Chapter 1

The Nature of Strategic

Management

Instructor: ker Channarin 1

 CHAPTER OUTLINE
 What is Strategic Management?

 Key Terms in Strategic Management

 The Strategic-Management Model

 Benefits of Strategic Management

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 CHAPTER OBJECTIVES
 Describe the strategic-management
process.
 Define and give examples of key terms
in strategic management.
 Discuss the nature of strategy
formulation, implementation, and
evaluation activities.
 Describe the benefits of good strategic
management.
Instructor: ker Channarin 3
 Strategic Management –
Defined

The process for formulating,

implementing, and evaluating,
cross-functional decisions that
enable an organization to
achieve its objectives.

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 Strategic-Mgt. Process
Three Stages

Strategy Formulation

Strategy Implementation

Strategy Evaluation
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 Strategy Formulation

 The development of long-range plans for

the effective management of
environmental opportunities and threats,
in light of corporate strengths and
weaknesses.
 It includes defining the corporate mission,
specifying achievable objectives,
developing strategies, and setting policy
guidelines.
Instructor: ker Channarin 6
 Strategy Implementation

 The process by which strategies and

policies are put into action through
the development of program,
budgets, and procedures.
 This process might involve changes
within the overall culture, structure,
and/or management system of the
entire organization..
Instructor: ker Channarin 7
 Strategy Evaluation

 The process in which corporate

activities and performance result are
monitored so that actual performance
can be compare with desired
performance.
 Managers at all levels use the resulting
information to take corrective action
and resolve problem

Instructor: ker Channarin 8

 Key Terms
 Strategists – Firm’s success/failure
 Vision Statement –
 Mission Statement
 Opportunities & Threats (External)
 Strengths & Weaknesses (Internal)
 Strategies :
 Objective
 Policies

Instructor: ker Channarin 9

Figure 1.1 Comprehensive Strategic-Management Model

External
Audit

Chapter 3

Long-Term Generate, Implement Implement Measure &

Vision
Objectives Evaluate, Strategies: Strategies: Evaluate
&
Select Mgmt Issues Marketing, Performance
Mission
Strategies Fin/Acct,
R&D, CIS
Chapter 2 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9

Internal
Audit

Chapter 4
 Who perform strategic
management
 Large Corporations :
 The Chief Executive Officer (CEO)
 Vice President : (Ex: Production, Marketing ...)
 General Managers of Divisions
 Small Business :
 The Owner
 Entrepreneur
 Non-Government Organizations (NGO's) :
 Home Office/ Country Coordinators /
Representatives
 Senior Coordinators of Programs, Administration
and Finance, etc.

Instructor: ker Channarin 11

 Roles of Board of Directors
 The Board represents the interest of the
Stockholders (owner) of the company
 The Role of the Board is to review and approve
strategic plans prepared by the CEO and other
senior managers of the Corporation.
 Traditionally, Board of Directors have not been
directly involved in the strategic management
process, though this is changing as Boards are
now taking a more active role with regards to
strategic management.

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 Benefits of Strategic Management

Strategic management provides a clear

direction for the Organization, its managers
and staff.
 Managers who have good strategic
management skills are often more alert to
environmental changes including potential
threats and new business opportunities
 Strategic management encourages a more
Proactive, as opposite to Reactive,
management position.
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 Benefits of Strategic Management

Strategic management promotes

efficient use of organizational
resources.
 Finally, given the rapidly changing
business environment, good strategic
management skills are essential for
the long-term survival of the
organization

Instructor: ker Channarin 14