sustainable competitive advantage. To
be valuable, a resource should meet one of the following empirical indicators:
1. Scarce resources are resources that are not easily owned by competitors.
2. Resources that are difficult to replicate make it increasingly scarce.
3. Resources cannot be easily replaced by substitutes (substitute items)
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C. INTEGRATING STRATEGY AND CULTURE
Organizational culture can be defined as a pattern of behavior that has been developed
by an organization when the organization learns to overcome the problems of external
adaptation and internal integration and which have proven successful enough to be
considered legitimate and taught to new members as the correct way to look, think, and
feel . Corporate culture must support collective commitment to achieve common goals so
that the competence and enthusiasm of members increases. Corporate culture significantly
influences business decisions and as such must be evaluated during internal audits.
The internal strengths and weaknesses associated with company culture are
sometimes invisible because of the interfunctional nature and are important because of
success
The company is determined by the culture and strategy of the company facing change.
In an effort to successfully compete in the world market, managers must obtain better
knowledge about the historical, cultural and religious forces that motivate and encourage
people in other countries. Perhaps the biggest obstacle to the effectiveness of managers
from one country working in another is the fact that it is almost impossible to change the
attitude of a foreign workforce. "The system moves you. You cannot fight the system or
culture, "said Bill, President Phillips Petroleum in Norway.
D. FUNCTIONAL BUSINESS
1. MANAGEMENT
Management functions, including:
Planning. Planning consists of all activities related to future preparation. Specific
work includes forecasting, goal setting, formulation
strategy, policy development and goal setting.
Organizing Organizing includes all managerial activities that produce work
structures and authority relationships. This area covers organizational design, job
specialization, job descriptions, control ranges,
unity of command, coordination, job design and job analysis.
Providing motivation. Motivation involves efforts to shape behavior. Specific topics
include leadership, communication, work groups, behavior modification, delegation
of authority, job satisfaction, organizational change as well
employee and managerial morale.
Staff management. Staff management is focused on staff only. Included in it are
salary and wage administration, employee facilities, interviews, recruitment
processes until termination of employment, work safety, trade unions, personnel
33
research to public relations.
Control. Control refers to all managerial activities that are directed at ensuring actual
results are consistent with planned results. The main areas of concern are quality
control, sales control, inventory control, cost control, variance, rewards to sanctions.
List of management audit questions, including:

1. Does the company use the concept of strategic management?
2. Are the goals and objectives measurable and well communicated?
3. Have all managers made effective planning?
4. Do managers delegate authority well?
5. Is the organizational structure appropriate?
6. Are job descriptions and specifications clear?
7. Are employee morale high?
8. Are employee turnover and absenteeism high?
9. Have the compensation and control mechanisms been effective?
2. MARKETING
Marketing can be described as the process of defining,
anticipating, creating, and fulfilling the needs and desires of consumers for products
and services. There are seven main functions of marketing, namely:
a. Consumer Analysis
Consumer analysis - observation and evaluation of needs, desires and desires
of consumers - involves the procurement of consumer surveys, analyzing
consumer information, evaluating market positioning strategies, developing
customer profiles, and determining optimal market segmentation strategies.
Successful organizations constantly monitor current and consumer spending
patterns
potential consumers.
b. Product / Service Sales
Sales includes many marketing activities, such as advertising, sales
promotions, publicity, personal sales, sales force management, customer relations,
and dealer relations. These activities are very important
when the company runs a market penetration strategy.
c. Product / Service Planning
Product and service planning includes various activities such as marketing
testing; positioning of products and brands; utilization of the warranty; packaging;
determining product choices; product features; product quality; old product
erasers; and the provision of consumer services. Product and service planning is
especially important if
the company undertakes product development or diversification.
34
d. Pricing
Sometimes, an organization will carry out future integration strategies to achieve better
control over the prices charged to consumers. Strategists must look at prices from both a short
and long term perspective, because competitors can copy price changes easily.
e. Distribution
Various marketing entities act as intermediaries; they have many names like
sellers, wholesalers, retailers, brokers, facilitators, agents, vendors - or just
distributors. Distribution becomes very important when a company tries to
implement market development strategies or integration in the future. Successful
organizations identify and evaluate alternative ways to reach their final markets.
The approaches vary from direct sales to the use of one or many, wholesale or
retail sales. The strengths and weaknesses of each alternative channel must be
determined based on economic, control and adaptation criteria. Once a marketing
channel has been chosen, an organization must be "loyal" to it for the period
long time.
f. Marketing Research
Marketing research is the systematic collection, search and analysis of data on
various issues related to the marketing of goods and services. Marketing research
activities support all the main business functions of an organization. Organizations
that have marketing research skills
the good has great power to carry out generic strategies.
g. Opportunity Analysis
Opportunity analysis involves assessing the costs, benefits and risks associated
with marketing decisions. Three steps are required to make
cost-benefit analysis:
1. Calculate the costs associated with a decision
2. Estimating the total benefits of the decision
3. Compare total costs with total benefits
One key factor to consider is a cost-benefit analysis must also be made when a
company evaluates alternative ways to become a socially responsible company.
List of marketing audit questions, including:

1. Is the market effectively segmented?
2. Is the company's position in the competition?
3. Has market share increased?
4. Are the distribution channels and their costs effective?
5. Is the sales organization effective?
6. Has the company done marketing research?
7. Are consumer products and services good?
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8. Is the pricing correct?
9. Is the marketing strategy effective?
10. Have the planning and budget been effective?
3. FINANCE / ACCOUNTING
Financial conditions are often considered the best single measure for a
company's competitive position and attractiveness to investors. According to James
Van
Horne, the financial / accounting function consists of 3 decisions:
1. Investment decisions (capital budget), namely the allocation and reallocation of
resources for various projects, products, assets and divisions of an organization.
Once the strategy is formulated, budgeting decisions are needed to implement the
Facebook strategy
it works.
2. Financing decisions, namely determining the best capital structure of the company
and covering efforts to examine various methods used by the company
to raise capital.
3. Dividend decision, which determines the amount of funds in the company
compared to the amount paid to shareholders.
Financial ratio analysis is the most widely used method to determine the
strengths and weaknesses of an organization in the area of investment, financing, and
dividends. Because the functional areas of business are closely related to financial
ratios can indicate strengths or weaknesses in marketing management activities,
production, research and development, and management information systems.
Types of Basic Financial Ratios
How to calculate What is Measured

Liquidity Ratio
Current Ratio Current assets The extent to which a
Short-term obligations
company is able to
meet long-term
obligations
in short
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Fast ratio Current assets minus inventory The extent to which a
Current liabilities
company is able to
meet long-term
obligations
in short
without
to depend on on
sale of inventory
Lever Ratio
Ratio debt Total debt Percentage of total
Total assets funds
to total assets
provided by creditors
Ratio debt Totaldebt Percentage of total
Totalshareholder equity
towards equity funds provided by
creditors and by
owner
Long-term debt to Long-term debt The balance between
equity ratio debt and equity in the
term capital structure
long
company
The ratio of Profit before interest and tax The extent to which
Total interest expense
multiples of interest profits are reduced
that can be paid
without making the
company unable to
pay off costs
flower
its annual
Activity Ratio
Inventory Sales Does the company
Finished goods inventory
turnover have
stock
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stock that
too much and whether
the company
slow sell its
inventory
compared to average
industry
Rotation Sales Sales productivity
Fixed assets
and
asset permanent
use
factory
and supplies
Rotation total Sales Does the company
Total assets
asset produce sufficient
business volume for
large investments
its assets
Accounts receivable Annual credit sales Average forever
Accounts receivable
turnover time that
company needs
for
charge the sale
his credit (in
percentage)
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Time billing Accounts receivable Average forever
Totalcredit sales/ 365 days
average time that
company needs
for
charge the sale
credit (in days)
Profitability ratio
Gross profit margin Sales less COGS Total margin that
Sales
available for
close load
operation and
make a profit
Operating profit Pre-interest income and tax (EBIT) Sales Profitability
margin
without into account
tax and interest
Net profit margin Net profit Profit after tax per
Sales
euro sales
Top returns Net profit Profit after tax per
Total assets
total assets dollar assets. This ratio
called too
return on
investment (ROI)
Returns on Net profit Profit after tax per
shareholders' equity dollar
investation
shareholders in
company
Earnings per share Net profit Profit that
Number of ordinary shares outstanding
available for
owner stock
ordinary
Price-earnings ratio Market price per share Company appeal
Earnings per share
in the equity market
Growth Ratio
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Sales Percentage of annual growth in total Growth rate
the sale company sales
Net profit Percentage of annual growth in profits Growth rate
corporate profits
Earnings per share Percentage of annual growth in LPS Growth rate
Company LPS
Dividends per share Percentage of annual growth in dividends per Dividend growth rate
share per stock
company
List of financial audit questions:
1. Where are the company's financial strengths and weaknesses?

2. Can the company get short-term capital?
3. Can the company get long-term capital?
4. Does the company have enough working capital?
5. Are capital budgeting procedures effective?
6. Are dividend policies reasonable and logical?
7. Is the company's relationship with investors and owners good?
8. Are managers' abilities and experience sufficient?
4. PRODUCTION / OPERATION
The production function consists of all activities that convert inputs into
outputs. Production management is closely related to varied inputs,
transformations, and outputs between industries and markets.
Basic functions of production management:
Function Explanation
Process Process decisions related to the design of physical production systems.
Specific decisions include technology choices, facility layout, process flow
analysis, facility location, line balance, process control, and
transportation analysis.
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Capacity Capacity decisions are concerned with determining the optimal level of
output for the organization - neither too much nor too little. Specific decisions
include forecasting, facility planning, planning
aggregate, scheduling, capacity planning and queue analysis.
Stock Inventory decisions regarding the management of the level of raw materials,
work processes, and finished goods. Specific decisions include what needs to
be ordered, when to order, how many orders, and
handling ingredients
workforce Workforce decisions related to the management of a skilled, unskilled,
clerical, and managerial workforce. Specific decisions include work design,
work measurement, work enrichment,
work standards, and motivational techniques.
Quality Quality decisions aim to ensure that high quality goods and services are
produced. Specific decisions include quality control, sample selection,
testing,
quality assurance, and cost control.
Implications of Various Strategies for Production / Operational Functions

Various Strategies Implication
1. Compete as a provider of low-cost goods or  Creating a big obstacle to
services competitor
 Creating a bigger market
 Requires higher product age
fewer product lengths and changes
 Need equipment and facilities
special
2. High as the quality  Offering a total profit greater than

provider
competiti smaller sales volume
on  Requires quality assurance efforts
and higher operating costs
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 Need more precise work,
which is also more expensive
 Need the worker that very
skilled, who demand higher wages and more
training
3. Emphasizing customer service  Need person, service, and
a lot of equipment
 Requires a fast response on
consumer needs or changes in consumer
tastes
 Requires inventory investment
greater than
4. Provide introduction new  Need equipment and person
product quickly and multi talented
often  Have cost research and
higher development
 Have cost the training
back and
high equipment
 Provides products in lower volumes and
smaller opportunities for improvement due
to curves
learning
5. Vertical integration  Enable company for more
control the process
 Requires entering into a business area
less known
 Need investation capital and
technology and high skills, more than what
is now
6. Consolidating processing (centralization)  Can produce economies of scale
 Can choose a location near the consumer
or main supplier
 Vulnerability: just one strike
work, Fire or flood could
stop the whole operation
7. Spread processing Jasan  Can close together more Lots
with
42
(decentralization) consumers and suppliers
 Requires complex coordination
and increasing the number of employees
and certain equipment in each location
 If each location produces one product in its
line, other products must still be transported
to be available
in all locations
 If each location specializes in one type of
component for all products, the company is
vulnerable to strikes
work, fire, flood and such
 If each location provides a line
total product, economies of scale are
difficult to achieve.
8. Emphasize the use of machines, automation,  Requires high capital investment
robots  Reducing flexibility
 Can to influence relationship with
the worker
 Make maintenance more important
9. Emphasize job stability  Help taste secure the employee
and
build their loyalty
 Helps attract and maintain
highly skilled employees
 It may require revision of make-or-buy
decisions, when to use free time, inventory
and subcontractors
demand fluctuates
List of production audit questions, including:

1. Is the supply of materials and tools adequate and reliable?
2. Are production facilities and equipment in good condition?
3. Are control policies and procedures effective?
4. Are quality control policies and procedures effective?
5. Is the location of materials, resources and markets strategic?
6. Does the company have technological capability?
43
5. RESEARCH AND DEVELOPMENT
Organizations invest in R&D because they believe that such investment will
produce a superior product or service and that gives them a competitive
advantage. The R&D budget is directed at developing new products before
competitors do it, to
improve product quality or to improve the production process so that it can reduce
costs.
Effective management of R&D functions requires strategic partnerships and
operational between R & D functions with the functions of other important parts.
Four approaches to determining the usual R&D budget allocation
used are:
a. Funding as much as possible the project proposal.
b. Use of sales percentage method.
c. Budgeting is more or less the same as that issued by competitors for
R&D
d. Determination of how many successful new products are needed to estimate
the required R&D investment.
R & D in organizations has 2 basic forms, namely:

a. Internal R&D, where an organization runs its own R&D department
b. Contact R&D, where companies recruit independent researchers or independent
institutions to develop certain products. One approach that is widely used to obtain
outside R&D assistance is to conduct joint ventures with other companies
6. MANAGEMENT INFORMATION SYSTEM

Information system according to Davis & Olson (1987), is an integrated
machine / person system to produce information to support operations,
management and decision making functions in an
organization (Eko Nugroho, 1994).
Information systems have a variety of basic potentials. These potentials must
be utilized by the company to achieve excellence
in competing. The basic potentials of an information system include:
a. The ability to carry out calculations quickly, thoroughly and reliably.
b. The ability to store and process large amounts of data
c. The ability to communicate data and information remotely
d. Ability to work with self-controlled systems
e. Other potentials arising from the utilization of the basic potential mentioned
above.
44
The purpose of management information systems is to improve the
performance of a business by improving the quality of management decisions.
Thus, an effective management information system collects, encodes, stores,
synthesizes, and presents information in such a way as to be able to answer a
variety of strategic operation questions. The core of an information system is a
database that contains various segments and data that are important to managers.
Duty The main information systems manager is designing and managing the
flow of information in organizations in ways that can increase productivity and
decision making. Company information systems can be either strengths or
weaknesses in all three aspects of strategic management. Information systems can
not only help in environmental observation and control of various company
activities, but also can function as a strategic weapon in an effort to gain
competitive advantage.
Management information systems obtain raw materials (material) from an

external and internal evaluation of an organization. Material flows following a
logical path into a computer information system, while data is entered into the
system and transformed into output. An effective management information system
utilizing computer software and hardware, various analyzes, and databases.
Strategic Planning Software

Strategic planning software must be simple and uncomplicated. Simplicity
allows broad participation among company managers and participation is essential for
the successful implementation of strategies.
A strategic planning software product that is suitable to be offered to managers
and executives is CheckMATE. CheckMATE combines the most modern strategic
planning techniques. Specific analytical procedures covered in this program are
Strategic Position and Action Evaluation (SPAcE) analysis, Strengths-Weaknesses-
Oppurtunities-Threats (SWOT) analysis, Internal-External (IE) analysis, and Grand
Strategy Matrix analysis.
E. CHAINSCORE
All companies have a value chain that includes obtaining raw materials, designing
45
products, building production facilities, developing cooperation agreements, and
providing services for customers. Value chain analysis refers to the process by which a
company determines the costs associated with supply
materials, production processes to the marketing process of finished products.
According to Porter, a company's business is best described as a value chain, where
total revenue minus the total cost of all activities carried out
to develop and market products or services that produce value.
Value Chain Analysis-VCA aims to identify the advantages or disadvantages of low
costs that exist along the value chain starting from raw materials
to consumer service activities.
The initial step to implementing this procedure is to divide a company's operations
into various specific activities or business processes. Then, analysts try to charge for each
activity, these costs can be in the form of time and money. Finally, the analyst converts
the cost data into information by looking for competitive cost strengths and weaknesses
that might result in competitive advantages or weaknesses.
Benchmarking (benchmarking)
Benchmarking is an analytical tool used to determine whether a company's value

chain activities are competitive when compared to competitors and, thus, conducive and
win market share. Benchmarking involves assessing cross-industry value chain activities
to determine "best practices" among competing companies with a view to duplicating or
optimizing these best practices. The most difficult part of the benchmark is how to get
access to the value chain activities of other companies that are related to costs. Common
sources used for benchmarking information include published reports, trade publications,
suppliers, distributors, consumers, partners, creditors, shareholders, lobbyists,
F. STRATEGY EXAMINATION (STRATEGIC AUDIT)
There are various techniques that can be used by company management to carry out
environmental analysis. Some of them :
46
1. External Factor Evaluation (EFE) matrix and Internal Factor Evaluation (IFE) matrix.
(SWOT Analysis).
2. Environment Scanning, there are 3 main forms:
a. Irregular Scanning Systems: this system is used when an environmental crisis
occurs where the main focus is on things that have already happened.
Emphasized to overcome short-term crises.
b. Regular Scanning Systems: This system carries out regular analysis above
significant environment. Usually this analysis is scheduled per semester in a
review.
c. Continuous Scanning Systems: These systems are constantly monitored
environmental component.
3. Environmental Forecasting: this technique is the process of determining what
conditions might arise in the organization's environment in the future.
 TOWS / SWOT matrix
The Threats-Opportunities-Weaknesses-Strengths (TOWS) matrix is an

important matching tool to help managers develop four types of strategies. The four
types of strategies in question are: SO (Strength-Opportunity) Strategy, WO
(Weakness-Opportunity) Strategy, ST (Strength-Threat) Strategy, and WT
(Weakness-Threat) Strategy.
The SWOT matrix requires key success factors. In this matrix, determining
key success factors for the external and internal environment is a difficult part so good
judgment is needed. Meanwhile, none of the matching tools is considered the best.
 Internal Factors Strategic - (IFAS).
Internal Factor Evaluation (IFE Matrix) is the final step in carrying out an
internal strategic management audit. IFE Matrix provides important information for
strategy formulation. This strategy formulation tool summarizes and evaluates key
strengths and weaknesses in functional areas of the business, and also becomes the
basis for identifying and evaluating relationships between those areas.
47
Intuitive assessments are used in the development of the IFE Matrix, so that its
scientific appearance should not be interpreted as evidence that this technique is truly
without gaps (Fred R, 2009). A thorough understanding of the factors included is
more important than the figures. Within a multidimensional company, each division
or an autonomous strategic business unit is even possible to compile an IFE Matrix.
These divisional matrices can then be integrated to develop a corporate IFEMatrix.
G. EVALUATION MATRIX OF FACTORS INTERNAL
Internal Factor Evaluation (IFE Matrix), used to determine the company's internal
factors related to strengths and weaknesses that are considered important. Data and
information on the company's internal aspects can be extracted from several functional
companies, for example from aspects of management, finance, human resources,
marketing, information systems, production and operations.
The Internal Factor Evaluation Matrix can be developed in 5 steps:
1. Make a list of the main internal factors. Enter 10 to 20 internal factors, including
organizational strengths and weaknesses. Register first the strengths, then
weaknesses. Be as specific as possible with
use percentages, ratios, comparisons if possible.
2. Give each of these factors a weight ranging from 0.0 (not important) to 1.0 (all
important). The weight given to a particular factor
signifying the relative significance of the factor.
3. Rank between 1 and 4 for each to indicate whether
these factors are very weak (rank = 1), weak (rank = 2), strong (rank = 3) or very
strong (rank = 4)
4. Multiply the weight of each factor by its ranking to determine the weight score
for each variable
5. Add up the average scores for each variable to determine the total weighting score
for the organization.
48
Example of an Internal Factor Evaluation Matrix for Garuda Indonesia Aviation
Companies
Main Internal Factors Bobo Rating t Weig
Power
t ht
 The biggest airline in Indonesia 0.20 4 0.80
Score
s
 Garuda currently operates 89 aircraft 0.10 4 0.40
 Garuda has 36 flight routes 0.07 4 0.28

domestic and 26 international routes until 2010
 Garuda Indonesia have 0.05 4 0.20

characteristic typical
alone compared with airline
another flight
 The presence of new Citilink products as a 0.05 4 0.20
new idea from Garuda, to meet market

Garuda is very dependent on the automation 0.04 3 0.12
demand for products for prices
system in doing business so that if a system
low ticket
error occurs, on Board" service,
 "Immigration 0.05 4 0.20
the company's business processes will be
namely the visa service on the plane
disrupted
 Garuda Indonesia's
The company market
has or sharetoinhave
continues the market 0.05
a deficit 0.02
4
2
0.20
0.04
International reach 23.2%
in working capital in the future
 Having the latest information 0.04 32 0.12
High operational costs cause technology 0.10 0.20
 Flight ticket
Garuda prices
Indonesia areahigher
does lot of compared
activities to 0.04 3 0.12
other(Corporate
CSR airlines Social Responsibility).
Total
 Garuda Indonesia is included in the category 1
0.05 3 3.52
0.15
good for corporate governance
 Garuda Indonesia already has a brand 0.07 4 0.28
strong and has been recognized in the domestic
market
Weakness
 There are technical factors and flight 0.05 3 0.15

operations such as limitations
the number of cockpit and cabincrewso that
49
cause flight delays
 High levels of current debt 0.02 3 0.06
CONCLUSION
Internal strengths / weaknesses are combined with external threats / opportunities and clear
company mission, the basis for setting goals and strategies. This is done to utilize internal strengths &
overcome weaknesses. The strength of a company that cannot be easily matched or imitated by
competitors is called distinctive competencies. Robert Grant concluded that internal audit was more
important by saying:
MATERIAL QUESTIONS AND ANSWERS 4:

1. Why do we need to conduct an internal audit in the form of a resource-based review approach?
(pg 82)
Answer:
The resource-based review approach states that some internal resources are more important to the
company than external factors in achieving and continuing competitive advantage. Internal resources
can be grouped into three categories which cover them all; physical resources (factories, technology
tools ...), human resources (employees, trainers, expertise, abilities ...) and organizational resources
(companies, trademarks, copyrights ...)
2. Mention 7 marketing functions! (pg. 90)
Answer:
• Customer analysis
• Selling products and services
• Product and service planning
• Price
• Distribution
• Marketing research
• Analysis of opportunities
3. Explain the reasons why measuring individual performance is often done ineffectively! (pg 89)
Answer:
Some reasons are that evaluation can create confrontations that most managers avoid, can spend
more time than expected by managers, and require abilities that many managers do not have
50
BIBLIOGRAPHY
David, Fred R. 2011. Strategic Management Book 1 Edition 12. Jakarta:
Salemba Empat Publisher

https://liarpp.wordpress.com/2012/11/10/analysis-swot-and-matriks-ife-efe-garuda-indonesia/
Wheelen Thomas L and J David Hunger, 2003, Strategic Management and Business Policy,
8th Edition, New Jersey, Prentice Hall.
51
MATERIAL 5 : UNDERSTANDING AND ABLE TO IMPLEMENT THE BSC IN
FORM OF CASE STUDY
Definition of Balanced Scorecard
There are several definitions of the Balanced scorecard presented by experts asfollowing.
1. Hansen and Mowen
Balance scorecard (strategic-based responsibility accounting system) is a responsibility accounting

system objectives and measures for four different perspective: the financial perpective, the customer
perspective, the process perspective, and the learning and growth (infrastructure) perspective.
2. Hilton,Maher,and Selto
Balanced scorecard is causal model of lead and lag indicators of performance that demonstrate how
changes in one operation cause are balanced by changes in others.
3. Morse,Davis,and Hartgraves
Balanced scorecard is a performance measuresement system that include financial and operational
measures which are relatef to the organizational goals. The basic premise is to establish a set of
indicators that can be used to monitor performance progress and then compare the goals that are
setablished with the results.
Edward J. Blocker, Kung A Chen & Thomas W. Lin
Balanced scorecard is an accounting report that include the firm critical success factors in four area
bellows.
Financial Performance
Customer Satisfaction
InternalBusiness Process
From these four experts, one can conclude that the understanding of BalancedA scorecard is an
accounting report that includes four success factors, vizfinance, consumers, internal company, and the
existence of innovation and learningdone by the company. Expected by the application of the
Balanced Scorecard systema better performance result will be obtained.
customer perspective ( Customer Perspective ), internal business process perspective (internal

perpective process), and learning and growth perspective ( learning and growth (infrastructure)
perspective).
52
In the balanced scorecard approach , the emphasis is on the improvementContinuity ( continuous
improvement) is not just achieving specific goals such asprofit of several billion rupiah. If an
organization does not make improvementscontinuously, the organization might be unable to compete.
Benchmark whichused in the Balanced scorecard consisting of 4 groups above can bedescribed as
follows.
Characteristics of the Balanced Scorecard
The balanced scorecard is a strategic management system or more appropriatecalled a " Strategic
based responsibility accounting system " that describes
mission and strategy of an organization into operational objectives and performance benchmarks
forfour different perspectives, namely financial perspective ( Financial Perspective ), perspective
customer ( Customer Perspective ), internal business process perspective ( internal
Figure 1 Balanced Scorecard Provides a Framework for Outlining
Strategy into Operational Terms
Figure 2 From Strategy to Performance Measurement, Balanced ScorecardManagers

must carefully choose performance benchmarks for the Balanced scorecardcompany. First,
performance benchmarks must be consistent with the company's strategy. Second,The
scorecard should not have too many performance benchmarks. Ifthe organization as a whole
has a balanced sorecard as a whole, everythe responsible individual will have their own
personal scorecardtoo. This scorecard will consist of individual things that can be personally
directly affect the performance benchmarks on the Balanced Scorecardoverall.
Developing a Balanced Scorecard includes a process specifically designed a stategic

management measurement system. The process starts with doingpreliminary assessment of the
overall business strategy with a focus on integrationoverall economic process. After the
process, overall goals and objectivesidentified, benchmarks that are believed to best contain
the essence of progressthe organization against the goals and objectives must be chosen.
The Four Balanced Scorecard Perspectives
The four perspectives presented above are discussed as follows.
1. Customer Perspective
The customer perspective is focused on how the organization pays attention to its customers
in order to succeed. Knowing customers and their expectations is not enough. An organizationalso
must provide incentives for managers and employees who can fulfill them
customer expectations. Bill Mariot said, " Take care of your employees and they takecare of your
customer ".
Companies, among others, use the following performance benchmarks, on timeconsider the
customer's perspective.
53
customer satisfaction
customerretention
Retention of customers (customer retention);
Market share ( market share); andCustomer profitability.
Customer satisfaction benchmarks indicate whether the company meets expectationscustomers or

even make them happy. Customer retention or loyalty benchmarksshows how well the company is
trying to keep its customers.
2. Learning and Growth Perspectives
For incentive purposes, the learning and growth perspective focuses onhuman ability. The key
yardstick for assessing manager's performance is satisfactionemployees, employee retention, and
employee productivity. Employee satisfaction acknowledgedthat employee morale is important to
improve productivity, quality, satisfactioncustomers, and responsiveness to situations.
Employee retention recognizes that employees develop special intellectual capital
organization and is a non-financial asset that is of value to the company. Productivity
employees recognize the importance of output per employee, outputs can be measured in a sense
physical benchmarks such as pages produced, or in financial benchmarks, such as
income per employee, profit per employee.
3. Financial Perspectives
The balanced scorecard uses financial performance benchmarks, such as net income and ROI
( Return On Investment ) because these benchmarks are generally used inprofit-making organization.
Financial benchmarks provide a common language foranalyze and compare companies.Financial
benchmarks are important. However, it is not enough to direct performance withincreate value
( value). Non-financial benchmarks are also not sufficient to statethe figure below ( bottom line) .
Balanced scorecard, looking for a balance of multiple performance benchmarks — both financial and
nonfinancial to driveorganizational performance to success.
4. Internal Business Perspective and Production ProcessEmployees who do work are the best source
of new ideas forbetter business processes. Supplier relationships are critical to success,especially in
retail and manufacturing manufacturing. The company can stop
produce if there is a problem with the supplier.Customers value the goods and services received as
reliable and timely.Suppliers can satisfy customers if they hold the amount of inventory
________________________________________
much to make sure that the items are available at hand. To avoidexcessive inventory, a possible
alternative is to make suppliers reducethroughput time . Throughput time is the total time from the
54
time an order is receivedby the company until the customer receives the product. Shortenthroughput
time can be useful if the customer wants goods and services immediatelymaybe.
Strategies in Applying BSC
For example, a company may specify a purpose ( objective ) increase revenue by introducing new
products. Performance benchmarks( performance measure) is probably the percentage of sales
revenue from salesnew product. Targets or standards for the coming year for possible
benchmarks20%, i.e. 20% of total revenue for the coming year must come fromsale of new products.
Initiatives describe how that was achieved. Term"How" certainly includes the other three
perspectives. Other companies mustidentify customer segments, internal processes, and individual
capabilities andorganization that enables the realization of income growth goals. That matterhows the
fact that financial goals serve as a focus for goals, benchmarks,and initiatives and the other three
perspectives.
Strategy Outline Process
For example, a company may specify a purpose ( objective )strategies in Applying BSC
For example, a company may specify a purpose ( objective ) increase revenue by introducing new
products. Performance benchmarks( performance measure) is probably the percentage of sales
revenue from salesnew product. Targets or standards for the coming year for possible
benchmarks20%, i.e. 20% of total revenue for the coming year must come from
sale of new products. Initiatives describe how that was achieved. Term"How" certainly includes the
other three perspectives. Other companies must identify customer segments, internal processes, and
individual capabilities andorganization that enables the realization of income growth goals. That
mattershows the fact that financial goals serve as a focus for goals, benchmarks,and initiatives and the
other three perspectives.
Strategy Outline ProcessFor example, a company may specify a purpose ( objective )
Picture H Figure 5 causal relationship of four BSC perspectives
Key Success Factor
Critical Success Factors
Critical success factors are important benchmarks of aspects of company performance
for competitive advantage and cause for success. Management system
strategic costs develop strategic information that includes information
financial and non-financial nature. In the past, companies tend to focus
especially on financial performance measures, such as sales and profit growth, cash flow,
and inventory value. Instead, companies in a contemporary business environment
use strategic management to focus primarily on operational measures

55
which are non-financial, such as market share, product quality, customer satisfaction, and
growth opportunity. Financial measures show the impact of policies and procedures
company in the short-term corporate financial position. Therefore, too
provide short-term returns for shareholders. Otherwise,
non-financial factors indicate the company's competitive position at this timeand the future which is a
measure viewed from three anglespoint of view
(a) Customer; (b) Internal business processes; and (c) Innovation and learning, for example
human Resources. Strategic measures that are financial and non-financial in nature, usually
called the critical success key.
Balanced scorecard is an action plan that is the basis for
implementing the strategies demonstrated by Critical Success Factors (CSFs).Each group of CSFs in
the Balanced Scorecard summarizes the company's performance as a whole overall for its strategic
objectives as shown below.
Figure Balanced Scorecard Provides an Action Plan for Achievement
Competitive Success by Focusing Attention on CSFs at Four
Key Field
The balanced scorecard is a competitive measure if all CSFs are includedcontribute to competitive
success. Therefore, BalancedThe scorecard helps managers to focus on corporate CSFs and reduce
themviews that only pay attention to earnings that are often found in reportsaccounting based solely
on financial results. Balanced scorecard tooprovide foresight if CSFs are non-financial, such as
quality andservice measures, which achieved good benefits in the futurecome.
Implementasi Balanced Scorecard
Management must define the organization’s primaryobjectives.
The organization must understand how stakeholders and processes contribute to its primary
objectives.
The organization must develop a set of secondary objectives that are the drives of performance on
primaryobjectives.
The organization must develop a set of measures to monitor performance on both primary and
secondaryobjectives.
the organization must develop a set of processes, along with their attendant implicit and explicit
contracts with stakeholders, to achieve those primaryobjectives.
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The organization must make specific and, therefore, public statements about its beliefs concerning
how processes createresults.
CONCLUSION
From these four experts, one can conclude that the understanding of BalancedA
scorecard is an accounting report that includes four success factors, vizfinance, consumers,
internal company, and the existence of innovation and learningdone by the company.
Expected by the application of the Balanced Scorecard systema better performance result will
be obtained. customer perspective (Customer Perspective), internal business process
perspective (internal perpective process), and learning and growth perspective ( learning and
growth (infrastructure) perspective).
In the balanced scorecard approach , the emphasis is on the improvementContinuity
(continuous improvement) is not just achieving specific goals such asprofit of several billion
rupiah. If an organization does not make improvementscontinuously, the organization might
be unable to compete. Benchmark whichused in the Balanced scorecard consisting of 4 groups
above can bedescribed asfollows.
QUESTIONS AND ANSWERS MATERIAL 5

1. Why Does the Business World Need a Balancescorecard?
answer:
The Balance Scorecard provides executives with a comprehensive framework for translating
the company's vision and strategy into an integrated set of performance measures. Many
companies have adopted misis statements to communicate the company's fundamental values
and beliefs to all workers. The mission statement must be inspirational. The statements must
give the company energy or motivation. BSC translates mission and strategy into various
goals and measures arranged in four perspectives
2. What do you know about our material?
answer:
Balanced scorecard is a strategic management system or more accurately called a "Strategic
based responsibility accounting system" which describes the mission and strategy of an
organization into operational objectives and performance benchmarks for four different
perspectives, namely financial perspective (Financial Perspective), customer perspective
( Customer Perspective), internal business process perspective (internal business process
perspective), and learning and growth (infrastructure) perspective.
3. What are the links between Financial Objectives and Business Unit Strategy.
Answer:
Financial objectives may be very different for each stage of the business life cycle. Business
strategy theory offers several different strategies that can be followed by business units from
aggressive market share growth to business consolidation, outflows and liquidation. To
simplify, there are 3 stages:
• Growth
• Survive (Sustain)
• Harvest (Harvest)
4. Why do we need a Customer Perspective?
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Answer:
The customer perspective allows the company to align various sizes of important
customers such as satisfaction, loyalty, retention, acquisition, and profitability with customers
and target market segments and to identify and measure, explicitly, the value proposition the
company will provide to customers and target markets. This perspective is very central,
because without customers, how can a company stand?
BIBLIOGRAPHY
Abernstein, Leopold. 1998. Financial Statement Analysis: Theory Application and
Interpretation.
4th Ed. Illionis: Richard D Irwin Inc.
Antony, Robert N. and Vijay Govidarajan. 2003. Management Control System. 10th Ed.
Boston Irwin: McGrow-Hill.
Marciello, Joseph and Calvin J.Kirby. 1998. Management Control System: Using, Adaptive
System to Attain Control. 2nd Ed. Englewwod Cliffs, New Jersey: Prentice Hall Inc.
Piarce II, John A and Richard B Robinson. 1997. Strategic Management: Formulation,
Implementation, and Control. 6th Ed.
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MATERIAL 6 : BALDRIDGE PERFORMANCE EXCELLENT
Get to know Malcolm Baldrige Performance Excellence Criteria
Optimizing the quality and performance of teams in a company has long been a special concern of
corporate leaders since the mid 1980s.
Many leaders in both industrial and government companies see that they need quality optimization in
order to continue to develop in a world market full of demands and strong competitors.
Until finally, America created a standard of performance excellence named Malcolm Baldrige
Performance Excellence Criteria. These criteria are a standard of performance excellence that will
help companies in America achieve world-class quality.
Being a pioneer in the company's performance excellence standards, Malcolm Baldrige Performance
Excellence Criteria has evolved and is now a worldwide reference in setting superior performance
standards within the company.
In the type of business that is currently developing, Malcolm Baldrige Performance Excellence
Criteria helps companies to grow through challenges such as the challenges of openness,
transparency, creating value for companies and customers as well as the challenges to innovate
quickly and utilize scientific assets.
Malcolm Baldrige Performance Excellence Criteria is considered important because this standard
criterion is the most comprehensive management framework of all available frameworks.
With this criterion standard, leaders will be able to understand all internal and external forces in
moving their business and company.
In addition, Baldrige also helps companies around the world to improve their performance, referring
to what is the most crucial thing that can help companies achieve success.
As well as choosing what actions are able to produce achievement, improvement and maintain
company performance so that it continues to grow as best as possible.
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The Importance of Malcolm Baldrige Performance Excellence Criteria
Malcolm Baldrige Performance Excellence Criteria is designed to assist companies in improving

company performance management.
In addition, this criterion also has important values that are oriented towards good results and creating
actions for feedback (feed back) such as:
1. Leadership that has a vision and mission vision
2. Customer-driven excellence
3. Organizational and personal learning
4. Respect the workforce and partners
5. Speed
6. Focus on the future
7. Managing Innovation
8. Fact Based Management
9. Community Responsibility
10. Focus on results and value creation
11. Systematic Perspective
 first, Visionary Leadership
This value is related to how senior leaders guide the company in establishing and disseminating
corporate values, determining company direction, performance expectations, focusing on customers
and other stakeholders, creating a climate of innovation, empowerment and learning. Also how
companies implement Good Corporate Governance (GCG) and social responsibility, with indicators
such as fiscal accountability (internal and external), ethical behavior, the level of stakeholder
confidence in company management, and support for key communities.
 Second, Customer-Driven Excellence.
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Value and customer satisfaction are influenced by many factors ranging from purchasing experience,
ownership, and service received. The quality and performance of the company will therefore be
assessed by customers. Therefore we must be responsible so that the features and characteristics of
products and services can contribute to customer value. Therefore, our focus on the market and
customers and knowledge of the market and customers need to be improved. This will show how we
understand the voice of the market and customers, how we build relationships to obtain, satisfy and
retain customers, handle complaints, and develop new opportunities. We all need to continuously
improve this.
 Third, Organizational and Personal Learning.
Organizational learning includes continuous improvement of existing approaches and adaptation to

change, leading to new goals and / or new approaches. Learning is the only way for us to continue to
improve competence. This will be very useful to increase value to customers, reduce errors, defects,
and waste and can create new business opportunities.
This learning program needs to be strongly attached to the way the company operates. This means:
(1) learning must be part of daily work,
(2) must be practiced by all people and all work units,
(3) learning is done directly at the source or root cause of the problem,
(4) learning focuses on the dissemination or sharing of knowledge throughout the organization, and
(5) learning is encouraged to be able to significantly influence change in order to work better.
Learning resources can be in the form of creative ideas from employees, research and development,
customer input and dissemination of best work practices, and benchmarking.
 Four, Valuing Employees and Partners.
The success of the company will also depend greatly on increasing the knowledge, skills, creativity,
and motivation of employees and work partners.
 Five, Agility
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Success in winning in this hypercompetitive market does require agility, which is a capacity to be
able to change quickly and flexibility. This clearly requires a simpler organizational structure and
bureaucratization in the decision making process, while also requiring competent employees who
possess multifunctional skills gained through cross-functional and empowered training. Some values
that we must continue to improve on, include our lack of appreciation for values and for time. This
can result in the way we work that is less professional, such as: slow, reactive, do not care about
efficiency, indifference, do not want to know, and it's all up to fate.
 Six, Focus on the Future.
This means it requires understanding of the short-term and long-term factors that affect business and
markets. The company's vision clearly requires a very strong orientation to the future and a desire to
provide long-term commitment to key stakeholders.
 Seven, Managing for Innovation.
Companies must be managed and directed so that innovation becomes part of the work culture and
integrated into everyday work.Innovation can be interpreted here as meaningful changes to improve
the products, services, and processes of the organization and create new values for stakeholders.
These innovations will lead organizations to a new dimension of our performance, and relate to all
important aspects of the organization as a whole.
 Eight, Management by Fact.
Success or failure of the company needs to be measured and analyzed the results, which will provide
important data and information about key processes, outputs, and business results. This performance
measurement will include customers, products, and service performance; operational, market, and
competitive performance comparisons; and suppliers, employees, costs and finance.
 Nine, Public Responsibility and Citizenship.
Organizational leaders must emphasize their responsibilities to the public and need to practice good
citizenship behavior. Effective planning must be able to prevent the cause of the problem, provide a
quick response if a problem occurs, and make information always available and support and maintain
public awareness, safety and trust in the company.
 Ten, Focus on Result and Creating Value.
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The measurement of company performance needs to focus on key results to create and balance value
for stakeholders - customers, employees, suppliers and partners, shareholders, and the community.
 Eleven, Systems Perspective.
The MBPE criterion provides a system perspective for managing a company towards performance
excellence. The system perspective means managing the company as a whole, as well as its
components, towards excellence and success.
Based on a careful review of the 20 companies that have the highest score for this MBPE criterion, it
is concluded that there are 6 key factors with a very large contribution to improving the performance
or excellence of company performance, including:
(1) customer focus,
(2) senior management leadership,
(3) employee involvement and empowerment,
(4) open company culture,
(5) decision making based on facts, and
(6) partnerships with suppliers.
Its application is in the Indonesian BUMN.
Indonesia is one of the many countries in the world to adopt Malcolm Baldrige Performance
Excellent Criteria as a benchmark for company performance standards, especially in state-owned
companies. Under the name Superior Performance Assessment Criteria (KPKU), the Ministry of
SOEs in Indonesia has established these criteria as guidelines for managing and improving BUMN
performance since 2012. Referring to Malcolm Baldrige Performance Excellent Criteria, KPKU's
assessment has the main objective of determining high competitiveness and assess the company's
internal strength. In 2019, the Indonesian government also expects an increase in SOE companies that
get the title of Good Performance from the results of their performance evaluation based on KPKU as
many as 75 BUMN companies.
CONCLUSION
Being a pioneer in the company's performance excellence standards, Malcolm

Baldrige Performance Excellence Criteria has evolved and is now a worldwide reference in
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setting superior performance standards within the company. In the type of business that is
currently developing, Malcolm Baldrige Performance Excellence Criteria helps companies to
grow through challenges such as the challenges of openness, transparency, creating value for
companies and customers as well as the challenges to innovate quickly and utilize scientific
assets.
Malcolm Baldrige Performance Excellence Criteria is considered important because

this standard criterion is the most comprehensive management framework of all available
frameworks. With this criterion standard, leaders will be able to understand all internal and
external forces in moving their business and company.In addition, Baldrige also helps
companies around the world to improve their performance, referring to what is the most
crucial thing that can help companies achieve success. As well as choosing what actions are
able to produce achievement, improvement and maintain company performance so that it
continues to grow as best as possible.
1. Name five reasons why the Baldrige Criteria approach has advantages compared to the
others!
ANSWER:
1. Baldrige's criteria provide a framework for efforts to improve performance without being
"dictating
2. Baldrige's criteria are inclusive.
3. Baldrige's criteria focus on general requirements, not just procedures, "tools", or techniques
4. Baldrige criteria "adaptable".
5. Baldrige's criteria excel in validated management practices.
2. Mention 6 key factors that greatly contribute to improving the performance or performance
excellence of the company!
ANSWER:
(1) customer focus,
(2) senior management leadership,

64
(3) employee involvement and empowerment,
(4) open company culture,
(5) decision making based on facts, and
(6) partnerships with suppliers.
3. How does an organization implement Organizational and Personal Learning?
(1) learning must be part of daily work,
(2) must be practiced by all people and all work units,
(3) learning is done directly at the source or root cause of the problem,
(4) learning focuses on the dissemination or sharing of knowledge throughout the

organization, and
(5) learning is encouraged to be able to significantly influence change in order to work better.
4. Explain the meaning of Focus on the Future!
Answer: This means it requires understanding of the short-term and long-term factors that
affect the business and market. The company's vision clearly requires a very strong orientation
to the future and a desire to provide long-term commitment to key stakeholders.
BIBLIOGRAPHY
Mariza, I. (2003). Pengukuran Kinerja Dengan Balanced Scorecard. The Winners, 4(2), 127.
https://doi.org/10.21512/tw.v4i2.3815
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MATERIAL7 : UNDERSTANDING THE BASIC CONCEPT AND DESCRIPTION OF
LEAN-SIX SIGMA IMPLEMENTATION
Six Sigma was first introduced by Motorola in 1987 by an Engineer named Bill Smith. So the
initiator of Six Sigma is Motorola.
1. Definition of Six Sigma
Six Sigma is a method that focuses on improving quality, SIX SIGMA comes from the word SIX
which means 6 and SIGMA which is a unit of Standard Deviation symbolized by the symbol σ. Six
Sigma is also often symbolized as 6σ.
1.1 Definition of Six Sigma
Six Sigma is a method that focuses on improving quality (that is, reducing waste) by helping
organizations produce products, services that are better, faster, and cheaper.
The basic concept of Six Sigma originally came from a combination of TQM (Total Quality
Management) and Statistical Process Control (SPC) concepts. Now Six Sigma becomes a
management system.
Following are some of the management system strategies used in Six Sigma:
• Customer Focused, Focus on Customer Satisfaction and Needs
• Reduce Defect, Reduces the level of disability
• Center around Target, revolves around the Target Center
• Reduce Variation, Reduce Variation
Judging from the understanding of Six Sigma, it can be said if this method focuses on quality. This
method is a strict, focused, and very effective implementation in the application of proven quality
principles and techniques.
That's what makes Motorola known throughout the world as a brand that has high quality. Motorola
also won the Malcolm Baldrige National Quality Award in 1988.
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1.2 What is Lean Six Sigma?
Lean Six Sigma is a data-driven philosophy of improvement driven by facts that assess defect
prevention from defect detection. This encourages customer satisfaction and bottom line results by
reducing variation, waste, and cycle time, while promoting the use of work standardization and flow,
thereby creating a competitive advantage. That applies wherever variation and waste exists, and every
employee must be involved.
So the difference is that Six Sigma focuses on reducing process variations and improving process
control, according to the explanation of the strategy. while Lean is eliminating processes and
procedureswhich does not add value and promotes standardization and work flow.
2. Position in Six Sigma
A very powerful feature of Six Sigma is the creation of infrastructure to ensure that performance
improvement activities have the necessary resources. There are levels of position in this Management
System. The following are the levels of positions in the Management SystemSix Sigma :
2.1. Champion / Sponsor (Top Management)

Responsible for coordinating the business roadmap to achieve 6σ. Select projects, exercise control,
and reduce obstacles to 6σ projects in their area of responsibility.
• Become a mentor for experts 6σ.
• Identify key business processes where breakthrough technology is best used.
• Identifying candidate Expert 6σ.
• Provide financial and organizational resources to train and equip experts to identify and achieve
stretching targets.
• Agree on metrics for managing and tracking progress.
• Recognize and reward success.
• Spread the success of changing corporate culture in general.
2.2. Master Black Belt

Master Black Belt Is a Black Belt mentor and others in the organization. The goal is to bring a broad
organization to the required level of competency 6σ.
This is the highest level of technical and organizational skills. Because the Black Belt Master trains
the Black Belt, they must know everything that the Black Belt knows, and understand the
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mathematical theory that forms the basis of statistical methods.
The master must be able to help the Black Belt that is incompatible with the method in unusual
situations. Whenever possible, statistical training must be carried out only with the Master Black Belt.
2.3. Black Belt

Black Belt is the team leader who applies the 6σ methodology to the project. Introducing
methodologies and tools for wider team members and organizations.
• Responsible for leading, implementing and completing projects.
• Teaching team members methodologies and tools 6σ.
• Helps identify project opportunities and refine project details and scope.
• Report progress to project champions and process owners.
• Transferring knowledge to other Black Belts and organizations.
• Green Belt Mentor.
2.4. Green Belt

Green Belt is tasked with producing a small department project that is focused and successful using a
success strategy.
• Smaller project scope steps
• There are part-time practitioners
• Tends to be functionally specific
• Per potential Black Belt of the future
• Helps cultural change
2.5. Team Members

Participate in the project team. Support project objectives, usually in the context of their existing
responsibilities. It is expected to continue to utilize the 6σ methods and tools learned as part of their
normal work.
2.6. Yellow, White and Other Six Sigma Belts

In addition to the Six Sigma positions mentioned above, there are a number of other colors that
receive some training, but are not expected to lead the Six Sigma team or complete the project. These
belts receive training primarily to enable them to work in Six Sigma support roles as stakeholders.
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3. Stages of DMAIC in Six Sigma
Stages of DMAIC in Six Sigma
There are several stages carried out on Six Sigma in solving problems. Or commonly known as the
DMAIC Method or Stages. Following DMAIC Stages:
3.1 Define
At this stage you have to set goals for Six Sigma improvement activities, at this stage you will select
problems that will be resolved along with costs, benefits and impacts on customers.
At the top level objectives will be the strategic objectives of the organization, such as higher ROI or
market share. At the operational level, the goal setting might be to increase the production department
throughput. Whereas at the project level, the goal may be to reduce the level of defects and improve
results.
3.2 2. Measure
At this stage you will take measurements of the problems that have been defined to be resolved. You
will create valid and reliable metrics to help monitor progress towards the goals set in the previous
step.
So it can be said if at this stage there will be data retrieval which will later be used to Measure the
Characteristics and capabilities of the process to determine what steps should be taken to make
further improvements and improvements.
Because there is data retrieval and processing, so start by determining the current baseline. Use
explorative and descriptive data analysis to help you understand data.
3.3. Analysis
At this stage you will analyze the system to identify how to eliminate the gap between the current
system or process performance and the desired objectives.
So, you must find a solution to solve the problem based on the identified Root Cause. You need
statistical tools to help in the analysis and validation of conclusions or analytic predictive. You can
use Lean Six Sigma to create flow.
3.4. Improve
At this stage you will take corrective actions to the problems that have been identified by conducting
tests and experiments to be able to optimize the solution in solving the problems experienced.
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Here you are required to be a creative person in finding new ways to do things better, cheaper, or
faster. You can use project management and other planning and management tools to implement new
approaches.
3.5. Control
At this stage you will institutionalize an improved system by modifying compensation and incentive
systems, policies, procedures, MRP, budgets, operating instructions and other management systems.
You must also set standards and exercise control and maintain processes that have been improved and
improved.
CONCLUSION
Six Sigma is a method that focuses on improving quality, SIX SIGMA comes from the
word SIX which means 6 and SIGMA which is a unit of Standard Deviation symbolized by the
symbol σ. Six Sigma is also often symbolized as 6σ. Six Sigma is a method that focuses on improving
quality (that is, reducing waste) by helping organizations produce products, services that are better,
faster, and cheaper. The basic concept of Six Sigma originally came from a combination of TQM
(Total Quality Management) and Statistical Process Control (SPC) concepts. Now Six Sigma
becomes a management system.

1. Mention the benefits of lean sixman!
Answer:
After implementing Lean Six Sigma, there are various benefits, including:
• Production costs have decreased.
• Quality is increasing.
• The selling price is increasingly competitive.
• Sales are increasing.
• Customers are increasingly loyal.
• Profit has increased.
• "8 types of waste" are decreasing.
• The process is increasingly lean, there is no hidden factory.
• Employee discipline is increasing.
• There are no work accidents.
• A tidier and cleaner work environment.
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• The working atmosphere is getting more comfortable.
2. explain some of the management system strategies used in Six Sigma!

answer:
• Customer Focused, Focus on Customer Satisfaction and Needs
• Reduce Defect, Reduces the level of disability
• Center around Target, revolves around the Target Center
• Reduce Variation, Reduce Varias.
3. mention and explain the example "of waste!
• answer:
Eight waste is a type or type of waste that occurs in the manufacturing process or service,
namely:
• Transportation, moving goods from one point to another using a tool. There is something that
cannot be avoided, but actually there is something unnecessary. What is unnecessary is in the
form of waste or NVA.
• Inventory / availability of goods. Excessive equality is waste or NVA.
• Movement, in some jobs there is an emphasis on efficient movement because if it makes

excessive movement it will require more time such as doffing on a spinning machine or glueing
the soles of shoes on a flowing production line.
• Waiting, for example waiting for raw materials, waiting for approval is a waste.
• Excessive processes, such as inspection in a laboratory. If the process is very good then surely
inspection is no longer needed.
• Overproduction. Make only a number of ordered products. Producing excessive amounts is

generally caused by many rejects and defects, so the process must be improved.
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• Damaged goods. As a result of the low-ability process many items are damaged. Avoid this
by improving process capability (Process Capability).
• Knowledge and communication that is not connected is a waste because it can cause various
damage
4. Can Six Sigma be applied to a company and what are the benefits of implementing Six
Sigma?
Answer:
Yes, there are several companies that have implemented Six Sigma, such as Allied Signal
(1994, target 5 s: 200), Asea Brown Boveri (1993), General Electric (target 6 s: 2000), Polaroid
(target 6 s: 2001) etc. .  Benefits of implementing Six Sigma for the company: a. Maintain
business continuity Increase Market Retention Customer Retention Increase Profit and Investor
Relations Improve relations with Suppliers b. There is clarity in performance that must be
achieved by every member of the organization.
BIBLIOGRAPHY
Manggala, D. (2005).Six Sigma Secara Sederhana.
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MATERIAL 8 : UNDERSTAND THE DIFFERENT TYPES OF STRATEGIES IN ITS
IMPLEMENTATION
2.1 Definition of Long-Term Goals
A goal is something to be achieved, which can be distinguished as a long term goal, a medium term
and a short term goal.
Long-term goals are long-term goals that are determined as the specific end result an organization
wants to achieve by carrying out its mission. Long term means more than one year. Long-term goals
are also the expected results of implementing certain strategies. Strategy is a series of actions that
must be taken to achieve long-term goals. The time frame for objectives and strategies must be
consistent.
Long-term objectives represent the expected results in following certain strategies. Strategies
represent actions taken to meet long-term goals.
2.2 The Nature of Long-Term Goals
The nature of long-term goals should be quantitative, measurable, realistic, understandable,

challenging, hierarchical, achievable, and aligned between organizational units. Each goal must be
linked to a time frame. Objectives are generally stated in terms, such as asset growth, sales growth,
profitability, market share, degree and nature of diversification, degree and nature of vertical
integration, earnings per share, and social responsibility. Clearly defined goals offer many benefits.
These goals provide direction by expressing expectations, enabling synergy, assisting in evaluations
by presenting standards, setting or setting priorities, reducing uncertainty, minimizing conflict,
stimulating efforts, assisting in the allocation of resources, assisting in designing work, and providing
a basis for making informed decisions. consistent. Objectives provide standards for evaluating
individuals, groups, departments, divisions, and the whole organization.
2.3 Long-term Goals Needed in Organizations
Long-term goals needed in the organization that includes at the corporate, divisional, and functional
levels of all organizations. Examples of frameworks for linking objectives in displaying evaluations
are shown in Table.
Certain organizations must make these guidelines to meet their own needs, but incentives should be
attached to long-term and annual goals. Without long-term goals, the organization will run without
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goals and do not know the end goals. It is hard to imagine an organization or individual being
successful without the goals in mind.
2.4 Types of General Purpose in Organizations
There are two general types of goals in organizations, namely financial goals and strategic objectives.
Financial goals include those associated with income growth, profit growth, higher dividends, greater
profit margins, greater investment returns, greater earnings per share, increasing share prices,
increasing cash flow , etc.
While strategic objectives include things such as greater market share, timely and faster delivery than
competitors, shorter design times than competitors, lower costs than competitors, higher product
quality than competitors, wider geographical scope than competitors, achieving technological
leadership, consistently getting new or improved products for the market in front of competitors and
so on.
Financial goals are best met by focusing first and foremost on strategic objectives that increase the
competitive power and market power of the company.
2.5 Types of Strategies
• Future integration strategies, namely gaining ownership or increasing control over distributors and
retailers. Example: PayPal encourages its services from the site to the store through an agreement
with Discover cards.
• A backward integration strategy, which is seeking ownership or increasing control over the
company's suppliers. Example: Fancy Motels Inc. acquired furniture manufacturing.
• Horizontal integration strategy, i.e. seeking ownership or increasing control over competitors.
Example: GlaxoSmithKline PLC UK acquires Human GenoeSciencesInc for $ 3 billion.
• Market penetration strategy, which is looking for an increasing market share for current products or
services through greater marketing efforts. Example: PepiCo advertises a special edition of the Pepsi
Diet which has a silver bottle along with a Pepsi red and blue logo in the shape of a heart.
• Market development strategies, namely introducing new products or services into new geographical
areas. Example: China Petrochemical buys three Canadian oil companies, Daylight Energy,
Tanganyika Oil, and Syncrude Canada.
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• Product development strategies, which are looking for increased sales to improve current products
or services or develop new ones. Example: General Electric builds commercial jet engine material,
while rival Pratt & Whitney builds newly developed jet engines.
• Related diversification strategies, namely adding new products or services, but still related.
Example: Toy retailer Toys 'R' Us develops a new wifi tablet computer for children (Tabeo for $
149.99).
• The diversification strategy is unrelated, that is adding new products or services, but not related.
Example: IKEA retailer opens a business model chain in Europe.
• Reduction strategies, which are grouping through the reduction of costs and assets to restore the
decline in sales and profits. Example: Callaway Golf deducts 12% of its workforce; Deutsche Bank
AG cut 1,000 jobs from its investment bank segment.
• Release strategy, which is to sell a division or part of the organization. Example: Dean Foods sells
the White Wave-Alpro processed food business.
• Liquidation strategies, i.e. sell company assets, for their real value. Example: Big Sky Farms, one of
the companies producing liquidated pigs.
2.6 Definition of Organizational Generic Strategy
• Basically every company has a business strategy. The term generic strategy was put forward by
Porter. The understanding is an approach to corporate strategy in order to outperform competitors in
similar industries. In practice, after the company knows its generic strategy, the implementation will
be followed up with a more operational strategy determination step.
• General Understanding
Strategy is the process of determining the plans of top leaders who focus on the long-term goals of
the organization, along with the preparation of a way or effort on how to achieve these goals.
• Special Definition
Strategy is an action that is always increasing (incremental) and continuous, and is carried out based
on the perspective of what is expected by customers in the future. Thus, the strategy almost always
starts from what can happen and not starts from what happens. The occurrence of new market
innovation speeds and changes in consumer patterns requires core competencies. Companies need to
find core competencies in the business they do.
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General strategy (generic strategy) is the core idea of how a company can best compete in the market.
Many planners believe that the long-term strategy should be derived from the company's efforts to
seek competitive advantage based on one of three general strategies including:
 Striving to achieve an overall low cost advantage in the industry.
 Strive to create and market unique products for diverse groups of customers through
differentiation.
 Fighting has a special appeal for one or more groups of customers or industrial buyers by focusing
on cost or differentiation.
2.7 Generic Strategy According to Wheelen and Hunger
To explain strategy, Wheelen and Hunger use the concept of General Electric. General Electric states
that in principle the generic strategy is divided into three types, namely:
• Stability Strategy. In principle, this strategy emphasizes not increasing the products, markets, and
functions of other companies, because the company is trying to improve efficiency in all fields in
order to improve performance and profits. This strategy is relatively low risk and is usually done for
products that are in a position of maturity (mature).
• Expansion Strategy. In principle, this strategy emphasizes the addition / expansion of products,
markets, and other company functions, so that the company's activities increase. But, in addition to
the benefits to be achieved greater, this strategy also carries a significant risk of failure.
• Retrenchment Strategy. In principle, this strategy is intended to make a reduction of the products
produced or a reduction in the market and functions in the company, especially those that have
negative cash flow. This strategy is usually applied to businesses that are in decline. This collapse can
occur because the resources that need to be collapsed are better mobilized, for example, for other
businesses that are developing.
If necessary, a combination of the three generic strategies above can also be implemented by the
company.
2.8 Generic Strategy According to Michael R. Porter
According to Porter, if a company wants to increase its business in increasingly fierce competition,
the company must choose the principle of doing business, namely products with high prices or
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products with low prices, not both. Based on this principle, Porter states that there are three generic
strategies, namely:
• Differentiation Strategy. This strategy is characterized by the company's decision to build a

potential market perception of a superior product / service so that it looks different from other
products. Thus, it is expected that potential consumers are willing to buy at high prices because of
this difference.
• Overall Cost Leadership Strategy. The characteristic is that the company takes into account
competitors rather than customers by focusing on low-priced product sales, so that production,
promotion and research costs can be reduced, if necessary the products produced simply mimic
products from other companies.
• Focus Strategy (Focus). The characteristic is that the company concentrates on a small market share
to avoid competitors by using the Comprehensive Cost Leadership strategy or Differentiation.
2.9 Generic Strategy According to Fred R. David
According to Fred R. David, in principle generic strategies can be grouped into four strategy groups,
namely:
• Vertical Integration Strategy. This strategy requires the company to exercise more control over its
distributors, suppliers and / or competitors, for example through mergers, acquisitions or creating
their own companies.
• Intensive Strategy (Intensive Strategy). This strategy requires intensive efforts to improve the
company's competitive position through existing products.
• Diversification Strategy (Diversification Strategy). This strategy is intended to add new products.
This strategy is increasingly less popular, at least in terms of the high level of management
difficulties in controlling the activities of different companies.
• Defensive Strategy. This strategy intends for the company to take rescue actions so that they are free
from greater losses, which in the end is bankruptcy.
CONCLUSION
A goal is something to be achieved, which can be distinguished as a long term goal, a
medium term and a short term goal. Long-term goals are long-term goals that are determined as
the specific end result an organization wants to achieve by carrying out its mission. Long term
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means more than one year. Long-term goals are also the expected results of implementing
certain strategies. Strategy is a series of actions that must be taken to achieve long-term goals.
The time frame for objectives and strategies must be consistent. Long-term objectives represent
the expected results in following certain strategies. Strategies represent actions taken to meet
long-term goals.

1. Explain what is meant by integrity forwards & backward integrity! (pg 128 & 130)
2. Explain why the organization is implementing the Michael porter strategy! (p. 141)
3. Mention and explain 2 general goals in the organization! (p. 124)
4. Explain what margers and acquisitions are and state the reasons why many mergers and
acquisitions fail! (p. 149)
Answer:
1. Forward integration involves the acquisition of ownership or increasing control over
distributors or retailers.
Backward integration is a strategy to seek ownership or increase control over company
suppliers.
2. Because strategy enables organizations to gain competitive advantage from three different
bases: cost leadership, compensation, and focus. Porter named these basics generic
strategies.
A. Leadership that emphasizes cost (cost leadership) emphasizes producing standardized
products at low cost per unit for price sensitive consumers.
B. Differentiation (differentiation), a strategy aimed at producing products or services that are
considered unique in the industry and directed at consumers who are relatively insensitive to
price.
C. Focus (focus), means producing products and services that meet the needs of a small group of
consumers.
3. a. Financial goals include those associated with income growth, labal growth, higher
dividends, greater profit margins, greater investment returns, greater earnings per share,
increasing share prices, increasing cash flow, etc.
c. Strategic objectives include things such as greater market share, on-time delivery and faster
than competitors, shorter design times than competitors.
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4. Merger is 2 companies or organizations that are almost the same or similar to form one
company. While the acquisition is when a large company buys a smaller company, or vice
versa.
Reasons why many mergers and acquisitions fail:
1. Difficulty of integration
2. Inadequate target evaluation
3. Large or extraordinary debt
4. Unable to get synergy
5. Too much diversification
6. Managers are too focused on acquisitions
7. Acquisitions that are too large
8. It is difficult to integrate different organizational cultures
9. Reduced employee capital due to termination of employment and relocation.
BIBLIOGRAPHY
Fred R. David dan Forest R. David. 2019. Manajemen Stratejik: Suatu Pendekatan Keunggulan
Bersaing-Konsep. Jakarta: Salemba Empat.
http://ameliasarisinaga.blogspot.com/2017/05/makalah-strategi-perusahaan.html
http://lestarypermatasari26.blogspot.com/2018/04/longterm-objective-dan-generic.html
http://sukasukafajare.blogspot.com/2016/01/analisis-strategi-perusahaan-pada-pt.html?m=1
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MATERIAL 9 : UNDERSTANDING THE VARIOUS STAGES AND TECHNIQUES OF
ANALYZING AND CHOOSING STRATEGIES
The Nature of Strategy Analysis and Choice
As indicated by Figure 6-1, this chapter focuses on generating and evaluating alternative strategies, as
well as selecting strategies to pursue. Strategy analysis and choice seek to determine alternative
courses of action that could best enable the firm to achieve its mission and objectives. The firm’s
present strategies, objectives, and mission, coupled with the external and internal audit information,
provide a basis for generating and evaluating feasible alternative strategies.
Unless a desperate situation confronts the firm, alternative strategies will likely represent
incremental steps that move the firm from its present position to a desired future position.
Alternative strategies do not come out of the wild blue yonder; they are derived from the firm’s
vision, mission, objectives, external audit, and internal audit; they are consistent with, or build on,
past strategies that have worked well.
The Process of Generating and Selecting Strategies
Strategists never consider all feasible alternatives that could benefit the firm because there are an
infinite number of possible actions and an infinite number of ways to implement those actions.
Therefore, a manageable set of the most attractive alternative strategies must be developed. The
advantages, disadvantages, trade-offs, costs, and benefits of these strategies should be determined.
This section discusses the process that many firms use to determine an appropriate set of alternative
strategies.
Identifying and evaluating alternative strategies should involve many of the managers and
employees who earlier assembled the organizational vision and mission statements, performed the
external audit, and conducted the internal audit. Representatives from each department and division
of the firm should be included in this process, as was the case in previous strategy-formulation
activities. Recall that involvement provides the best opportunity for managers and employees to gain
an understanding of what the firm is doing and why and to become committed to helping the firm
accomplish its objectives.
All participants in the strategy analysis and choice activity should have the firm’s external and
internal audit information by their sides. This information, coupled with the firm’s mission statement,
will help participants crystallize in their own minds particular strategies that they believe could
benefit the firm most. Creativity should be encouraged in this thought process.
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Alternative strategies proposed by participants should be considered and discussed in a meeting or
series of meetings. Proposed strategies should be listed in writing. When all feasible strategies
identified by participants are given and understood, the strategies should be ranked in order of
attractiveness by all participants, with 1 = should not be implemented, 2 = possibly should be
implemented, 3 = probably should be implemented, and 4 = definitely should be implemented. This
process will result in a prioritized list of best strategies that reflects the collective wisdom of the
group
FIGURE 6-1
A Comprehensive Strategic-Management Model
Chapter 10: Business Ethics/Social Responsibility/Environmental

Sustainability Issues
Perform
External
Audit
Chapter 3
Implement
Develop Establish Generate Implement
Strategies— Measure
Vision and Long- , Strategies—
Marketing, and
Mission Term Evaluate Managemen Evaluate
Finance,
Statements Objective , and t Issues Performanc
Accounting,
Chapter 2 s Chapter Select Chapter 7 e
R&D, and MIS
5 Strategie Issues Chapter 8 Chapter 9
s
Perform Chapter
Internal 6
Audit
Chapter 4
Chapter 11: Global/InternationalIssues
A Comprehensive Strategy-Formulation Framework
Important strategy-formulation techniques can be integrated into a three-stage decision- making

framework, as shown in Figure 6-2. The tools presented in this framework are applicable to all sizes
and types of organizations and can help strategists identify, evaluate, and select strategies.
Stage 1 of the formulation framework consists of the EFE Matrix, the IFE Matrix, and the
Competitive Profile Matrix (CPM). Called the Input Stage, Stage 1 summarizes the basic input
information needed to formulate strategies. Stage 2, called the Matching Stage, focuses upon
generating feasible alternative strategies by aligning key external and internal factors. Stage 2
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techniques include the Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic
Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the
Internal-External (IE) Matrix, and the Grand Strategy Matrix. Stage 3, called the Decision Stage,
involves a single technique, the Quantitative Strategic Planning Matrix (QSPM). A QSPM uses input
information from Stage 1 to objectively evaluate feasible alternative strategies identified in Stage 2.
A QSPM reveals the relative attractiveness of alternative strategies and thus provides objective basis
for selecting specific strategies.
FIGURE 6-2
The Strategy-Formulation Analytical Framework
STAGE1:THEINPUTSTAGE
External Factor Competitive Profile Internal Factor
Evaluation (EFE) Evaluation(IFE)
Matrix Matrix (CPM) Matrix
STAGE2:THEMATCHINGSTAGE
Boston Consulting
Strengths-Weaknesses- Strategic Position and Opportunities- Internal-External Grand Strategy
ThreatsActionEvaluation Group (BCG) (IE) Matrix Matrix
(SWOT)Matrix(SPACE)Matrix Matrix
STAGE 3: THE DECISION STAGE
Quantitative Strategic Planning Matrix (QSPM)
All nine techniques included in the strategy-formulation framework require the integration of
intuition and analysis. Autonomous divisions in an organization commonly use strategy-formulation
techniques to develop strategies and objectives. Divisional analyses provide a basis for identifying,
evaluating, and selecting among alternative corporate-level strategies.
Strategists themselves, not analytic tools, are always responsible and accountable for strategic
decisions. Lenz emphasized that the shift from a words-oriented to a numbers- oriented planning
process can give rise to a false sense of certainty; it can reduce dialogue, discussion, and argument as
a means for exploring understandings, testing assumptions, and fostering organizational learning.1
Strategists, therefore, must be wary of this possibility and use analytical tools to facilitate, rather
than to diminish, communication. Without objective information and analysis, personal biases,
politics, emotions, personalities, and halo error (the tendency to put too much weight on a single
factor) unfortunately may play a dominant role in the strategy-formulation process.
The Input Stage
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Procedures for developing an EFE Matrix, an IFE Matrix, and a CPM were presented in Chapters 3
and 4. The information derived from these three matrices provides basic input information for the
matching and decision stage matrices described later in this chapter.
The input tools require strategists to quantify subjectivity during early stages of the strategy-
formulation process. Making small decisions in the input matrices regarding the relative importance
of external and internal factors allows strategists to more effectively generate and evaluate alternative
strategies. Good intuitive judgment is always needed in determining appropriate weights and ratings.
The Matching Stage
Strategy is sometimes defined as the match an organization makes between its internal resources and
skills and the opportunities and risks created by its external factors.2 The matching stage of the
strategy-formulation framework consists of five techniques that can be used in any sequence: the
SWOT Matrix, the SPACE Matrix, the BCG Matrix, the IE Matrix, and the Grand Strategy Matrix.
These tools rely upon information derived from the input stage to match external opportunities and
threats with internal strengths and weaknesses. Matching external and internal critical success factors
is the key to effectively generating feasible alternative strategies. For example, a firm with excess
working capital (an internal strength) could take advantage of the cell phone industry’s
Key Internal Factor Key External Factor Resultant Strategy

Excess working capital (an + 20 percent annual growth in the cell = Acquire Cellfone, Inc.
internal strength) phone industry (an external
opportunity)
Insufficient capacity (an internal + Exit of two major foreign competitors = Pursue horizontal integration by
from buying
weakness) the industry (an external opportunity) competitors’ facilities
Strong R&D expertise (an + Decreasing numbers of younger adults = Develop new products for older
internal (an adults
strength) external threat)
Poor employee morale (an + Rising healthcare costs (an external = Develop a new wellness program
internal threat)
weakness)
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool

that helps managers develop four types of strategies: SO (strengths-opportunities) Strategies, WO
(weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT (weaknesses-threats)
Strategies.3 Matching key external and internal factors is the most difficult part of developing a
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SWOT Matrix and requires good judgment—and there is no one best set of matches. Note in Table 6-
1 that the first, second, third, and fourth strategies are SO, WO, ST, and WT strategies, respectively.
SO Strategies use a firm’s internal strengths to take advantage of external opportunities. All
managers would like their organizations to be in a position in which internal strengths can be used to
take advantage of external trends and events. Organizations generally will pursue WO, ST, or WT
strategies to get into a situation in which they can apply SO Strategies. When a firm has major
weaknesses, it will strive to overcome them and make them strengths. When an organization faces
major threats, it will seek to avoid them to concentrate on opportunities.
WO Strategies aim at improving internal weaknesses by taking advantage of external opportunities.

Sometimes key external opportunities exist, but a firm has internal weaknesses that prevent it from
exploiting those opportunities. For example, there may be a high demand for electronic devices to
control the amount and timing of fuel injection in automobile engines (opportunity), but a certain auto
parts manufacturer may lack the technology required for producing these devices (weakness). One
possible WO Strategy would be to acquire this technology by forming a joint venture with a firm
having competency in this area. An alternative WO Strategy would be to hire and train people with
the required technical capabilities.
ST Strategies use a firm’s strengths to avoid or reduce the impact of external threats. This does not
mean that a strong organization should always meet threats in the external environment head-on. An
example of ST Strategy occurred when Texas Instruments used an excellent legal department (a
strength) to collect nearly $700 million in damages and royalties from nine Japanese and Korean
firms that infringed on patents for semiconductor memory chips (threat).
Rival firms that copy ideas, innovations, and patented products are a major threat in many industries.
This is still a major problem for U.S. firms selling products in China.
WT Strategies are defensive tactics directed at reducing internal weakness and avoid- ing external
threats. An organization faced with numerous external threats and internal weaknesses may indeed be
in a precarious position. In fact, such a firm may have to fight for its survival, merge, retrench,
declare bankruptcy, or choose liquidation.
A schematic representation of the SWOT Matrix is provided in Figure 6-3. Note that a SWOT Matrix
is composed of nine cells. As shown, there are four key factor cells, four strategy cells, and one cell
that is always left blank (the upper-left cell). The four strategy cells, labeled SO, WO, ST, and WT,
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are developed after completing four key factor cells, labeled S, W, O, and T. There are eight steps
involved in constructing a SWOT Matrix:
The Strategic Position and Action Evaluation (SPACE) Matrix
The Strategic Position and Action Evaluation (SPACE) Matrix, another important Stage 2 matching
tool, is illustrated in Figure 6-4. Its four-quadrant framework indicates whether aggressive,
conservative, defensive, or competitive strategies are most appropriate for a given organization. The
axes of the SPACE Matrix represent two internal dimensions (financial position [FP] and competitive
position [CP]) and two external dimensions (stability position [SP] and industry position [IP]). These
four factors are perhaps the most important determinants of an organization’s overall strategic
position.5
Depending on the type of organization, numerous variables could make up each of the dimensions
represented on the axes of the SPACE Matrix. Factors that were included earlier in the firm’s EFE
and IFE Matrices should be considered in developing a SPACE Matrix. Other variables commonly
included are given in Table 6-2. For example, return on investment, leverage, liquidity, working
capital, and cash flow are commonly considered to be determining factors of an organization’s
financial strength. Like the SWOT Matrix, the SPACE Matrix should be both tailored to the
particular organization being studied and based on factual information as much as possible.
The steps required to develop a SPACE Matrix are as follows:
1. Select a set of variables to define financial position (FP), competitive position (CP), stability
position (SP), and industry position (IP).
2. Assign a numerical value ranging from +1 (worst) to +7 (best) to each of the variables that
make up the FP and IP dimensions. Assign a numerical value ranging from -1 (best) to -7
(worst) to each of the variables that make up the SP and CP dimensions. On the FP and CP
axes, make comparison to competitors. On the IP and SP axes, make comparison to other
industries.
3. Compute an average score for FP, CP, IP, and SP by summing the values given to the
variables of each dimension and then by dividing by the number of variables included in the
respective dimension.
4. Plot the average scores for FP, IP, SP, and CP on the appropriate axis in the SPACE Matrix.
5. Add the two scores on the x-axis and plot the resultant point on X. Add the two scores on the
y-axis and plot the resultant point on Y. Plot the intersection of the new xy point.
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6. Draw a directional vector from the origin of the SPACE Matrix through the new intersection
point. This vector reveals the type of strategies recommended for the organization: aggressive,
competitive, defensive, or conservative.
The SPACE Matrix

Conservative FP Aggressive
Marketpenetration +6 Backward,forward,horizontal
Marketdevelopment integration
Productdevelopment +5 Marketpenetration
Relateddiversification Marketdevelopment
+4 Productdevelopment
Diversification (related orunrelated)
+3
+2
+1
–7–6–5–4–3–2–10+1+2+3+4+5+6+7
CP IP
–1
Defensive –2 Competitive
Retrenchment Backward,forward,horizontal
Divestiture –3 integration
Liquidation Marketpenetration
–4 Marketdevelopment
–5 Productdevelopment
–6
–7
The Boston Consulting Group (BCG) Matrix
Autonomous divisions (or profit centers) of an organization make up what is called a business
portfolio. When a firm’s divisions compete in different industries, a separate strategy often must be
developed for each business. The Boston Consulting Group (BCG) Matrix and the Internal-External
(IE) Matrix are designed specifically to enhance a multidivisional firm’s efforts to formulate
strategies. (BCG is a private management consulting firm based in Boston. BCG employs about
4,300 consultants worldwide.)
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The basic BCG Matrix appears in Figure 6-6. Each circle represents a separate division. The size of
the circle corresponds to the proportion of corporate revenue generated by that business unit, and the
pie slice indicates the proportion of corporate profits generated by that division. Divisions located in
Quadrant I of the BCG Matrix are called “Question Marks,” those located in Quadrant II are called
“Stars,” those located in Quadrant III are called “Cash Cows,” and those divisions located in
Quadrant IV are called “Dogs.”
 Question Marks—Divisions in Quadrant I have a low relative market share position, yet they
compete in a high-growth industry. Generally these firms’ cash needs arehigh and their cash
generation is low. These businesses are called Question Marks because the organization must
decide whether to strengthen them by pursuing an intensive strategy (market penetration,
market development, or product development) or to sell them.
 Stars—Quadrant II businesses (Stars) represent the organization’s best long-run opportunities
for growth and profitability. Divisions with a high relative market share and a high industry
growth rate should receive substantial investment to maintain or strengthen their dominant
positions. Forward, backward, and horizontal integration; market penetration; market
development; and product development are appropriate strategies for these divisions to
consider, as indicated in Figure 6-6.
 Cash Cows—Divisions positioned in Quadrant III have a high relative market share position
but compete in a low-growth industry. Called Cash Cows because they generate cash in
excess of their needs, they are often milked. Many of today’s CashCows were yesterday’s
Stars. Cash Cow divisions should be managed to maintain their strong position for as long as
possible. Product development or diversification may be attractive strategies for strong Cash
Cows. However, as a Cash Cow division becomes weak, retrenchment or divestiture can
become more appropriate.
 Dogs—Quadrant IV divisions of the organization have a low relative market share position
and compete in a slow- or no-market-growth industry; they are Dogs in the firm’s portfolio.
Because of their weak internal and external position, these businesses are often liquidated,
divested, or trimmed down through retrenchment. When a division first becomes a Dog,
retrenchment can be the best strategy to pursue because many Dogs have bounced back, after
strenuous asset and cost reduction,to become viable, profitable divisions.
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The Internal-External (IE) Matrix
The Internal-External (IE) Matrix positions an organization’s various divisions in a nine- cell display,
illustrated in Figure 6-9. The IE Matrix is similar to the BCG Matrix in that both tools involve
plotting organization divisions in a schematic diagram; this is why they are both called “portfolio
matrices.” Also, the size of each circle represents the percentage sales contribution of each division,
and pie slices reveal the percentage profit contribution of each division in both the BCG and IE
Matrix.
But there are some important differences between the BCG Matrix and the IE Matrix. First, the axes
are different. Also, the IE Matrix requires more information about the divisions than the BCG
Matrix. Furthermore, the strategic implications of each matrix are different. For these reasons,
strategists in multidivisional firms often develop both the BCG Matrix and the IE Matrix in
formulating alternative strategies. A common practice is to develop a BCG Matrix and an IE Matrix
for the present and then develop projected matrices to reflect expectations of the future. This before-
and-after analysis forecasts the expected effect of strategic decisions on an organization’s portfolio of
division.
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The Grand Strategy Matrix
In addition to the SWOT Matrix, SPACE Matrix, BCG Matrix, and IE Matrix, the Grand Strategy
Matrix has become a popular tool for formulating alternative strategies. All organizations can be
positioned in one of the Grand Strategy Matrix’s four strategy quadrants. A firm’s divisions likewise
could be positioned. As illustrated in Figure 6-12, the Grand Strategy Matrix is based on two
evaluative dimensions: competitive position and market (industry) growth. Any industry whose
annual growth in sales exceeds 5 percent could be considered to have rapid growth. Appropriate
strategies for an organization to consider are listed in sequential order of attractiveness in each
quadrant of the matrix.
RAPIDMARKETGROWT
Quadrant II H Quadrant I
Marketdevelopmen Marketdevelopmen
t t
Marketpenetration Marketpenetration
Productdevelopme Productdevelopme
WEAK nt nt STRONG
COMPETITIV Horizontalintegrati Forwardintegration COMPETITIV
E POSITION on Backwardintegratio E POSITION
Quadrant III
Divestiture Quadrant
n IV
Liquidation
Retrenchment Horizontalintegrati
Relateddiversificatio
Relateddiversificatio non
n Relateddiversificati
Unrelateddiversificati
Unrelateddiversificati on
on
SLOWMARKETGROWT
on H Jointventures
Divestiture
Liquidation
The Decision Stage
Analysis and intuition provide a basis for making strategy-formulation decisions. The matching
techniques just discussed reveal feasible alternative strategies. Many of these strategies will likely
have been proposed by managers and employees participating in the strategy analysis and choice
activity. Any additional strategies resulting from the matching analyses could be discussed and added
to the list of feasible alternative options. As indicated earlier in this chapter, participants could rate
these strategies on a 1 to 4 scale so that a prioritized list of the best strategies could be achieved.
The Quantitative Strategic Planning Matrix (QSPM)
Other than ranking strategies to achieve the prioritized list, there is only one analytical technique in
the literature designed to determine the relative attractiveness of feasible alternative actions. This
technique is the Quantitative Strategic Planning Matrix (QSPM), which comprises Stage 3 of the
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strategy-formulation analytical framework.6 This technique objectively indicates which alternative
strategies are best. The QSPM uses input from Stage 1 analyses and matching results from Stage 2
analyses to decide objectively among alternative strategies. That is, the EFE Matrix, IFE Matrix, and
Competitive Profile Matrix that make up Stage 1, coupled with the SWOT Matrix, SPACE Matrix,
BCG Matrix, IE Matrix, and Grand Strategy Matrix that make up Stage 2, provide the needed
information for setting up the QSPM (Stage 3). The QSPM is a tool that allows strategists to evaluate
alternative strategies objectively, based on previously identified external and internal critical success
factors. Like other strategy-formulation analytical tools, the QSPM requires good intuitive judgment.
A QSPM for a retail computer store is provided in Table 6-7. This example illustrates all the
components of the QSPM: Strategic Alternatives, Key Factors, Weights, Attractiveness Scores (AS),
Total Attractiveness Scores (TAS), and the Sum Total Attractiveness Score. The three new terms just
introduced—(1) Attractiveness Scores, (2) Total Attractiveness Scores, and (3) the Sum Total
Attractiveness Score—are defined and explained as the six steps required to develop a QSPM are
discussed:
Step 1 Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses
in the left column of the QSPM. This information should be taken directly from the EFE Matrix and
IFE Matrix. A minimum of 10 external key success factors and 10 internal key success factors should
be included in the QSPM.
Step 2 Assign weights to each key external and internal factor. These weights are identical to those
in the EFE Matrix and the IFE Matrix. The weights are presented in a straight column just to the right
of the external and internal critical success factors.
Step 3 Examine the Stage 2 (matching) matrices, and identify alternative strategies that the
organization should consider implementing. Record these strategies in the top row of the QSPM.
Group the strategies into mutually exclusive sets if possible.
Step 4 Determine the Attractiveness Scores (AS) defined as numerical values that indicate the
relative attractiveness of each strategy in a given set of alternatives. Attractiveness Scores (AS) are
determined by examining each key external or internal factor, one at a time, and asking the question
“Does this factor affect the choice of strategies being made?” If the answer to this question is yes,
then the strategies should be compared relative to that key factor. Specifically, Attractiveness Scores
should be assigned to each strategy to indicate the relative attractiveness of one strategy over others,
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considering the particular factor. The range for Attractiveness Scores is 1 = not attractive, 2 =
somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive. By attractive, we mean the
extent that one strategy, compared to others, enables the firm to either capitalize on the strength,
improve on the weakness, exploit the opportunity, or avoid the threat. Work row by row in devel-
oping a QSPM. If the answer to the previous question is no, indicating that the respective key factor
has no effect upon the specific choice being made, then do not assign Attractiveness Scores to the
strategies in that set. Use a dash to indicate that the key factor does not affect the choice being made.
Note: If you assign an AS score to one strategy, then assign AS score(s) to the other. In other words,
if one strategy receives a dash, then all others must receive a dash in a given row.
Step 5 Compute the Total Attractiveness Scores. Total Attractiveness Scores (TAS) are defined as the
product of multiplying the weights (Step 2) by the Attractiveness Scores (Step 4) in each row. The
Total Attractiveness Scores indicate the relative attractiveness of each alternative strategy,
considering only the impact of the adjacent external or internal critical success factor. The higher the
Total Attractiveness Score, the more attractive the strategic alternative (considering only the adjacent
critical success factor).
Step 6 Compute the Sum Total Attractiveness Score. Add Total Attractiveness Scores in each
strategy column of the QSPM. The Sum Total Attractiveness Scores (STAS) reveal which strategy is
most attractive in each set of alternatives. Higher scores indicate more attractive strategies,
considering all the relevant external and internal factors that could affect the strategic decisions. The
magnitude of the difference between the Sum Total Attractiveness Scores in a given set of strategic
alternatives indicates the relative desirability of one strategy over another.
Positive Features and Limitations of the QSPM
A positive feature of the QSPM is that sets of strategies can be examined sequentially or
simultaneously. For example, corporate-level strategies could be evaluated first, followed by
division-level strategies, and then function-level strategies. There is no limit to the number of
strategies that can be evaluated or the number of sets of strategies that can be examined at once using
the QSPM.
Another positive feature of the QSPM is that it requires strategists to integrate per- tinent external and
internal factors into the decision process. Developing a QSPM makes it less likely that key factors
will be overlooked or weighted inappropriately. A QSPM draws attention to important relationships
that affect strategy decisions.
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Although developing a QSPM requires a number of subjective decisions, making small decisions
along the way enhances the probability that the final strategic decisions will be best for the
organization. A QSPM can be adapted for use by small and large for-profit and nonprofit
organizations so can be applied to virtually any type of organization. A QSPM can especially
enhance strategic choice in multinational firms because many key factors and strategies can be
considered at once. It also has been applied successfully by a number of small businesses.7
The QSPM is not without some limitations. First, it always requires intuitive judgments and
educated assumptions. The ratings and attractiveness scores require judgmental decisions, even
though they should be based on objective information. Discussion among strategists, managers, and
employees throughout the strategy-formulation process, including development of a QSPM, is
constructive and improves strategic decisions. Constructive discussion during strategy analysis and
choice may arise because of genuine differences of interpretation of information and varying
opinions. Another limitation of the QSPM is that it can be only as good as the prerequisite
information and matching analyses upon which it is based.
Cultural Aspects of Strategy Choice
All organizations have a culture. Culture includes the set of shared values, beliefs, attitudes, customs,
norms, personalities, heroes, and heroines that describe a firm. Culture is the unique way an
organization does business. It is the human dimension that creates solidarity and meaning, and it
inspires commitment and productivity in an organization when strategy changes are made. All human
beings have a basic need to make sense of the world, to feel in control, and to make meaning. When
events threaten meaning, individuals react defensively. Managers and employees may even sabotage
new strategies in an effort to recapture the status quo.
It is beneficial to view strategic management from a cultural perspective because success often rests
upon the degree of support that strategies receive from a firm’s culture. If a firm’s strategies are
supported by cultural products such as values, beliefs, rites, rituals, ceremonies, stories, symbols,
language, heroes, and heroines, then managers often can implement changes swiftly and easily.
However, if a supportive culture does not exist and is not cultivated, then strategy changes may be
ineffective or even counterproductive. A firm’s culture can become antagonistic to new strategies,
and the result of that antago- nism may be confusion and disarray.
Strategies that require fewer cultural changes may be more attractive because extensive changes can
take considerable time and effort. Whenever two firms merge, it becomes especially important to
evaluate and consider culture-strategy linkages.
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Culture provides an explanation for the difficulties a firm encounters when it attempts to shift its
strategic direction, as the following statement explains:
Not only has the “right” corporate culture become the essence and foundation of corporate
excellence, but success or failure of needed corporate reforms hinges on management’s sagacity and
ability to change the firm’s driving culture in time and in tune with required changes in strategies.8
The Politics of Strategy Choice
All organizations are political. Unless managed, political maneuvering consumes valuable time,
subverts organizational objectives, diverts human energy, and results in the loss of some valuable
employees. Sometimes political biases and personal preferences get unduly embedded in strategy
choice decisions. Internal politics affect the choice of strategies in all organizations. The hierarchy of
command in an organization, combined with the career aspirations of different people and the need to
allocate scarce resources, guarantees the formation of coalitions of individuals who strive to take care
of themselves first and the organization second, third, or fourth. Coalitions of individuals often form
around keystrategy issues that face an enterprise. A major responsibility of strategists is to guide the
development of coalitions, to nurture an overall team concept, and to gain the support of key
individuals and groups of individuals.
In the absence of objective analyses, strategy decisions too often are based on the politics of the
moment. With development of improved strategy-formation tools, political factors become less
important in making strategic decisions. In the absence of objectivity, political factors sometimes
dictate strategies, and this is unfortunate. Managing political relationships is an integral part of
building enthusiasm and esprit de corps in an organization.
A classic study of strategic management in nine large corporations examined the political tactics of
successful and unsuccessful strategists.9 Successful strategists were found to let weakly supported
ideas and proposals die through inaction and to establish additional hurdles or tests for strongly
supported ideas considered unacceptable but not openly opposed. Successful strategists kept a low
political profile on unacceptable proposals and strived to let most negative decisions come from
subordinates or a group consensus, thereby reserving their personal vetoes for big issues and crucial
moments. Successful strategists did a lot of chatting and informal questioning to stay abreast of how
things were progressing and to know when to intervene. They led strategy but did not dictate it. They
gave few orders, announced few decisions, depended heavily on informal questioning, and sought to
probe and clarify until a consensus emerged.
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Successful strategists generously and visibly rewarded key thrusts that succeeded. They assigned
responsibility for major new thrusts to champions, the individuals most strongly identified with the
idea or product and whose futures were linked to its success. They stayed alert to the symbolic impact
of their own actions and statements so as not to send false signals that could stimulate movements in
unwanted directions.
Successful strategists ensured that all major power bases within an organization were represented in,
or had access to, top management. They interjected new faces and new views into considerations of
major changes. This is important because new employees and managers generally have more
enthusiasm and drive than employees who have been with the firm a long time. New employees do
not see the world the same old way; nor do they act as screens against changes. Successful strategists
minimized their own political expo- sure on highly controversial issues and in circumstances in which
major opposition from key power centers was likely. In combination, these findings provide a basis
for managing political relationships in an organization.
Because strategies must be effective in the marketplace and capable of gaining internal commitment,
the following tactics used by politicians for centuries can aid strategists:
 Equifinality—It is often possible to achieve similar results using different means or paths.
Strategists should recognize that achieving a successful outcome is more important than
imposing the method of achieving it. It may be possible to generate new alternatives that give
equal results but with far greater potential for gaining commitment.
 Satisfying—Achieving satisfactory results with an acceptable strategy is far better than failing
to achieve optimal results with an unpopular strategy.
 Generalization—Shifting focus from specific issues to more general ones may increase
strategists’ options for gaining organizational commitment.
 Focus on Higher-Order Issues—By raising an issue to a higher level, many short- term
interests can be postponed in favor of long-term interests. For instance, by focusing on issues
of survival, the airline and automotive industries were able to persuade unions to make
concessions on wage increases.
 Provide Political Access on Important Issues—Strategy and policy decisions with significant
negative consequences for middle managers will motivate intervention behavior from them. If
middle managers do not have an opportunity to take a position on such decisions in
appropriate political forums, they are capable of successfully resisting the decisions after they
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are made. Providing such political access provides strategists with information that otherwise
might not be available and that could be useful in managing intervention behavior.10
Governance Issues
A “director,” according to Webster’s Dictionary, is “one of a group of persons entrusted with the
overall direction of a corporate enterprise.” A board of directors is a group of individuals who are
elected by the ownership of a corporation to have oversight and guid- ance over management and
who look out for shareholders’ interests. The act of oversight and direction is referred to as
governance. The National Association of Corporate Directors defines governance as “the
characteristic of ensuring that long-term strategic objectives and plans are established and that the
proper management structure is in place to achieve those objectives, while at the same time making
sure that the structure functions to maintain the corporation’s integrity, reputation, and responsibility
to its various constituencies.” This broad scope of responsibility for the board shows how boards are
being held accountable for the entire performance of the firm. In the Worldcom, Tyco, and Enron
bankruptcies and scandals, the firms’ boards of directors were sued by shareholders for
mismanaging their interests. New accounting rules in the United States and Europe now enhance
corporate-governance codes and require much more extensive financial disclosure among publicly
held firms. The roles and duties of a board of directors can be divided into four broad categories, as
indicated in Table 6-8.
The recession and credit crunch of 2008–2009 prompted shareholders to become more wary of
boards of directors. Shareholders of hundreds of firms are demanding that their boards do a better job
of governing corporate America.11 New compensation policies are needed as well as direct
shareholder involvement in some director activities.
Today, boards of directors are composed mostly of outsiders who are becoming more involved in
organizations’ strategic management. The trend in the United States is toward much greater board
member accountability with smaller boards, now averaging 12 members rather than 18 as they did a
few years ago. BusinessWeek recently evaluated the boards of most large U.S. companies and
provided the following “principles of good governance”:
1. No more than two directors are current or former company executives.

2. No directors do business with the company or accept consulting or legal fees from the firm.
3. The audit, compensation, and nominating committees are made up solely of outside directors.
4. Each director owns a large equity stake in the company, excluding stock options.
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5. At least one outside director has extensive experience in the company’s core business and at
least one has been CEO of an equivalent-size company.
6. Fully employed directors sit on no more than four boards and retirees sit on no more than
seven.
7. Each director attends at least 75 percent of all meetings.
8. The board meets regularly without management present and evaluates its own performance
annually.
9. The audit committee meets at least four times a year.
10. The board is frugal on executive pay, diligent in CEO succession oversight responsibilities,
and prompt to act when trouble arises.
11. The CEO is not also the chairperson of the board.
12. Shareholders have considerable power and information to choose and replace directors.
13. Stock options are considered a corporate expense.
14. There are no interlocking directorships (where a director or CEO sits on another director’s
board).13
CONCLUSION
As indicated by Figure 6-1, this chapter focuses on generating and evaluating

alternative strategies, as well as selecting strategies to pursue. Strategy analysis and choice
seek to determine alternative courses of action that could best enable the firm to achieve its
mission and objectives. The firm’s present strategies, objectives, and mission, coupled with
the external and internal audit information, provide a basis for generating and evaluating
feasible alternative strategies.
Unless a desperate situation confronts the firm, alternative strategies will likely repre-
sent incremental steps that move the firm from its present position to a desired future posi-
tion. Alternative strategies do not come out of the wild blue yonder; they are derived from the
firm’s vision, mission, objectives, external audit, and internal audit; they are consistent with,
or build on, past strate.
1. Explain step 4 of QSPM
Answer:
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Step 4 is to determine the attractiveness score. An attractiveness score is a numerical value
that indicates the relative attractiveness of each strategy's alternative data. The attractiveness
score is determined by testing each internal and external factor at one time and asking
questions.
2. Mention key internal factors
Answer:
• Excess working capital (internal strength)
• Inadequate capacity (internal weakness)
• Strong research and development expertise (internal strength)
• Poor employee morale (internal weakness)
3. Mention key external factors
Answer:
• 20% annual growth in the cellular telephone industry (external opportunities)
• The departure of two large foreign competitors from the industry (external opportunity)
• Reduced young adult numbers (external threats)
• Increased health care costs (external threats)
4. What is the relative market share position?
Answer:
Defined as the ratio of the market share of divisions in a particular industry to the market
share held by the biggest rival companies in the industry.
5. Mention 8 steps involved in constructing the SWOT matrix
Answer:
1. Make a list of key external opportunities
2. Make a list of key external threats
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3. Make a list of key internal weaknesses.
4. Make a list of key internal strengths.
5. Match strengths with opportunity and record the resultant SO strategy in the appropriate
cell.
6. Match internal weaknesses with external opportunities and record the WO strategy.
7. Matching strengths with threats and noting the ST category.
8. Matching weaknesses and threats and recording the WT strategy.
6. What are some alternative strategies in the quantitative-QSPM strategic planning matrix?
Answer:
• Key external factors: economic, political, social, technological, competitive.
• Internal key factors: management, marketing, finance, production operations, research and
development, management information systems.
7. Explain the four SWOT matrices do you think?
Answer:
1. Strategy S0 uses the company's internal strengths to take advantage of external

opportunities.
2. The WO strategy aims to increase internal weaknesses by taking advantage of external

opportunities.
3. The ST Strategy uses the company's strengths to avoid or mitigate the impact of external
threats.
4. The WT strategy is a defensive tactic used to reduce internal weaknesses and avoid external
threats.
8. All participants in the strategy analysis and selection activities should get information about
the company's internal and external audits.
Answer:
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This information, together with the company's mission statement, will help participants form
their own thoughts about specific strategies that they believe can benefit the company the
most. Creativity should be supported in this thought process.
9. The matching phase of the strategy formulation framework consists of five techniques that
can be used in various sequences?
Answer:
SWOT matrix, SPACE matrix, BCG matrix, IE matrix, Grand Strategy matrix.
10. What is internal and external matching?
Answer:
Success factors are important and are the key to effectively making alternative strategies that
are appropriate.
11. What are the 6 steps suggested in developing QSPM?
Answer:
1. Make a list of company opportunities and threats
2. Enter the internal key weights and external keys
3. Reveal the phase 2 matrix by identifying alternative strategies and considering their
implementation.
4. Determine the attractiveness score
5. Calculate the total attractiveness score
6. Calculating the total number of total attractiveness scores
12. Mention the positive features of QSPM, and give examples?
Answer:
A set of strategies can be tested sequentially or simultaneously. For example: company level
strategy can be evaluated first, followed by division strategy, then function level strategy
13. What does the board of directors mean?
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Answer: a group of individuals chosen by the company owner to supervise and direct
management and safeguard the interests of shareholders.
14. Mention the work and responsibilities of the board of directors
Answer:
1. Control and supervise management.
2. Comply with legal regulations
3. Considering the interests of shareholders
4. Enhancing shareholder rights
15. What are the steps needed to develop a SPACE matrix?
Answer:
1. Choose a set of variables to define financial position (fp), competitive position (cp),
stability position (sp), and industry position (ip)
2. Give numeric numbers with futures +1 (worst) to + 7 (best) for variables that change the
position of the industry (ip) i, financial position (fp)
3. Calculate the average score for FP, CP, IP, and SP by adding up the values given to each
variable for each dimension.
4. Put the average scores for FP, IP, SP and CP at the intersection strategies that have worked
well.
BIBLIOGRAPHY
Fred R. David and Forest R. David. 2019. Strategic Management: An Approach to Concept-
Competitive Advantage. Jakarta: SalembaEmpat.
http://ameliasarisinaga.blogspot.com/2017/05/makalah-strategipercenter.html
http://lestarypermatasari26.blogspot.com/2018/04/longterm-objective-dan-generic.html
http://sukasukafajare.blogspot.com/2016/01/analysis-strategy-company-pada-pt.html?m=1
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MATERIAL 10 : Understanding Different Types, Analyzing Techniques
And choose strategy
2.1. Types of Strategies
Many organizations run two or more strategies simultaneously. In large and diversified
companies, a combination strategy is usually used when different divisions run different
strategies. In addition, organizations that are struggling to keep developing may use a
combination of a number of defensive strategies, such as divestment, liquidation and cost
rationalization simultaneously.
The types of strategies according to David (2004) are:
1. Integration Strategy Forward integration, backward integration, horizontal integration
are sometimes all referred to as vertical integration. The vertical integration strategy allows the
company to control distributors, suppliers or competitors.

2. Intensive Strategy Market penetration and product development , sometimes referred
to as intensive strategies because all of them require intensive efforts if the company's
competitive position with existing products is to be improved.

3. Diversification Strategies There are three types of diversification strategies , namely
concentric, horizontal and conglomerate diversification. Adding new products or services, but
still related, is usually called concentric diversification. Adding new products or services that
are not related to existing customers is called horizontal diversification. Add new products or
services that are not called diversified conglomerates.

4. Defensive Strategy Besides the integrative, intensive, and diversified strategy, the
organization can also carry out a strategy of rationalizing costs, divestment, or
liquidation. Defensive strategy is sometimes called turnaround or reorganization strategy.

 Cost rationalization, occurs when an organization restructures through cost and asset
savings to re-increase sales and declining profits . During the process of rationalization of
costs, planning a strategy to work with the resources limited and face pressure from holders
of the shares , employees and the media.
 Divestment is selling a division or part of an organization. Divestment is often used to
increase capital which will then be used for further acquisition
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or strategic investment . Divestment can be part of a comprehensive cost
rationalization strategy to release the organization from unprofitable business, which
requires too much capital, or is incompatible with other activities in the company.
 Liquidation is selling all the assets of a company in stages according to the real value
of those assets. Liquidation is an admission of defeat and its aftermath can be
a strategy that is emotionally difficult. However, it is probably better to stop operating than
to continue to suffer large losses. (David, 2004)
According Jatmiko (2003: 115), the types of strategy a dalah as follows:
1. Growth strategy The growth of a company is the result of the variables of
organizational financial resources , products or services produced, external environmental
conditions, capabilities and management skills. The ability of management to appraise these
variables appropriately is the essence of growth.

There are several types of company strategies that are categorized into growth strategies,
namely:
 Growth Concentration
growth is the concentration of a strategy to increase the use of product- products that
already exist (long products) in the market of existing (old market) or the so-called
market penetration. The concentration strategy is applied when a company concentrates
on expanding sales to its original business.
 Strategy Integral Vertical strategy of vertical shows that a business is moving toward
serving the customer or end user of a product / service.

 Diversification Strategy Diversification Strategy is an alternative strategy that has a
large risk and one that has the lowest degree of synergy. However , the Diversification
Strategy is a popular one and often produces satisfying results for the organization.

2. Stability Strategy Stability Strategy means that the organization continues the same
work or activity as before. The assumption is that the external environment will not experience
significant changes in the short term. This strategy applies a wait and see
attitude. This strategy can be beneficial and detrimental to the company, depending on how the
company / organization responds to its environment.

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3. Depletion Strategy or Survival
Strategy This strategy is implemented by companies who feel that the strategy is not in
accordance with their basic goals or mission. So companies need to reduce the scale of
operations. The degree to which the company must be shortened depends on how serious the
problems or problems faced by the strategy that were originally applied by the
organization. The survival strategy is usually chosen for the short term due to the absence of a
better alternative strategy to choose. Furthermore, this strategy of downsizing or survival
strategy is a company's effort to reduce the risk of problems faced by the company due to the
suboptimal implementation of the strategy previously implemented by the company. Types of
downsizing strategies include:
 Cutback and turnaround is a corporate health strategy that aims to eliminate losses and fixed
costs, or cut operating costs, or reduce the size of the company's operations to operate more
efficiently. This strategy can be applied if the company experiences a decrease in profits
continuously.
 Divestment is a strategy of corporate health or downsizing aimed at eliminating losses and
cutting fixed costs borne by the company by selling some assets or assets owned by the
company's organization.
 Liquidation (liquidation) , which is a strategy of corporate downsizing by selling all company
assets. There are 2 types of liquidation, namely: 1) liquidation by choice, namely liquidation
made because the choice is taken by the company. 2) liquidation by force is a liquidation carried
out because the company's financial condition is already very bad. Liquidation usually
requires knowledge and skills in aspects of asset valuation, legal knowledge of both business
law and hunting law.

2.2 . STRATEGY SELECTION PROCESS
Strategy selection is one of the processes in strategy management. This process also
consists of processes. People involved in the selection of strategies need to have complete
people about the company from the internal and external sides. The scope of large companies
will be increasingly complex so that many people need to be involved. Departments within the
company need to represent people in the strategy selection process. People who work in each
department must understand what is happening inside their department.
Strategies must be formulated in writing, not just discussed or even
imagined. Strategies. What is proposed and collected needs to be known by all participants,
these strategies can then be ranked according to their possibilities for implementation. For
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example, ranking 1 for strategies that should not be implemented, ranking 2 for strategies that
can be implemented, rank 3 for those that might be implemented, and rank 4 for those that
must be implemented.
Each company has their own way of implementing and determining what strategies the
company must carry out. Some give authority at the functional level to determine their
respective strategies. There is also a direct command from above, so that the strategy for all
fields in the company is determined directly at the top level.
internal analysis and external analysis, both analyzes are part of the company's strategy selection
process. The information obtained and processed in the EFI, EFE and CPM matrices is useful in the
next process in the selection of strategies. The following chart shows the stages of strategy selection
from the input stage to the determination of the strategy:
Stage 1: Input level
EFE matrix CPM matrix IFE matrix

Stage 2: Matching
SWOT matrix SPACE matrix BCG Matrix IE Matrix Grand strategy matrix

Stage 3
Quantitative Strategy Planning Matrix

In the input stage, we recognize three matrices, namely EFE, CPM, and also IFE. In
this stage the company starts to enter data about the performance or the state of the company
and also the environment. Even though it is still in the stage of entering information, there is
also a part of decision making related to which factor has a big influence on the
company. Incorrect input will cause errors in the next steps.
After the input stage , the matching stage is then related to the previous stage which
records the company's internal and external information. There are 5 matrices that can be used
in this stage . Information about the internal and external environment will be brought
together through these matrices. The company was created with the existence of these two
environments. So the two environments must be synchronized so that the company can
achieve the desired goals.

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2.3 . Strategy Analysis Techniques
1. SWOT matrix
SWOT is an acronym for Strengths-Weaknesses-Opportunities-Threats which are Strength-
Weakness-Opportunity-Threats. These four words come from internal analysis (strengths and
weaknesses) and external analysis (opportunities and threats).
From this matrix, strategy makers can develop 4 strategies derived from 4 factors in SWOT. The four
strategies include:
a. SO Strategy: this strategy uses the strengths of the company to take advantage
of the opportunities that exist. For example, there are opportunities for business
development and companies are also experiencing high profits.
b. WO Strategy: this strategy is carried out by overcoming the company's

weaknesses by taking advantage of existing opportunities. For example there are orders

of products in large quantities while the company's production capacity is
inadequate. The strategy that can be done is to add machines or collaborate with other
companies.
c. ST Strategy: this strategy is carried out by utilizing the company's strength in
facing external threats. For example, when a product is imitated, the company can claim
copyright that is owned by the product
d. WT Strategy: this strategy is a strategy to survive from external threats while

overcoming the weaknesses they have. This situation is the worst situation for the
company. The choice of strategy used is usually a merger, liquidation, or bankruptcy
announcement.
Although it looks like paying attention to a lot of factors and matching those factors
into a new strategy, this SWOT matrix also has weaknesses. Weaknesses of the SWOT matrix
include:
a) The length of the list of factors displayed in the matrix.
b) Lack of priority factors due to the absence of requirements for classification and
evaluation
c) There is no obligation to verify statements or aspects based on data or analysis.
d) Analysis is carried out only on a single level, not multi-level.
These weaknesses can be added to the subjectivity in the selection of factors displayed
in the matrix. Besides the use of ambiguous words will be difficult for the implementation. To
overcome these weaknesses, making SWOT matrices should be done together or exchange
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ideas between parties who understand about the state of the company. Input from many parties
can be filtered into more valid factors.
2. SPACE matrix
Besides SWOT there is also a SPACE matrix . The SPACE matrix looks more complex
than the SWOT matrix. This matrix consists of 4 quadrants. Each quadrant has its own
name. The four are aggressive, conservative, defensive and competitive strategies. Between
these quadrants there are 4 separate axes. These lines also represent several factors of the
company, namely:
a) FS = Financial Strength (Financial Strength)
b) CA = Competitive Advantages (Competitive Advantage)
c) ES = Environmental Stability
d) IS = Industry Strength (Industrial Strength)
3. BCG Matrix
BCG is an abbreviation of Boston Consulting Group . BCG itself is actually a
management consulting company located in Boston. The BCG matrix is created to formulate a
strategy by considering multi-divisions in the company. The BCG Matrix provides companies
with a place to manage their business portfolios by testing the company's market share and
industrial growth in each division to other divisions. The relative position of market share is
defined as the ratio of the market share or revenue of an industry compared to its competitors.
1) BCG Matrix
The division in quadrant I has a relatively low market share position and competes in
industries with high growth rates. Efforts in this quadrant are called questionmarks , because
their position is indeed questioned. The company needs to reconsider whether this division
should be maintained or released.
2) Internal-External Matrix
IE matrix is similar in model to the BCG matrix in the form of a portfolio. In this matrix,
analysis will be integrated into the EFE matrix and also the IFE matrix. In the IE
matrix can later be divided into three regions, namely:
a. a division can be in regions I, II, IV. Divisions in the area can be said to be divisions
that are indicated to be in this area including market penetration, forward integration,
horizontal integration or can also do backward integration.
b. a division can be in regions III, V, or VII. Divisions in the area are suitable for the
strategy of defense and maintenance. Companies can implement strategies such as product
development or market penetration if the division is in the area.
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c. a division can exist in regions VI, VII, or IX. Divisions in this area can implement
harvest or release strategies. It is better if the division is not maintained by selling or
terminating its operations.

IFE total weight
EFE Strong Average Weak

Total
Weight 3.0-4.0 2.0-2.99 1.0-1.99

3.0-4 strong I II III
2.0-2.99 average IV V
Weak 1.0-1.99 VII

The data needed in making IE matrix comes from the IFE matrix score and also the
EFE. Besides that, performance data from each division in the company is needed, especially
sales and profits. The data is needed to find out the percentage of profits obtained by a
division compared to other divisions.
3) Grand Strategy Matrix
Grand strategy matrix is one of the matrices that can be used for the strategy selection process. There
are two dimensions contained in this matrix, namely competitive position and market growth. Based
on these dimensions or factors, a business or division can be categorized into 4 quadrants. The four
quadrants include:
Quadrant I = strong competitive position in rapid market growth.
Quadrant II = weak position in rapid market growth
Quadrant III = weak position in slow market growth
Quadrant IV = strong position in slow market growth
While the principle of the Grand strategy in the form of strategies as follows:
a) A concentrated growth strategy, this strategy focuses on growing market share in the
industry. This strategy is also often called the market dominance strategy. A stable
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environment with growing demand makes this strategy will have a low risk. This
concentration strategy can cause growth in the use of products in customers, attract
competitors and or attract new customers.
b) Market development strategy, this strategy can be in the form of selling products or
services in new markets. Managers will act in promotions, open sales offices, and
make alliances to operate market development strategies.
c) Product development strategies, these strategies focus on modifying existing products
or developing new products to serve the market and customers. Companies can choose
to develop products that can be sold at low cost or develop products with high
performance, or develop products with high quality. In some situations, product
development is limited by funds owned by the company.
d) Vertical integration strategy, this strategy is in the form of a company's integration with
other companies that provide product raw materials or process products further.
e) Concentric diversification strategy, this strategy is a trust strategy that focuses on
creating a portfolio for related businesses.
f) Diversified conglomerate strategy, this strategy involves the need for a business
portfolio based on the needs of a business portfolio based on financial performance
criteria.
g) Horizontal integration strategy, this strategy focuses on the needs of companies in new
markets or markets. Companies can acquire or buy competing companies.
h) Release strategy, this strategy is in the form of selling company components or the
whole company.
i) Liquidation strategy, this strategy is in the form of a company sale or part of it by
auction or private purchase.
j) Strategy turnaround , this strategy is used jik company wants to survive in financial
terms. This strategy requires a reduction in costs and also a reduction in assets.
k) Innovation strategy, this strategy is to form new tools or processes based on research
and experiments.
l) Join ventures , in this strategy two or more companies work together because they both
lack components so they can complement each other.

Quadrant II Quadrant I
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· Market development · Market development
· Market penetration · Market penetration
· Product development · Product development
· Horizontal integration · Forward integration
· Divestment / Release · Backward integration
· Liquidation · Horizontal integration
· Concentric diversification

Quadrant III Quadrant IV
· Retrechment / turn-around · Concentric diversification
· Concentric diversification · Horizontal diservication
· Horizontal diservication · Diversification of conglomerates
· Conglomerate diversification · Joint ventures
· Divestiture / divestment
· Liquidation

2.3. Decision Making Stage
After going through the stage of strategy analysis through a variety of matrices that
have been described previously, the next stage is decision making. Decisions can be made
using the QSPM matrix. QSPM stands for Quantitative Strategic Planning Matrix . In this
matrix the alternative strategies will be listed which previously appeared in the SWOT, IE,
SPACE, BCG matrices, and also the Grand Strategy matrix. But not all strategies will also be
included, it needs filtering before, included in the QSPM matrix.
The steps in making a QSPM matrix are:
a. List of external and internal key factors in the left column.
b. Fill in the weights for each of these factors. These weights are identical to those in the
EFE and IFE matrices.
c. Match and identify alternative strategies which should be implemented. Strategies are
written in the alternative strategy column.
d. Determine an attractive score, with the following conditions:
1 = not attractive
2 = rather attractive
3 = quite attractive
4 = very attractive
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The score is determined based on the influence of these factors on the strategy to be chosen.
e. Calculate the total attractive score (TAS) by multiplying the attractive score by the key
factor weights.
f. Calculate the number of TAS in each strategy column. The strategy that has the largest
number of TAS will be the strategy chosen.
CONCLUSION
Many organizations run two or more strategies simultaneously. In large and diversified
companies, a combination strategy is usually used when different divisions run different
strategies. In addition, organizations that are struggling to keep developing may use a combination
of a number of defensive strategies, such as divestment, liquidation and cost rationalization
simultaneously.
The types of strategies according to David (2004) are:
1. Integration Strategy Forward integration, backward integration, horizontal integration are
sometimes all referred to as vertical integration. The vertical integration strategy allows the company to
control distributors, suppliers or competitors.
2. Intensive Strategy Market penetration and product development , sometimes referred to as
intensive strategies because all of them require intensive efforts if the company's competitive position
with existing products is to be improved.
3. Diversification Strategies There are three types of diversification strategies , namely concentric,
horizontal and conglomerate diversification. Adding new products or services, but still related, is usually
called concentric diversification. Adding new products or services that are not related to existing
customers is called horizontal diversification. Add new products or services that are not called diversified
conglomerates.
4. Defensive Strategy Besides the integrative, intensive, and diversified strategy, the organization
can also carry out a strategy of rationalizing costs, divestment, or liquidation. Defensive strategy is
sometimes called turnaround or reorganization strategy.
• Cost rationalization, occurs when an organization restructures through cost and asset savings to re-
increase sales and declining profits . During the process of rationalization of costs, planning a strategy to
work with the resources limited and face pressure from holders of the shares , employees and the media.
• Divestment is selling a division or part of an organization. Divestment is often used to increase
capital which will then be used for further acquisition or strategic investment . Divestment can be part of a
comprehensive cost rationalization strategy to release the organization from unprofitable business, which
requires too much capital, or is incompatible with other activities in the company.
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• Liquidation is selling all the assets of a company in stages according to the real value of those
assets. Liquidation is an admission of defeat and its aftermath can be a strategy that is emotionally
difficult. However, it is probably better to stop operating than to continue to suffer large losses. (David,
2004).

1. What are the types of strategies according to David and Jatimo?
Answer: according to David: Integration Strategy, Incentive Strategy, Diversification Strategy,
Defensive Strategy.
According to Jatimo: growth strategy, stability strategy, collapse strategy or defense strategy
2. Explain the stages of strategy selection?
Answer:
a. Input Phase
summarizes the basic input information needed to formulate strategic information.
Making small decisions in the input matrix regarding the relative importance of internal and
external factors makes it possible to formulate strategies and evaluate alternative strategies more
effectively.
b. Matching Stage
Focus on making appropriate strategies by aligning key internal and external factors.
c. Decision Stage
Involves a single technique, namely QSPM. QSPM uses input information from stage 1 to
objectively evaluate alternative strategies and provides an objective basis for choosing a particular
strategy.
3. What do you know about the Bostoon Consulting Group (BCG) Matrix?
Answer:
BCG is a large consulting company that was affected by the economic downturn without firing
employees and in 2010 hired the most as a new consultant. The BCG matrix graphically illustrates
the difference between divisions in the relative market food position and industry growth rates. The
BCG Matrix allows multidimensional organizations to manage their business portfolios by
examining the position of the relative market share and the relative level of industry growth for all
other divisions in the organization.
4. What are the stages in making the QSPM matrix?
Answer:
a. List of external and internal key factors in the left column.
b. Fill in the weights for each of these factors. These weights are identical to those in the EFE and
IFE matrices.
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c. Match and identify alternative strategies which should be implemented. Strategies are written in
the alternative strategy column.
d. Determine an attractive score, with value provisions.
e. Calculate the total attractive score (TAS) by multiplying the attractive score by the key factor
weights.
f. Calculate the number of TAS in each strategy column. The strategy that has the largest number of
TAS will be the strategy chosen.
BIBLIOGRAPHY
https://www.dictio.id/t/apa-saja-type-type-strategi-yang-ada-didalam-organizational/116002/2
http://bangtan7suga.blogspot.com/2017/04/v-behaviorurldefaultvmlo.html
Nilasari, Twilight. 2014. STRATEGY MANAGEMENT is SIMILAR. Smart World:
Jakarta

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MATERIAL 11 : PROBLEM IMPLEMENTATION OF MANAGEMENT
ISSUES AND OPERATING
Basically a manager who wants to be a top manager, must always be aware that he needs to
emphasize his mind and efforts to achieve the goals and objectives of the company they lead. [1] In a
company there are always short-term and long-term goals.
A. Short and Long Term Goals
Short-term goals are measurable results that can be achieved or are intended to be achieved in one
year or less.
Short-term goals help to implement the strategy, at least in 3 ways:
1. Short-term goals operationalize the long-term goals
2. Discussion of agreements on short-term goals helps to raise the issue and potential conflicts in an
organization that usually require coordination to avoid consequences.
3. Short-term goals help implement strategy by identifying measurable results from action plans or
functional activities, which can be used to make feedback, corrections, and evaluations more relevant
and acceptable.
Key management issues for implementing the strategy include:
 Setting annual goals

 Policy making
 Resource allocation
 Changes in the existing organizational structure
 Restructuring and reengineering
 Improvement of rewards and incentive programs
 Minimization of rejection of change
 Introduction of managers on strategy
 Development of a culture that supports strategy
 Adapt production / operation processes
 Development of effective human resource functions
Management change is certainly more extensive when the strategy adopted takes the company in an
entirely new direction.
Annual goals
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Setting annual goals is a decentralized activity that directly involves all managers in an organization.
Annual goals are important for implementing the strategy because:
 Is the basis for the allocation of resources

 Is the main mechanism for evaluating managers
 Is the main instrument for monitoring progress towards achieving long-term goals
 Establish organizational, divisional and departmental priorities
A lot of time and energy needs to be spent to ensure that the annual goals are well planned, in line
with the long-term goals, and support the strategy to be implemented.
Policy
Changes in the company's strategic direction do not happen automatically .In everyday reality,
policies are needed to make a strategy work. Policies facilitate the resolution of recurring problems
and guide the implementation of strategies. Whatever the scope and form, policies serve as a
mechanism for implementing strategies and achieving goals. As much as possible, policies must be in
written form. Policies represent the means to carry out strategic decisions.
Resource Allocation
Resource allocation is the main management activity (activity) that enables the implementation of the
strategy. Strategic management enables resources to be allocated based on priorities set in annual
goals. Nothing further impedes strategic management and organizational success beyond resources
allocated inconsistently with priorities set in annual goals. All organizations have at least four types
of resources that can be used to achieve the desired goals:
 financial resources,
 physical resources,
 human resources, and
 technological resources.
Managing Conflict
Interdependence of goals and competition for limited resources often results in conflict. Conflict can
be defined as a dispute between two or more parties regarding one or several issues or problems.
Various approaches to managing and resolving conflicts can be grouped into three categories:
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 avoidance,
 defusion, and
 confrontation.
Matching Structure with Strategy
There are two main reasons that changes in strategy often require changes in structure, namely:
 Structure really determines how goals and policies are set

 The structure dictates how resources will be allocated
 Changes in strategy cause changes in organizational structure.
 The structure should be designed to facilitate a company's strategic efforts and therefore
follow that strategy. We look at this issue by focusing on seven basic types of organizational
structures:
 functional
 divisional,
 Strategic business unit (SBU) and matrix.
Restructuring and Reengineering
Restructuring involves reducing the size of the company in terms of the number of employees, the
number of divisions or units, as well as the number of hierarchical levels in the company's
organizational structure.
Reduction in this case is intended to increase efficiency and effectiveness. Restructuring is related
primarily to the interests of shareholders (shareholders) and not the interests of employees. Re-
engineering is more focused on the interests of employees and consumers rather than the interests of
shareholders. Reengineering involves reorganizing or redesigning tasks, work, and processes for the
sake of increasing or improving costs, service quality, and speed. Reengineering does not usually
affect the structure or chart of the organization, nor does it imply loss of work or dismissal of
employees.
Linking Performance and Salary to Strategy
Most companies today use this form of compensation on the basis of performance for managers and
employees. About 80 percent of all companies today offer certain forms of bonus programs, which
provide flexibility for companies to save costs during difficult times and share profits during good
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times. Many companies also classify employees on the basis of performance rather than the function
of their work because companies want to attract and retain the best employees.
Managing Resistance to Change
Resistance to change can be considered the greatest threat to the successful implementation of a
strategy. Resistance to change can emerge at any stage or at any level of the strategy implementation
process. Although there are various approaches to implementing change, three commonly used
strategies are:
 forced change strategy,

 educational change strategy, and
 rational change strategy or self-interest.
Managing the Environment
Companies need to formulate and implement strategies from an environmental perspective.
Environmental strategies can include the development or acquisition of environmentally friendly

businesses, divesting or shifting from businesses that damage the environment, efforts to become
low-cost producers through waste minimization and energy conservation, and implementing
differentiation strategies through green product features.
Creating a Culture that Supports Strategies
Strategists must strive to preserve, emphasize, and build based on existing cultural aspects that
support the proposed new strategy. Much research indicates that new strategies are often market
driven and dictated by competitive forces.
For this reason, changing a company's culture to fit the new strategy is usually more effective than
changing the strategy to fit the existing culture. Various techniques are available to change the culture
of a company, including recruitment, training, transfer, promotion, restructuring of organizational
design, role models, and positive affirmation.
Production / Operational Problems When Implementing Strategies
Capabilities, limitations, and production / operating policies can significantly help or hinder the
achievement of objectives. The production process usually constitutes more than 70 percent of a
company's total assets. The lion's share of the strategy implementation process takes place in the
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production section. Decisions related to production can have a dramatic impact on the success or
failure of strategic implementation efforts.
Human Resources Problems When Implementing Strategies
A well-designed strategic management system can fail if there is not enough attention to the human
resource dimension. Human resource problems that arise when businesses implement strategies can
usually be traced to one of the following three causes:
 Disruption of social and political structure

 Failure to combine one's expertise with implementation tasks, and
 Lack of support from top management on implementation activities
CONCLUSION
Basically a manager who wants to be a top manager, must always be aware that he
needs to emphasize his mind and efforts to achieve the goals and objectives of the company
they lead. [1] In a company there are always short-term and long-term goals.
Short-term goals are measurable results that can be achieved or are intended to be achieved in one
year or less.
Short-term goals help to implement the strategy, at least in 3 ways:
1. Short-term goals operationalize the long-term goals
2. Discussion of agreements on short-term goals helps to raise the issue and potential conflicts in an
organization that usually require coordination to avoid consequences.
3. Short-term goals help implement strategy by identifying measurable results from action plans or
functional activities, which can be used to make feedback, corrections, and evaluations more relevant
and acceptable.
Key management issues for implementing the strategy include:
• Setting annual goals
• Policy making
• Resource allocation
• Changes in the existing organizational structure

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• Restructuring and reengineering
• Improvement of rewards and incentive programs
• Minimization of rejection of change
• Introduction of managers on strategy
• Development of a culture that supports strategy
• Adapt production / operation processes
• Development of effective human resource functions
• Why are annual goals important to implement?
Answer:
d. Shows the basis for allocating resources
e. The main mechanism for evaluating managers
f. A great instrument for monitoring progress in achieving long-term goals
g. Determine organizational, divisional, and department priorities
• What is meant by resource allocation?
Answer:
Resource allocation is a central activity in management that enables the implementation of

strategies
• What do you know about matrix structure?
Answer:
The matrix structure is the most complex of all designs because it depends on vertical and
horizontal flow or authority and communication.
• What are the advantages of matrix structure?
The answer;
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• Project objectives are clear
• Employees and see the results of their work clearly
• Stopping a project can be done easily
• Use of special equipment, personnel and facilities
g. Functional resources are divided equally as duplicates in divisional structures.
• State the advantages of the matrix structure
Answer:
h. Requires vertical and horizontal flow of communication
i. High cost
j. Violates the principle of government
k. Creating a double line of budget authority
l. Creating multiple sources of reward and punishment
m. Create multiple authority and reporting
• Name some ESOP companies:
• W.L. Gore & Associates-makers of medical and industrial products such as Gore-Tex
• Herman Miller - famous for innovating the manufacture of office furniture
• KCI civil engineering companies
• HCSS-manufacturing software for the heavy construction industry.
• state the definition of annual goals?
Answer: is a decentralized activity that directly involves all managers in the organization
• mention the loss of functional organizational structure?
Answer:
• accountability to the top
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• Delegation of authority and responsibility is not supported
• Minimizing career development
• Low employee and manager morale
• What are the ways to compare formulation and strategy implementation?
Answer:
• Strategy formulation is positioned before the action
• Implementation of the strategy managed during the action
• Strategy formulation focuses on effectiveness
• Strategy formulation focuses on efficiency
• Implementation of the main strategies operational processes.
• Explain what is meant by policy!
Answer: The general definition, policy refers to specific guidelines, methods, procedures,
sequences, forms, and administrative practices that are created to support and encourage the
intended purpose. Policy is an instrument for strategy implementation. Policies create
obstacles, restrictions, and obstacles in the form of administrative action that can be taken to
reward and sanction behavior, it clarifies what can and cannot be done in pursuit of
organizational goals.
• Name five tests that are often used to determine whether Payroll performance plans will
benefit the organization!
Answer: -Does the plan get attention?
- Do the employees understand the plan?
-Does the plan improve communication?
-Is the plan really going to be paid if the target has been reached?
• State the type of organization in production management and strategy implementation
Answer:
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• Hospital
• Bank
• Beer producers
• Steel producers
• Computer company
• Mention loss of divisional organizational structure!
Answer:
• Can be expensive
• Duplication of functional activities
• Requires the ability of capable management
• Can lead the distribution of ideas of costs and resources
• Competition between divisions becomes very strict for dysfunctional.
• Mention 3 ways to compare formulation and strategy implementation?
Answer:
• Implementation of strategies requires special motivation and leadership abilities
• Strategy formulation requires coordination between several individuals
• Implementation of the strategy requires coordination among many individuals
• Name some issues that require management policies
Answer:
• To use one or more suppliers
• To buy or lease new production equipment
• To emphasize quality control
• To not support smoking while working
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• To operate one, two, or three shifts.
• What are some of the central issues of management for strategy implementation?
Answer:
• Set annual goals
• Lowering policy
• Allocate resources
• Replacing the existing organizational structure
• Revise plans for awards and incentives
• Name 5 symptoms of ineffective organizational structure
Answer:
• Too many management levels
• Too many meetings attended by many people
• Too broad a scope of control
• Too many goals are not achieved
• Loss of ground to a rival company
• What is meant by restructuring?
Answer: A restructuring is also called a reduction or removal of a coating
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BIBLIOGRAPHY
Assauri, Sofjan. 2014. Operational Strategic : Lean Operation Process. Jakarta: Rajawali Press.
Assauri, Sofjan. 2016. STRATEGIC MANAGEMENT Sustainable Competitive Advantages.

Jakarta:PT. Raja Grafindo Persada.
David, Fred R. 2004. Managemen Strategis : Konsep- konsep. Jakarta: Indeks.
Sedarmayanti. 2016. Managemen Strategi. Bandung : PT Refika Aditama.
Siagian, Sondang P. 2008. Manajemen Stratejik. Jakarta: PT Bumi Aksara.
Tunggal, Amin Widjaja. 2000. Management Audit Suatu Pengantar. Jakarta: PT Rineka Cipta.
Reno Grivaldi, Tesis: Analisis Perbedaan Manajemen Konflik Manajer Jepang dan Manajer
Indonesia (Study Kasus pada PT.X dan PT.Z) http://lib.ui.ac.id/file?file=digital/20333090-T32221-
Reno%20 Grivaldi%20Dwangga %20Ampanagara-Analisis%20perbedaan.pdf ,diakses pada tanggal
04 September 2017 pukul 22:50 WIB.
Sudibya, Tesis : Pengembangan Restruktusisasi PT Kereta Api (PERSERO) Divisi Angkutan

Perkotaan Jabotabek, http://eprints.undip.ac.id/ 18464/1/ S_U_D_I_B_Y_A.pdf , diakses pada
tanggal 04 September 2017 pukul 23:36 WIB.
Devi Yulianti, Jurnal Restukturisasi Badan Usaha Milik Negara (BUMN) Sebagai Salah Satu
Langkah Reformasi Untuk Mengembangkan Perusahaan: Study Pada PT. Perkebunan Nusantara VII
(PERSERO) Lampung,http://download.portalgaruda.org/article.php?
article=430093&val=7021&title=Restrukturisasi%20Badan%20Usaha%20Milik%20Negara
%20(BUMN)%20sebagai%20Salah%20Satu%20Langkah%20Reformasi%20untuk
%20Mengembangkan%20Perusahaan:%20Studi%20Pada%20PT.%20Perkebunan%20Nusantara
%20VII%20(Persero)%20Lampung , diakses pada tanggal 04 September 2017 pukul 23:35 WIB.
124
MATERIAL 12 : STRATEGY IMPLEMENTATION: MARKETING, FINANCIAL /
ACCOUNTING ISSUES, MANAGEMENT AND INFORMATION SYSTEM (SIM)
The Nature of Strategy Implementation
In fact, for each strategy that has been planned, a good implementation of that strategy
only produces about 10 percent success or less. This is due to a failure in good market
segmentation, too much attention to new acquisition policies, and lagging far behind
competitors in R&D. Implementation of the strategy directly influences the lives of factory
managers, division managers, department managers, sales managers, product managers,
project managers, personnel managers, staff managers, supervisors, and all employees.
A. Marketing Issues
There are several examples of marketing decisions that might require policy:
1. Using a dealer or a combination of channels that are exclusive in distribution.
2. Using TV ads that are many, few, or not using at all.
3. Limit (not limit) the contribution to the business that has been done from one consumer.
4. Become a leader in pricing or being a follower.
5. Offering a complete or limited warranty.
6. Give the salesperson an award based on direct salary, or a salary / commission combination.
7. Do advertising online or not.
Marketing issues that increase consumer awareness at this time are a continuation of what companies
do to follow a person's movements on the internet, even able to identify someone based on their name
and e-mail address. Two variables are important and central to strategic implementation: market
segmentation and product positioning. Market segmentation and product positioning are the most
important marketing contributions to strategic management.
1. Market Segmentation
Market segmentation the day after tomorrow is used to implement the strategy. Market segmentation
is an important variable in strategy implementation because of at least three main reasons. First,
strategies such as market development, development
125
products, market penetration, and diversification require increased sales through new markets and
products. To successfully implement these strategies, a new or improved market segmentation
approach is needed. Second, market degmentation allows companies to operate with limited resources
because mass production, mass distribution and mass advertising are not needed. Market
segmentation allows small companies to compete better with large companies by maximizing
earnings per unit and sales per segment. Finally, market segmentation decisions directly affect the
marketing mix variable; product, distribution, promotion, and price,.
2. Product Positioning
After the marketer establishes segmentation so that the company can target certain groups of
consumers, the next step is to find the expectations and desires of consumers. Positioning is the
development of a representation scheme that reflects your product or service compared to competitors
in dimensions important to success in the industry.
The following steps are required in product positioning:
1. Select key criteria that effectively differentiate products or services in the industry.
2. Draw a two-dimensional product-positioning map diagram with specific criteria on each axis.
3. Define competitor products and services as a resultant four-squared matrix.
4. Identify areas in the positioning map where the company's products and services must be the most
competitive in the market. Look at the unfilled area (market niche or niche).
5. Develop a marketing plan to determine the company's product or service position appropriately.
Some rules in using product positioning as a strategy implementation tool are as follows:
1. Look at the area that has not been filled or niche that is still empty (vacan niche). The best
opportunity can be the underserved segment.
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2. Don't overlap segments. Any profit from this intersection (for example, a larger target market) will
be erased by failure to satisfy one segment. In terms of decision theory, the intention here is to avoid
sub-optimization due to trying to serve more than one objective function.
3. Don't serve two segments with the same strategy. Usually, a successful strategy for one segment
cannot be just applied to another segment.
4. Don't position yourself in the middle of the map. Middle usually shows that the strategy used is not
implemented clearly to distinguish the characteristics that exist. This rule varies according to the
number of competitors. For example, when there are only two competitors, as in the United States
presidential election, it is becoming the expected strategic position.
An effective product positioning strategy meets two criteria: (1) uniquely differentiates companies in
the competition, and (2) leads consumers to expect services that are slightly different from what
consumers will or can provide. Companies should not make expectations that exceed expectations
that can or will be given.
B. Financial / Accounting Issues
1. Get Capital For Strategic Implementation
Successful strategy implementation sometimes requires additional capital. Besides the net profit from
operating and selling assets, the two basic sources of capital acquisition for an organization are loans
and capital deposits. Determining the right combination of loans with paid-in capital in the company's
capital structure is vital for the successful implementation of the strategy.
Earnings per Share / Earnings Before Interest and Tax (EPS) is the most widely used technique in
determining whether loans, shares, or a combination of the two is the best alternative for obtaining
capital for strategic implementation This technique involves examining the impact of funding from
loans with shares on earnings per share under various assumptions as well as EBIT
EPS / EBIT analysis is a valuable tool for making decisions regarding capital financing that is needed
for strategy implementation, but some attention needs to be given when using this technique. First,
earnings may be higher in alternative stocks or debt when EPS levels are lower. For example, just
looking at earnings after taxes (EAT) in Table 8-3, you can see that ordinary shares are the best
choice, regardless of economic conditions. If the brown company mission includes maximizing
profits, contrary to maximizing shareholder profits or some other criteria, then the stock becomes a
better financing option than profit.
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2. Projection of Financial Statements
Projected financial statement analysis (projected financial statement analysis) is the main technique in
implementing strategy because it allows organizations to check the expected results of various actions
and approaches.
There are six stages in making an analysis of financial projections:
a. Prepare financial projections before the balance sheet. Begin by estimating sales as accurately as
possible.
b. Use the percentage-of-sales method to project cost of goods sold (CGS) and expense accounts in
the financial statements.
c. Calculate the net income projection (net income-NI)
d. Reduce net income with dividends (dividends-DIV) that will be paid for next year. The remaining
profit is called retained earnings (RE). each year the company adds retained earnings (from the
income statement) to the previous year's retained earnings on the balance sheet. Therefore, the
amount of retained earnings on the balance sheet is a cumulative amount, not the actual amount
available for strategy implementation! In making financial projection reports, the amount of retained
earnings on the balance sheet is usually quite large. However, the numbers can also be low or even
negative if the company suffers losses. The only way for retained earnings to fall from one year to the
other on the balance sheet is:
1) If the company suffers a loss in that year or,
2) If the company has positive net income in that year but must pay a dividend greater than the
number of labs obtained.
e. Project items in the balance sheet, starting from the lab being held and then estimating shareholder
capital, long-term debt, short-term debt, total debt, total active, fixed active, and current active.
CONCLUSION
In fact, for each strategy that has been planned, a good implementation of that strategy
only produces about 10 percent success or less. This is due to a failure in good market
segmentation, too much attention to new acquisition policies, and lagging far behind
competitors in R&D. Implementation of the strategy directly influences the lives of factory
128
managers, division managers, department managers, sales managers, product managers,
project managers, personnel managers, staff managers, supervisors, and all employees.
1. Explain the background of why R&D is an important part of implementing a strategy!
ANSWER:
Research and development personnel - R&D, play an inseparable part of strategy

implementation. These individuals are generally valued because they can develop new
products and improve old products so as to enable the implementation of strategies to be
more effective.
The research suggests that the most successful organizations use R&D as a link between
external opportunities and internal strengths and then link them to goals. Well-formulated
R&D policies can capture market opportunities with internal capabilities. R&D policies can
improve strategy implementation efforts in terms of:
• Emphasize product or process improvement
• Emphasis on basic or applied research
• Become a leader or follower in R&D
• Developing robotic or manual process types
• a high, average, or low allocation of money for R&D
• Conducting R&D itself or contracting it outside
• Use researchers from universities or private researchers
2. How to correct / overcome a failed marketing strategy
ANSWER:
• Give something unique
• Interactive
• Make a New Target
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• Create a New Strategy
3. Why is market segmentation an important variable in strategy implementation
ANSWER:
Market segmentation the day after tomorrow is used to implement strategies. Market
segmentation is an important variable in strategy implementation because at least three main
reasons. First, strategies such as market development, product development, market
penetration, and diversification require increased sales through the presence of markets and
new products. To successfully implement these strategies, a new or improved market
segmentation approach is needed. Secondly, market degmentation allows companies to
operate with limited resources because mass production, mass distribution and mass
advertising are not needed. the market allows small companies to compete better with large
companies by maximizing earnings per unit and sales per segment. Finally, market
segmentation decisions directly affect the marketing mix variable; product, distribution,
promotion and price.
4. Explain the criteria for how the product positioning strategy is called effective
ANSWER:
1. It uniquely distinguishes companies in competition
2. Bringing consumers to expect services that are slightly different from what consumers
will or can provide.
5. Explain why the internet makes market segmentation easier
answer:
Today, customers who like to shop online want to get a shopping experience according to
their personal personality. A study result says 64% of online customers want to get offers
according to their personalities. If they don't get it, 52% of them will choose to switch to
another store. The advantage:
• Save Time and Costs
• Build better relationships with customers

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• Helps Identify Strengths, Weaknesses, and Opportunities of Your Marketing Strategy
BIBLIOGRAPHY
David Fred R., Konsep Manajemen Strategis, Penerbit Salemba Empat, 2009
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MATERIAL 13 : UNDERSTANDING THE PROCESS OF REVIEW,EVALUATION, AND
STRATEGY CONTROL
Characteristics of Strategy Evaluation
The strategic management process can produce decisions that have a significant long
term. The wrong strategic decisions can be made and to correct these mistakes is difficult.
More strategists to discuss strategies for the benefit of the organization, inter-time evaluations
can give management a head start on potential problems before they become critical. Strategy
evaluation includes three basic activities: (1) a basic discussion of company strategy, (2)
comparing expected results with actual results, and (3)
Adequate and timely feedback is the basis for evaluating effective strategies. Strategic
evaluation is as important as the underlying information. Excessive pressure from top
managers can cause managers below to manipulate information (specifically consisting of
numbers) to satisfy top managers Evaluation of strategies can be done that are complex and
sensitive. Excessive emphasis on evaluation strategies may be costly and counterproductive.
No one wants to judge too closely! The more managers try to improve the family, the weaker
they are. However, little or no evaluation can make matters worse. Strategy evaluation is very
important to ensure that the objectives set can be achieved.
In a variety of organizations, strategy evaluation only considers simple aspects of

organizational performance improvement. Are company assets increasing? Is there an increase
in profitability? Are sales increasing? Has the level of productivity increased? Are profit
margins, ROI, and earnings per share going up? Some companies say that their strategy has
gone well if the answer to that question is affirmative. The company's strategy can be used
well, but using measures that can be adjusted because the strategy is needed for the short term
and long term. Strategies often do not affect the outcome of short-term operations to the point
where it is too late to make the necessary changes.
Strategy evaluation is very important because companies face a dynamic environment

where internal and external factors often change quickly and dramatically. Today's success
does not guarantee tomorrow's success! Joseph Stalin was a ruthless leader (from 1928
onwards) and prime minister (from 1940 onwards) in the Soviet Union until his death in 1953.
The famous quote from Stalin is. History shows that there are no invisible soldiers. This quote
reveals that the biggest and most successful companies must continue to evaluate their
strategies and be careful with competing companies. An organization must not be lulled and
complacent with success. Countless companies in the following years. Peter Drucker said,
"Unless the strategy evaluation is carried out seriously and systematically, and unless the
strategist intends to work on the results, the energy will be used up to maintain yesterday."
Other reasons for evaluations becoming more difficult now include trends developing in one year just
to struggle to survive the following:
1. Dramatic increase in environmental complexity.
2. Increasing difficulty predicting the future accurately,
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3. Increasing the number of variables.
4. The more quickly a good plan becomes irrelevant and obsolete.
5. Increasing the number of domestic and world events that affect the organization
6 The shorter time limits for a plan can be carried out, coupled with the various uncertainties that
accompany it.
The fundamental problem facing managers today is how to effectively control employees
in modern organizations that require greater flexibility, innovation, creativity, and initiative
from employees. How can managers ensure that giving greater authority to employees will not
burden the organization? The costs borne by the company for a damaged reputation, fines, lost
opportunities, from the split management focus can be very large.
 The Process of Evaluating Strategies
Strategy evaluation is needed by all types and sizes of organizations. Strategy evaluation
should be able to question the expectations and assumptions made by management, trigger the
emergence of an assessment of goals and values, so it should stimulate creativity in generating
alternatives and formulate evaluation criteria. In addition to the size of the organization,
management needs to walk around (management by wandering around) throughout important
level for effective strategy evaluation. Strategy evaluation activities must be carried out
continuously, not only at the end of a certain period of time or only after a problem occurs
Waiting until the end of the year is like closing the door of the stable after the horse has run
away.
Evaluate strategies in a manner that allows for an assessment of developments can be made and
monitored more effectively. Some strategies take several years to implement; consequently, the
results to be judged could not be seen for several years. A successful strategy is a combination of
patience and a strong desire to take corrective action when needed. There is always a time when
corrective action is needed in an organization! Managers and employees of these companies should
be aware of developments that occur in achieving the company's goals continuously. When the key
key factors change, organizational members must be involved in determining appropriate corrective
actions. When assumptions and expectations differ significantly from estimates, the company should
update its strategy formulation, perhaps sooner than planned. In strategy evaluation, such as strategy
formulation and strategy implementation, people make a difference. Through involvement in the
strategy evaluation process, managers and employees are committed to making the company move
stably continuously rather than on a periodic basis helping towards the achievement of objectives.
 Review based on Strategy
The revised EFE matrix must show how effective the company's strategy is in responding to
opportunities and threats. This analysis can also be helped by raising the following questions:
1. How do competitors react to our strategies?
2. How can a competitor's strategy change?
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3. Have the strengths and weaknesses of the main competitors changed?
4. Why do competitors make changes to certain strategies?
3. Why are some competitors' strategies more successful than others?
6. How satisfied are our competitors with their current position in the market and profitability?
7. How far can our main competitors be suppressed before they strike back?
8. How can we work effectively with competitors?
Several external and internal factors can prevent a company from achieving its long-term
and annual goals. Externally, the actions of competitors.changes in demand, changes in
technology, economic changes, demographic shifts, and government actions can hinder the
achievement of organizational goals. Internally, an ineffective strategy might be chosen or a
bad implementation might be done. The goal might be too optimistic. Therefore, failure to
achieve goals may not be the result of unsatisfactory work of managers and employees. All
members of the organization need to know this to encourage their support for strategic
evaluation activities.
 measuring Organizational Performance
Evaluation activities: Another important strategy is measuring organizational performance

(measuring organizational performance). These activities include comparing expected results
with actual results, investigating deviations from plans, evaluating individual performance,
and evaluating or annual goals of strategies should be measurable and easily verifiable. The
criteria for predicting the outcome may be developments that occur in achieving the stated
goals. Good long-term goals will be in this process. Criteria for evaluating strategies are
compared to criteria that reveal what happened. For example, when it must be more important
that the sales of the last quarter are 20% lower than expected, a simple report that strategies
need to know that sales in the next quarter might be 20% in standard, unless action is taken to
reverse this trend. Effective control requires substandard unless accurate estimates
Failure to achieve expected progress through achieving long-term goals u yearly signals the
need for corrective action. Many factors, such as unreasonable policy changes in unexpected
economic conditions, unreliable suppliers and distributors or ineffective strategies, can produce
unsatisfactory progress in meeting goals. Problems can arise from ineffectiveness (not doing the right
thing) or inefficiency (doing the right thing badly), Many variables can or should be included in
measuring organizational performance As shown in Table 9-2, usually favorable and unfavorable
variants are recorded in monthly, quarterly, and yearly, and the resultant actions needed are then
determined.
Determining which goals are most important in evaluating strategies can be difficult.
Strategy evaluation is based on quantitative and qualitative criteria. Choosing the right
combination of criteria in evaluating strategies depends on the size of the organization,
industry, strategy, and management philosophy. For example, an organization that uses a
retrenchment strategy can have a combination of evaluation criteria that is very different from
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an organization that uses a market development strategy. Quantitative criteria that are
commonly used in evaluating strategies are financial ratios that often oversee each segment of
the company. Strategists use ratios to make three critical comparisons: 1) comparing company
performance over different time periods. (2) comparing company performance with
competitors; and (3) comparing company performance with industry averages
Some potential problems are related to the use of quantitative criteria to evaluate strategies. First,
most quantitative strategies refer to annual goals rather than long-term goals, and two different
accounting methods can give different results in a variety of quantitative criteria. Third, intuitive
judgment is also almost always done in the elaboration of quantitative criteria. Therefore, qualitative
criteria are important in evaluating strategies. Human factors such as high attendance and turnover
ratios of quality and low production quantity, or poor employee satisfaction can be the cause of
declining performance. Factors in marketing, financial accounting, or MIS can cause financial
problems.
Some important questions in addition to expressing the need for quantitative and qualitative
assessments in strategy evaluation are as follows:
1. How good is the balance of company investment between high-risk projects and low-risk projects?
2. How good is the balance of company investment between short-term long-term projects?
3 How good is the balance of corporate investment between slow market growth and fast market
growth?
4. How good is the balance of investment between different divisional companies
5. To what extent are alternative corporate strategies socially responsible?
6. What is the relationship between internal and external strategic factors that are important in the
company?
7. How do the main competitors respond to certain strategies?
Take corrective action
The last strategic evaluation activity is taking corrective actions. is making changes to
reposition the company to a more competitive place for the future. As shown in Table 9-3, examples
of changes that might be needed are changing an organizational structure, replacing one or more
important individuals, selling a division, or revising a business mission. Other material concerns
include making or revising goals, making new policies, issuing shares to raise capital, adding
salespeople, allocating different resources, or developing new performance incentives. Taking
corrective action does not always mean that an existing strategy will be abandoned, or even create a
new strategy.
The largest office supply chain in the United States with 2,295 stores globally and 500 stores in
the United States, Staples, is taking corrective action to try to survive Nature's large-scale office
supply shop business. Most analysts say that this is too little too late, but Staples reduced its store
space in the United States by 15% between 2013 and 2015, and opened smaller stores that were more
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focused on mobile applications. Particularly threatening Staples (and OfficeMax and Office Depot) is
news trends) consumers prefer to buy office equipment online (cheaper) from competitors such as
Amazon, and (b) there is a decline in office equipment since hand-held devices such as iPad has
reduced demand for personal computers, printers and even paper. Staples has a fleet of vehicles that
can deliver free orders the next day, when compared to Amazon, which only offers free two-day
delivery for members who pay 79 dollars a year to be part of Amazon Prime.
No organization can survive like an island, no organization can escape from change. Taking
corrective action is important to keep the organization on track towards achieving its goals. In his
book that provokes thought, Future Shock and Third Wave. Alvin Toffler argues that the business
environment becomes very dynamic and complex, so that it threatens people and organizations with
future shock, which occurs when the characteristics, types, and speed of change defeat the power of
an individual or organization's ability to adapt. Strategic evaluation increases the ability of an
organization to adapt successfully to changing environments.
Taking corrective action increases uncertainty for managers and employees. The elite suggests that
participation in strategy evaluation activities is one of the best ways to overcome individual resistance
to change. According to Erez and Anfer, individuals receive the best change when they gain a
cognitive understanding of change, a feeling of controlling the situation, and an awareness that action
is needed to implement change
Strategy evaluation can lead to changes in strategy formulation, changes in strategy

implementation, both changes in formulation and implementation, or without changes at all.
Strategists cannot ignore the need to revise strategies and revise approaches to implementation sooner
or later.
Corrective action should be able to put the company in a better position so that it can fully utilize
internal strength; take advantage of external opportunities; to avoid, reduce or reduce external threats;
and to correct existing internal weaknesses. Corrective actions should have an adequate time frame
and risk calculation. These should be internal consistency and socially responsible. Perhaps most
importantly, corrective actions strengthen an organization's competitive position in the industry.
Continuous strategy evaluation enables strategy makers to continuously monitor developments and
can provide the information needed for an effective strategic management system.
 Balanced Scorecard recta
Developed in 1993 by professors Robert Kaplan and David Norton of Harvard Business School,
and continuously improved to this day, the Balanced Scorecard is an evaluation of strategy and
control techniques. The Advanced Scorecard gets its name from the needs that are often used by
companies to "balance" financial measures that are exclusively in evaluating strategies and
controlling with non-financial measures of product quality and customer service. An effective
Balanced Scorecard contains a combination of strategic strategies and financial goals that are
carefully selected and created for the company's business needs.
As a tool for measuring and evaluating strategies. Balanced Scorecard when used at Sears, United
Parcel Service, 3M Corporation, Heinz, and hundreds of other companies For example, 3M
Corporation has a financial goal to achieve growth in annual earnings per share of 10% or more, as
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well as a strategic goal to have at least 30% of sales coming from products introduced in the past four
years. The overall objective of the Balanced Scorecard is to balance shareholder objectives with
customer and operational goals. Of course, this series of interconnected targets can also be ... condile.
The exception is that customers want low prices and high services, which conflict with shareholders'
desire for high returns on their investment. The concept of the Balanced Scorecard is consistent with
the opinions of continuous improvement management (CIM), and total management quality (TQM).
The rationale of the Balanced Scorecard is that companies should set goals and evaluate strategies
on criteria rather than financial measurements. Financial measurements and ratios are very important
in strategic planning, but the same interests also include factors such as customer service, employee
morale, product quality, pollution reduction. business ethics, social responsibility, community
involvement, and other matters. In conjunction with financial measurement, these more "factors
include an integral part of both the process of goal setting and the strategy evaluation process, the
company's Balanced Scorecard bag is just a list of all the key goals for working together in relation to
other time dimensions when each goal each will be achieved, as is the main responsibility or contact
of the personnel, departments, or divisions of each target
The balanced scorecard is an important strategy evaluation tool. This is a corporate process for
evaluating strategies based on four perspectives on financial theory, customer knowledge. internal
business processes, and the analysis and analysis of the Balanced Scorecard analysis helps the search
for answers to the questions, fill the information with financial measures forfollowing and combining
that information evaluates the strategy that has been swallowed
• How good is the company in continuously improving and creating value such as innovation,
technology ownership, product quality, operational efficiency, etc.
• An example of a Balanced Scorecard is given in Table 9-4. Note that the company evaluates six
main issues in evaluating its strategy; (1) Customers, (2) Managers / Employees, (3) Operations /
Processes, (4) Community / Social Responsibility, (5) Business / Environmental Ethics, and (6)
Finance. The basic form of the Balanced Scorecard may be different for each organization. The
Balanced Scorecard approach to strategy evaluation aims to balance long-term attention with long-
term attention, to balance financial and non-financial attention, and to balance internal and external
attention. The Balanced Scorecard will be developed differently, and adapted to various industries
with one goal, namely to evaluate company strategies based on important quantitative and qualitative
measures.
The Balanced Scorecard has a Certification Program that includes two levels of certification: the
Balanced Scorecard Master Professional (BSMP) and the Balanced Scorecard Professional (BSP)
both offered in association with George Washington University and which can be achieved through
public workshop participation. The site for this program is http: // www. balancescorecard.org/.
 Source of Information on Evaluation of Published Strategies
A number of publications can be used to evaluate the company's strategy. For example, Fortune's
maisla annually evaluates and displays Fortune 1,000 (largest manufacturing) and 50 (largest
retailers, transportation companies, public facilities providers, insurance banks, and various types of
financial companies in the United States). Fortune ranks companies with the best and worst
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performance for various factors such as ROI, sales volume, and profitability. Every year, Fortune
publishes their evaluation strategy research in the article "The World's Most Admired Companies."
Nine main attributes are used as evaluation criteria. human management; level of innovation; product
quality; financial performance; social responsibility: use of assets; long term investment; global
competition; and management quality. Fortune's 2012 evaluation in tables 9-6 revealed the most
admired (best managed) company in their industry.
 Businessweek, Industry Week, and Dun's Business Month periodically publish detailed details
of various US businesses and industries. Although the source of publicization of strategy
evaluation information mostly covers large and often publicized businesses, comparative
ratios and other relevant information can still be used to evaluate small businesses and
privately owned companies.
 Characteristics of Effective Evaluation Systems
An effective strategy evaluation must fulfill a number of basic requirements. First,

strategic evaluation activities must be economical; too much information is as bad as too little
information, and too much control can cause more harm than good. Strategy evaluation
activities should give meaning; these activities must be related and in line with the company's
goals. This activity should provide managers with useful information about workers in which
they have control and influence. The strategy evaluation activity must provide inter-time
information; in certain conditions and areas, a manager may need daily information. For
example, when a company diversifies by acquiring another company, information for
evaluation needs is needed more often. However, in the R&D department, daily or even
weekly evaluation information may not function properly. Certain predictive time information
is more desirable as a basis for evaluating strategies than accurate information that is not
related to current conditions. Frequent measurement and quick reporting can frustrate control
rather than provide better control. The time dimension of the control must coincide with the
time span of the event being measured.
Strategy evaluation should be designed to provide a real picture of what happened, for example, in a
sluggish economic environment, the ratio of productivity and profitability can go down quickly and
worryingly, even though employees and managers are working harder than usual. Strategy evaluation
must be able to objectively capture these events. Information derived from the strategy evaluation
process must facilitate action taking and must be disseminated to individuals in the organization who
need it as a basis for action. Managers usually ignore the evaluation report provided for mere
information purposes; not all managers need all of these reports. Control should be action oriented
rather than information oriented. .
The strategy evaluation process does not dominate the decision; the process should encourage mutual
understanding, mutual trust, and generally be accepted. There should not be a department that fails to
cooperate with other departments in evaluating strategy. Strategy evaluation should be simple, not too
broad, and not too restrictive. Complex strategy evaluation systems are sometimes confusing for
some people and the achievement is not too large. The challenge for an evaluation system is not its
complexity, but its usefulness.
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Large organizations need a more detailed and more abrasive strategy evaluation system to coordinate
various divisions and functional areas. Managers at company I often communicate with each
employee and coworkers every day, so there is no need for a more extensive evaluation reporting
system. Proximity to the local environment usually makes the process of gathering and evaluating
information easier, especially for small organizations rather than large organizations. However, the
key to an effective strategy evaluation system might be the ability to convince people that failure to
achieve a certain goal in time is not a true reflection of their performance. There is no ideal system
evaluation system. The unique characteristics of an organization, such as its size, management style,
goals, problems, and strengths, can determine the final design of the evaluation of strategies and
control systems.
Contingency Planning
The basic premise of good strategic management is that companies plan ways to deal with desirable
and unwanted events before they actually occur. Lots of companies make contingency plans only for
unwanted events; this is a mistake, because both minimizing threats and taking advantage of
opportunities can improve the company's competitive position.
Regardless of how carefully the strategy is formulated, implemented, and evaluated, events that go
unnoticed, such as strikes, boycotts, natural disasters, the entry of foreign competitors, and
government policy can make a strategy no longer relevant. To minimize the impact of potential
threats, companies must develop contingency plans as part of their strategy evaluation process.
Contingency plans can be defined. as an alternative plan that can be used when something unexpected
happens. Only areas with high priority require certainty of contingency plans. Strategists cannot and
must not try to make contingency plans for every possibility. In some cases, contingency plans should
be as simple as possible.
Some contingency plans that are generally made by companies include the following
1. If an intelligence report indicates that the main competitor withdrew from the market, what action
should the company take?
2. If our sales direction is not achieved, what actions should the company take to avoid losses?
3. If the demand for our products exceeds what is expected, what action must the company take to
meet the high demand?
4. If a disaster occurs, such as loss of computer capability; attempted forced take of a company; loss
of patent protection, damage to manufacturing facilities due to an earthquake, tornado, or hurricane
wind? What actions should the company take?
5. If the development of new technology is faster than we anticipated, what actions should the
company take?
Too many organizations ignore alternative strategies that are not selected as the main strategy despite
the work to make it able to provide valuable information. Alternative strategies not selected for
implementation can be used as contingency plans if at any time the main strategy does not work as
expected The company and the United States government continue to consider electricity generated
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from nuclear. as the most efficient way of producing power. Many contingency plans want nuclear
power rather than electricity from coal and gas.
When the strategy evaluation activity expresses the need for large changes quickly, an appropriate
contingency plan can be used. Contingency plans can demonstrate the ability of strategy makers to
respond quickly to internal and external changes to the organizational strategies used at that time. For
example, if the assumption of an economy sluggish turns out to be wrong while a contingency plan
has been prepared, then the manager can make the necessary changes in a timely manner when the
problem occurs.
In certain cases, external and internal conditions show unexpected opportunities. When opportunities
like this occur, contingency plans allow an organization to take advantage of them quickly. Linneman
and Chandran reported that contingency planning helps users, such as DuPont, Dow Chemical,
Consolidated Foods, and Emerson Electric, with three main benefits: (1) enabling rapid response to
change. (2) prevent panic in crisis situations, and (3) make managers more adaptable by encouraging
them to see, the future as a variable.
Audit Tools that are often used in strategy evaluation are audits. The auditor examines the company's
financial statements to determine whether they have been prepared based on generally accepted
accounting principles (GAAP) and whether they show the correct activities that occur in the
company. Independent auditors use a standard called generally accepted audit standards (GAAS
generally accepted auditing standards). Public accounting firms often have divisions that provide
strategy evaluation services.
A new era of international financial reporting standards (IFRS) emerges unbearably, and businesses
need to move forward and prepare for IFRS. Many US companies now report their finances using the
old GAPP and the new IFRS. "If the company isn't getting ready, if they don't start the next three
years," business professor Donna Street warned at the University of Dayton, "they will face a big
problem." The GAAP standard consists of 25,000 pages, while IFRS consists of only 5,000 pages, so
it seems IFRS is not complicated.
The shift in accounting from GAAP to IFRS in the United States will cost millions of dollars in
business for the cost and updating of software and training systems. The United States CPA needs to
study accounting principles intensely, and business schools should advance and start teaching their
students new accounting standards.
Challenges of the 21st Century in Strategic Management
Three particular challenges or decisions faced by the strategists at this time are (1) deciding whether
the process should be more art or science, (2) deciding whether the strategy needs to be known by
stakeholders or, conversely, it must be kept secret and (3) decide whether this process is leaning from
the top down or from the bottom up?
Art or Science Issues
Most of the strategy literature in advocating that strategic management should be more inclined to be
seen as science than art. This perspective suggests that companies need to systematically assess their
external and internal environment, conduct research, carefully evaluate the cause and effect of
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alternatives, analyze, and make decisions based on the flow of action. In contrast, Mintzberg argues
that strategy development must be integrated in a way where strategic decision making is based on
holistic thinking, intuition, creativity, and imagination. Mintzberg and his followers reject the strategy
that results from objective analysis, preferring subjective imagination. "Scientific Strategies" reject
strategies that emerge from emotions, intuition, creativity and politics. Supporting artistic views often
considers strategic planning exercises only time-consuming. Mintzerg's philosophy insists on
informality, whereas strategic scientists (and this text) insist on formality. Mintzberg refers to
strategic planning as a "growing" process whereas strategic scientists interpret it as a "planned"
process.
The answer to the conflict between art and science must be decided by the strategists
themselves, and in fact the two approaches need not be treated as mutually exclusive in
deciding which approach is the most effective, it must be considered that the business world
today is increasingly complex and even tighter competition. There is little room for error and
strategic planning. Of course, in smaller companies there can be higher informality in the
process than in larger companies, but even for small companies, adequate competition
information is widely available on the Internet and elsewhere, and should be collected,
assimilated, and evaluated before determining the course of action that becomes the axis of
the company's survival. The continuity of countless employees and shareholders can be a
driver for the chosen strategic activity. Too much more risk than too little in strategy
information. The formulation of strategies is not likely to be too dependent on feelings and
opinions rather than research data, competition intelligence, and analysis in formulating
strategies.
Invisible and Hidden Issues
An interesting aspect of the competitive analysis discussion is that their own strategies
should be confidential or open in the company. Sun Tzu warriors from China and military
leaders are now trying to keep secrets of the strategy because the war can be carried out
because it is based on tife deception. However, for business organizations, confidentiality is
not the best. Maintaining the confidentiality of the strategies of employees and stakeholders
can broadly hamper employees and broad stakeholder communication, understanding and
commitment can severely hamper employees and stakeholder communication, understanding
and commitment and leave valuable input habits when these people can have regarding the
formulation and implementation of the strategy. Therefore, strategists in a particular company
must decide for themselves whether the risks of competing companies are easily known and
exploiting the company's strategy is beneficial in increasing the motivation and input of
employees and stakeholders. Most executives agree that some strategic information should
remain confidential to the main manager, and that steps are taken to ensure that this kind of
information is not disseminated outside the inner circle.
There are good reasons to let the process of strategy and strategy be seen and open to others rather
than hidden and kept secret. There is also a good reason to keep the strategy hidden from all of them,
except for high-level executives. Strategists must decide for themselves what is best for their
company.
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Some reasons for the need for comprehensive openness in the strategy and decision process that
follows are:
1. Managers, employees, and other stakeholders can be prepared to contribute to the process. They
sometimes choose bright ideas. Secrecy removes many bright ideas.
2. Investors, creditors, and other stakeholders have a stronger base of support if they know what the
company is doing and where the company will go.
3. Openness encourages democracy while secrecy encourages autocracy. Demostic companies and
most foreign companies prefer democracy over autocracy as a management style.
4. Participation and openness increase understanding, commitment and communication within the
company.
The reasons some companies prefer to carry out strategy planning in private and keep the strategy
hidden from all parties, except top-level executives are as follows:
1. Free dissemination of company strategy can easily be turned into competitive intelligence by
competitors who will exploit the information.
2. Confidentiality limits criticism, guesswork and future retrospect.
3. Participants in the open strategy process become more attractive, so that it can attract the interest of
competitors.
4. Confidentiality restricts competitors from imitating or duplicating corporate strategies and

weakening the company.
The benefits arising from the strategies that are seen and the strategies that are closed to an extreme
must be balanced between the two. Parnell revealed that in an ideal world all individuals both inside
and outside the company should be seen in strategic planning, but in practice confidential and
sensitive information is often only limited to top-level managers. The act of balancing this is quite
difficult, but important for the survival of the company.
Top-down or bottom-up approach
Supporters of the top-down approach argue that top-level executives are the only
positions in the company that have the collective experience, expertise, and responsibilities
entrusted to make key strategic decisions. Conversely, supporters of a bottom-up approach
argue that lower-level managers, winners, and employees who will implement the strategy
need to be actively involved in the process of formulating the strategy to ensure their support
and commitment. Today's strategic research and this textbook emphasize an approach or
bottom-up, but previous work by Schendel and Hofer emphasizes the need for companies to
rely on the perceptions of their top-level managers in strategic planning. Strategists must be
able to achieve a work balance of these two approaches in considering exactly what is best for
the company at any given time, when they are aware of the fact that the latest research results
support the bottom-up approach, at least among American companies. The increased
education and diversity of the workforce at all levels is the reason why lower level managers
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and even non-managers should be taught to participate in the strategic planning process, at
least to the extent that they intend and are able to contribute.
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CONCLUSION
The strategic management process can produce decisions that have a significant long
term. The wrong strategic decisions can be made and to correct these mistakes is difficult.
More strategists to discuss strategies for the benefit of the organization, inter-time evaluations
can give management a head start on potential problems before they become critical. Strategy
evaluation includes three basic activities: (1) a basic discussion of company strategy, (2)
comparing expected results with actual results, and (3)
Adequate and timely feedback is the basis for evaluating effective strategies. Strategic
evaluation is as important as the underlying information. Excessive pressure from top
managers can cause managers below to manipulate information (specifically consisting of
numbers) to satisfy top managers Evaluation of strategies can be done that are complex and
sensitive. Excessive emphasis on evaluation strategies may be costly and counterproductive.
No one wants to judge too closely! The more managers try to improve the family, the weaker
they are. However, little or no evaluation can make matters worse. Strategy evaluation is very
important to ensure that the objectives set can be achieved.
In a variety of organizations, strategy evaluation only considers simple aspects of

organizational performance improvement. Are company assets increasing? Is there an increase
in profitability? Are sales increasing? Has the level of productivity increased? Are profit
margins, ROI, and earnings per share going up? Some companies say that their strategy has
gone well if the answer to that question is affirmative. The company's strategy can be used
well, but using measures that can be adjusted because the strategy is needed for the short term
and long term. Strategies often do not affect the outcome of short-term operations to the point
where it is too late to make the necessary changes.
Strategy evaluation is very important because companies face a dynamic environment

where internal and external factors often change quickly and dramatically. Today's success
does not guarantee tomorrow's success! Joseph Stalin was a ruthless leader (from 1928
onwards) and prime minister (from 1940 onwards) in the Soviet Union until his death in 1953.
The famous quote from Stalin is. History shows that there are no invisible soldiers. This quote
reveals that the biggest and most successful companies must continue to evaluate their
strategies and be careful with competing companies. An organization must not be lulled and
complacent with success. Countless companies in the following years. Peter Drucker said,
"Unless the strategy evaluation is carried out seriously and systematically, and unless the
strategist intends to work on the results, the energy will be used up to maintain yesterday."
QUESTIONS AND ANSWERS TO MATERIAL 13:

List of questions
1. What are the fundamental problems facing managers now?
Answer:
The fundamental problem facing managers today is how to effectively control employees in
modern organizations that demand greater flexibility, innovation, creativity and initiative from
employees. How managers can ensure that giving more authority to employees will not
burden the organization.
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2. will the corona virus outbreak situation affect the evaluation of strategies in the economic
field, especially for companies.
ANSWER:
yes, company activities are getting weaker and will have an impact on economic activities
where many companies have to close / reduce work hours so that here will have an impact on
the lives of company employees. one of them employees gets half a salary because working
hours are reduced
3. Why is evaluation strategy so important?

Answer:
Strategy evaluation is very important because companies face a dynamic environment where
internal and external factors often change quickly and dramatically.
4. Some reasons for the need for overall openness in the reasons for the strategy and the
decision to follow are?
Answer:
1. Managers, employees and other stakeholders can be prepared to contribute to the process.
2. Investors, creditors, and other stakeholders have a stronger basis of support if they know
what the company is doing and where the company will go.
3. Openness encourages democracy while secrecy encourages autocracy
4. Participation and openness increase understanding, commitment and communication within
the company.
5. What are the problems associated with using quantitative criteria to evaluate strategies?
Answer:
1. Most quantitative strategies refer to annual goals rather than long-term goals
2. Different accounting methods can give different results in a variety of quantitative criteria
3. Intuitive assessments are also almost always carried out in the elaboration of quantitative
criteria.
6. mention the main issues in evaluating the strategy?

Answer:
1. customer
2. manager / employee
3. operation / process
4. community / social responsibility
5. business ethics / environment
6. financial.
BIBLIOGRAPHY
David Fred R., Konsep Manajemen Strategis, Penerbit Salemba Empat, 2009
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STRATEGIC MANAGEMENT Kelompok 4-1

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STRATEGIC MANAGEMENT

INDONESIAN STRATEGIC MANAGEMENT SYLLABUS PAPERS

Anissa Fitria Febriati/ C1C018070

ACCOUNTING S1 STUDY PROGRAM

Bengkulu, April 28, 2020

MATERIAL 1 : THE BASIC CONCEPTS OF STRATEGY MANAGEMENT..................................3

MATERIAL 2 : UNDERSTANDING THE FORMULATION STRATEGY : VISION, MISSION,

MATERAL 3 : UNDERSTAND AND BE ABLE TO CARRY OUT AN ANALYSIS OF THE

MATERIAL 4 : UNDERSTAND AND BE ABLE TO ANALYZE THE COMPANY'S INTERNAL

MATERIAL 5 : UNDERSTANDING AND ABLE TO IMPLEMENT THE BSC IN

MATERIAL 6 : BALDRIDGE PERFORMANCE EXCELLENT......................................................60

MATERIAL7 : UNDERSTANDING THE BASIC CONCEPT AND DESCRIPTION OF LEAN-SIX

MATERIAL 8 : UNDERSTAND THE DIFFERENT TYPES OF STRATEGIES IN ITS

MATERIAL 9 : UNDERSTANDING THE VARIOUS STAGES AND TECHNIQUES OF

MATERIAL 10 : UNDERSTANDING DIFFERENT TYPES, ANALYZING TECHNIQUES

MATERIAL 11 : PROBLEM IMPLEMENTATION OF MANAGEMENT ISSUES AND

MATERIAL 12 : STRATEGY IMPLEMENTATION: MARKETING, FINANCIAL /

MATERIAL 13 : UNDERSTANDING THE PROCESS OF REVIEW,EVALUATION, AND

A. Define Management Strategy

B. Strategic Management Stages

The strategic management process consists of three stages :

 Integrate intuition and analysis

C. Key Terms In Strategic Management

More and more companies are gaining a competitive advantage by using

E-commerce allows firms to sell products, advertising, supply sales, intermediaries,

 Vision and Mission Statement

 External threats and opportunities

• Availability of capital that cannot be over-taken

Consumers expect operations and green products (environmentally friendly)

Marketing moves quickly to the Internet,

Food commodity prices have risen

• The problem of computer hackers is increasing.

• Intense price competition between companies

• High unemployment and underemployment rates globally

• Interest rates increase

• Product life cycles become shorter

• Central and local governments are financially weak

• Violence related to drug cartels in Mexico

• Winter is colder and summer is hotter than usual

House prices are low.

• The global market offers the highest growth income

 Internal Strengths and Weaknesses

In conducting a case analysis on stralegic management. it is important to be asvisional as

Strategies (strategies) are intended to achieve long-term objectives (long-term objective).

Policies are often stated in terms of management, marketing, finance / accounting,

D. Strategic Management Models

Where are we now?

Where are we going?

How do we get there?

E. Benefits Of Management Strategy

Historically, the main advantages of strategy management have helped organizations to

In addition to strengthening managers and employees, strategic management often provides

F. Traps In Strategic Management

G. Guidelines For Effective Strategic Management

Strategic management should not be a bureaucratic mechanism that continues to rotate

Important guidelines for effective strategic management require open-mindedness. The

No organization has unlimited resources. No company can obtain an unlimited amount of

Strategic decisions require trade-offs such as short-term versus short-term considerations or

1. Explain the definition of strategic management in your opinion?

2. Explain 3 (three) stages of the strategic management process!

3. Name some of the opportunities and threats faced by many companies!

• Availability of capital that cannot be over-taken

• Consumers expect operations and green products (environmentally friendly)

• Marketing moves quickly to the internet