POLYTECHNIC UNIVERSITY OF THE

PHILIPPINES
LOPEZ, QUEZON
LOPEZ BRANCH

INSTRUCTURAL MATERIALS FOR STRATEGIC MANAGEMENT

(BUMA 20023)

Compiled by:
Mrs. Sarah G. Tabien
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Chapter 1: A Strategic Management Model

Objectives:
1. Define strategic management
2. Identify the strategic management model
3. Explain the meaning of strategic planning

Introduction:
Strategic management is the process of setting goals, procedures, and objectives in order
to make a company or organization more competitive. Typically, strategic management looks at
effectively deploying staff and resources to achieve these goals. It’s all about identification and
description of the strategies that managers can carry so as to achieve better performance and a
competitive advantage for their organization.

Strategic Management Defined

Strategic Management is a continuous process of strategy creation. It involves strategic
processes like strategic analysis and decision-making, strategy formulation and implementation,
and strategy control with the primary objectives of achieving and maintaining better alignment
of corporate policies, priorities, and success.
Strategic analysis consists of a systematic evaluation of variables currently existing in the
external and internal environments while strategic decision-making is deliberately bringing
together the right resources for the right markets at the right time. Strategy formulation is
designing strategies on the business and corporate levels. Strategy implementation is employing
these crafted strategies to achieve organization set goals and objectives while strategic control
is the application of an appropriate monitoring and feedback system.

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The Strategic Management Model

Strategic Management Organizational Success

Organization Input
Process - Strategic Intelligence
- Management/Employees
- Strategic Analysis - Strategic Thinking
- Financial Resources
- Strategic Decision-making - Organizational
- Facilities/ Equipment
- Strategy Formulation Competitiveness
- Infrastructures
- Strategy Implementation - Comparative Advantage
Processes
-Strategic Control - Strategic Performance

The strategic management model shows the relationships between and among the input,
process, and output. The input in this model includes organizational variables like management
and employees, financial resources, facilities and equipment, infrastructures, and processes. The
strategic management process consists strategic analysis, strategic decision-making, strategy
formulation, strategy implementation, and strategy control.

When these specific processes are executed and managed creatively, distinctly, and strategically,
the organization can ultimately achieve organizational success. In particular, the output is
exhibited in the strategic intelligence acquired, strategic thinking mode developed,
organizational competitiveness, comparative advantage, and strategic performance attained by
the organization.

Strategic Planning
Both strategic management and strategic planning have the same goals and objectives, that is,
to devise a strategic mode of preparing, addressing, and steering organizations to where they
want to go. Particularly both undertakings endeavor to understand the strategic position of
organizations – their set goals, preferred choices, and deliberate and calculated strategies.
Strategic planning is defined as continuous, repetitive, and competitive process of setting the
goals and objective that an organization aims to attain, defining the means to achieve them, and
assessing the best way to realize them in the context of the prevailing environment while
measuring performance through set standards, and periodically but continuously conducting
reassessments.

Types of Strategic Plans

1. Medium/Long-range Plan- prepared in the context of the coming three or five, ten or
more years. It describes the major factors or forces that affect the organization’s long-
term objectives, strategies, and resources required.

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2. Annual/yearly plan-short term; succinctly describes the organization’s present situation,

its goals and objectives, strategies, monitoring mechanisms, and the budget for the year
ahead.

Organizational Vision
To help organizations achieve strategic decision, they need to articulate and have a commonality
in vision, mission, and goals. The interrelationship between and among these three variables are
essential in the organizations’ thrust of achieving competitiveness.
The organizational vision is an inspirational statement of what the organization hopes to achieve
at some point in the future. It is the image of what an organization desires to achieve. It is short
and succinct, but it carries an extraordinary force that will stir, motivate, and inspire employees
to work and refocus towards its desired optimal future state.

Mission Statement
The mission statement differs from the organizational vision. This defines the current purpose of
an organization; it answers what the organization does, for whom it is done, and how it does
what it does.
Mission statement are likewise short and easy to remember. It gives employees a better
perspective on how their tasks contribute to the attainment of organizational goals. Oftentimes,
vision statements are more enduring compared to mission statements. Mission statements are
expected to change in the context of shifting economic realities or unexpected circumstances like
challenges, threats, and even opportunities.

Organizational Goals and Objectives

To operationalize the mission statement, organizational goals and objectives are defined. All
organizations have set goals. These are referred to as organizational goals. Organizational goals
are pursued to make the specified strategies succeed. They vary and are essentially dependent
on their respective purpose and direction. One of the implied basic goals of any organization is
to use economic resources efficiently and effectively such that survival, if not profit, is at least
secured, thus, ensuring the continuity of the organization. Goals are macro, encompassing in
perspective, and prospective in nature.

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1.
Objective

4. Organizational 2.
Objectives Goals Objective

3.
Objective

Values and Value System

Organizations are guided by values, which vary from one organizations to another. Values are
inherent roots of motivation within an individual, an organization, a community, or a nation. They
are by nature, ingrained and thus are more stable and enduring.
Values are generally exhibited in 2 different ways, namely, beliefs and attitudes. More
particularly, beliefs are cognitive manifestations while attitudes are characteristically behavioral.
They are fundamental and intricately integrated in the particular organization’s value system.

Values
Dreams
Interests and
Aspirations

Value
Leadership and
Management
System Philosophies
Styles

Ethical Expectations
Practices

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The value system is characteristically broader in scope. This indicates the values ranked by
organizations. Because values are distinct, they differ from one organization to another.

Assignment:
1. Make your own Mission and Vision and explain.

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Chapter 2: Challenges in the External Environment

Objectives:
1. Perform environmental scanning
2. Employ SWOT analysis using a company
3. Identify external forces that may prove beneficial or not to an organization.

Introduction:
There are always a number of external factors that affect customers, and if a marketing team is
good they will take all of them into consideration. The external environment of organizations is
closely related to the survival and development of organizations. It helps to determine
opportunities and risks. A company has to react to what happens outside the business. The
external environment will alter the internal elements of the business and their objectives and
strategic could potentially change.

Scanning the Environment

Organizational Intelligence refers to the expertise, insight, and wisdom possessed by an entity. It
serves as a valuable guide to its journey to becoming competitive. Environmental scanning is the
study and interpretation of the forces in the external and internal environments. The external
includes social, economic, political, technological, and environment forces that may influence an
organization, an industry, or any entity. The competitive environment covers competitors,
suppliers, stakeholders, culture, and the government. Environment scanning is carefully
monitoring the surroundings with the end goal of ascending early indications of prospects and
challenges that may influence the organization’s present and future plans.

Modes of Environment Scanning

1. Undirected Viewing – individual is exposed to information with no specific information
need in mind. The sources of information are wide-ranging and large chunks of
information are quickly dropped from the individual’s attention.
2. Conditioned Viewing – individual directs viewing of information to specified facts and data
to able to assess their general impact on the organization. It is not an active search but a
mere viewing of information.
3. Informal Search – it actively looks for information to increase knowledge of a particular
issue. It essentially involves a relatively unstructured effort where the objective is to
gather information to expound the issue.
4. Formal Search – effort exerted by the individual is deliberate and planned. The search is
both focused and structured and the research methodology is clearly enumerated and
followed.

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The SWOT Matrix Analysis

The SWOT is a structured assessment tool used to evaluate an organization, industry, a place or
even a person in terms of set parameter like strengths, weaknesses, opportunities, and threats.
 Strengths are features that organizations possess, thus, giving it significant advantage
over things.
 Weaknesses are characteristics that place organizations at a disadvantage relative to
others, and may just be limitations or vulnerabilities of organizations.
 Opportunities are possibilities in the external environment that organizations can exploit
to their advantage.
 Threats are challenges in the external environment that can cause problems to
organizations.

The External Environment

The external environment today is highly complex. This fundamental paradigm conspicuously
characterizes the global scenario. Nation possess different levels of growth and development.
For example, power relationship has become more dynamic, volatile, uncertain. Complex, and
threatening.

Social Forces
Refers to important issues that are characteristics of global and local societies. Society consists
of individuals, families, and communities, including their beliefs, aspirations, traditions, and
communities.
 Changing Social Structures – refers to the network of social institutions that includes the
family and the community.
 Aging Population/demand for Health Services – there are more maturing and aging
individuals today. This reality has fundamental social implications like the need to provide
elderly people with adequate medical care and community service.
 Sophisticated Lifestyle of People – compared to the past, the lifestyles of people today
have dramatically changes too.
 Cross- cultural Diversity – Similarly, the global community is getting figuratively smaller.
Workplaces are shifting and people in the global community ae either working or
migrating to every part of the world.

Political Forces
These issues are political independence, changing government, balance of power, terrorism,
suicide bombings, global alliance, and chemical and nuclear warfare.
 Political Independence/Changing governments – Political sustainability has become the
focus and concentration of developed and power-driven countries. They fight wars to
attain and maintain political supremacy.

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 Terrorism/Suicide Bombings – the bloody and painful transition toward equality of basic
human rights and the right to a better life have brought about critical security problems
like this.
 Chemical and Nuclear Threats – the spread of deadly chemicals, viruses, and other forms
of microorganisms pose dangerous effects.
 Global Alliances – nations are aligning themselves for self-preservation and more so, for
global stability and strengths.

Economic Forces
Economic realities have concomitantly come to forefront. Economic issues greatly affect the
growth and development of a nation.
 Globalization – can be viewed from 4 perspectives: Products, People, Ideas, and Money.
 Competitors and suppliers – aggressive competitors and creative suppliers compete to
get a larger slice of the market, both energizing the industry and business environment.
 Fall of financially stable organizations – last years were the downfall of a number of
financially successful organizations that were managed by respectable and competent
presidents and chief executive officers.
 Increasing oil prices – the never-ending increases in oil prices has been creating economic
instability in global communities.
 Economic Trade Agreements – economic trade agreements among nations have likewise
become a vital bargaining power in a country’s economy.
 Emerging Markets – closely interrelated to the political, social, and economic growth and
development of a country is the emergence of different markets.
 Rise of China – one of the most patent economic markets in the world today is China. It is
seen both as a supplier and a big market.

Technological Forces
Another important catalyst of competition is technology.
 Communication technology – this saw the proliferation of mobile phones, popularity of
text messaging, convenience of send fax messages. The impacts of these changes in the
area of communication cannot be emphasized.
 Computer-integrated business – Computer-aided manufacturing makes production more
efficient, computer-aided design results in concise outputs while telecommunication
technology makes physical distances immaterial.
 E-banking – baking transactions like deposits, withdrawals, and payment can be done
online.
 E-learning – one of the most recent developments in education is distance or online
learning.
 Digital medicine – by these, performing medicinal method are more precise, cheaper, and
less-time consuming.

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 E-security – security is another vital global issue. The use of information technology is
inevitable in manufacturing missiles and other forms of ammunitions, safeguarding,
securing etc.

Environmental Forces
Environmental responsibility is the urgent call of the global neighborhood.
 Climate Change/use of Biodegradable Materials – the effects of environmental
degradation, malpractices, neglect, and indifference are critical and serious.
 Environmental Waste Management – pollution levels are high
 Preservation of Rainforest and Marine Life – continuous depletion and denudation may
result to more destructions

Assignment:
Explain SWOT Analysis
Differentiate the 5 forces

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Chapter 3: Challenges in the Internal Environment

Objectives:
1. Assess the internal environment
2. Appreciate the role of culture
3. Classify the types of competitors

Introduction:
While the external environment plays an essential role in the survival and competitiveness of an
organization, the internal environment presents a more direct impact on how organizations
should conduct themselves toward success.

The Internal Environment

Is the setting in which an organization locally exists. These are government, culture, the
stakeholders, competitors, suppliers, customers, and the community.

Government: The Business Caretaker

The government is the sole legitimate institution tasked with overseeing organizational
operations in the country. In the implementing these administrative functions and
responsibilities, the government undertakes the following:
1. Provides the needed infrastructure
2. Creates an atmosphere of fair and robust competition among industry and company.
Eliminates unfair and illegitimate practices.
3. Formulate business polices, implements business operating guidelines, and regulates
the conduct of business activities.

Cultural: A Communal Convergence

The Philippines has its own culture – a culture that was greatly influenced by diverse cultures:
1. The Trait of Hospitality
2. The practice of Bayanihan
3. Filipinos generally take care of their parents, old relatives, siblings
4. Pakikisama and Utang na loob
5. The habits of ningas kugon, mañana, and Filipino Time
6. The attitudes of crab mentality and bahala na
7. The virtue of resiliency
8. The idea of kanya-kanya
9. The consciousness of being politically involved

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Stakeholders: The business Investors

Are assets to the country. They provide opportunities for exchange of products and services. They
initiate the business operations and compete among themselves. They boost and energize
economic activity, provide employment to the community, and help the government by paying
business taxes.

Competitors: The Business Threats

Competition is an economic scenario where nations, communities, organizations, companies,
and individuals offer and sell their products and services. They fall in different categories:
 Same Products
 Similar Products
 Substitute Products
 Different Products
Competitors also differ with respect to the strategies they adopt:
1. Complementary Competition- Some companies appear to compete with themselves
2. Collaborative Competitors- there are companies whose relationships among each other
are strategic and cooperative. They are in “friendly” competition.
3. Corrupted Competition – some companies produce “fake” products. They produce and
sell these at low prices.

Customers: The Business Challenge

Customers are the focus of companies’ business plans and programs and the thrust of their
strategies. Without consumers, companies have no reason to exist

Suppliers: The Business Partners

Suppliers refers to individuals and companies engaged in the delivery of raw materials,
machinery, technology, labor, expertise, skills, and other form of business.

Community: The Business Concern

The community is the intermixture of peoples coming from all walks of life with different
“provincial or city cultures”, different values, aspirations, traditional beliefs.

Assignment:
1. Explain why business is the caretaker of a business. Give at least 2 examples.

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Chapter 4: Business Strategies

Objectives:
1. Discuss the supply chain management
2. Define inventory management
3. Contrast manufacturing from assembly

Introduction:
Because of the volatility of the environment, business survival has become more challenging
than ever. There is a greater demand for an honest review of functional activities and
development of a proactive mindset through various strategic modes of growth and
competitiveness.

Value Chain Analysis

This is a general term that refers to a sequence of interlinked undertakings that an organization
operating in a specific industry engages in. it looks at every phase of the business from the time
of procurement of raw materials to the time its product reaches its eventual end users or
consumers. This concept is conceptualized in supply chain management.

Supply Chain Management

Is a broad continuum of specific activities employed by a company. It consists of the following:
 Purchasing or supply management which includes the sourcing, ordering, and inventory
storing of raw materials, parts, and services.
 Production and operation, also known as manufacturing and assembly
 Logistics which is the efficient warehousing, inventory tracking, order entry,
management, distribution and delivery to customers
 Marketing and sales which includes promoting and selling to customers
Logistics
Supply Management - Warehousing
- Sourcing and Ordering - Scheduling
- Inventory Management - Transportation
- Delivery

Organization

Production/Operation Maketing and Sales

- Manufacturing - Promotion
- Assembly - Selling

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Inventory Management
The role of inventory is to buffer uncertainly. It includes all purchased materials and goods,
partially completed materials and component parts.

Inventory Models
The values of inventory management are evidently reflected in the minimization of costs. This is
achieved when organizations develop efficient ways of procuring their raw materials like
accurately forecasting demand and ordering bulk to avail of quantity discounts.

Products and Operations

Are processes that transform operational input into output to satisfy consumer needs and
requirements. This transformational process consists of manufacturing and assembly.
Manufacturing is the process of producing goods using people or machine resources.
Assembly is the process of putting together raw materials into a desired output.

Marketing and Sales

Products are produced and services are rendered for ultimate release to customers. Therefore,
there is a need to market these merchandise to interested buyers. Companies adopt different
modes of marketing to attract and sell to customers. They can study the unique purchasing
patterns of buyers and determine what will translate their desire for the products into actual
purchase. This includes that the supply chain management is a complete sequence of processes
that includes purchasing, production, an operation, delivery, and marketing and sales.

Growth Strategies
Growth Strategy is one of the most important considerations for every organization. It is a mode
adopted by an organization to achieve its main objectives of increasing in volume and turnover.
It can also be internal or integrative.

Competitive Strategies
Organizations cannot avoid the permeating competition existing in the business environment.
Thus, competitive strategies are designed to deal with this so-called reality of hyper competition.
Competitive Strategies are essentially long term action plans prepared with the end goal of
directing how an organization will survive and compete.

Assignment:
1. Explain Marketing and Sales.

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Chapter 5: Corporate Strategies

Objectives:
1. Define the integrative growth strategies
2. Assess the Boston Consulting Group Model
3. Discuss the role global strategies

Introduction:
As business focus on developing their degree of internal competitiveness, companies adopt
external growth strategies. These are alternative models of addressing the challenges
confronting organizations.

Integrative Growth Strategies

Integrative growth strategies, which are essentially external growth strategies, involve investing
the resources of the organization in another company or business to achieve growth goals. The
two types of vertical integration are backward integration and forward integration.

Vertical
Horizontal Integration
Integration Organizational
- Backward
-Forward

1. Horizontal Integration is a strategy where the organization acquires another competing

business.
2. Vertical Integration is the process of consolidating into an organizational other companies
involved in all aspects of a product’s or a service’s process from raw materials to
distribution. It is an integrated growth strategy adopted by an organization to gain control
over its suppliers and distributors.
a. Backward Integration is when an organization may carry out backward integration
to better control its supply chain and ensure a more reliable or cost-effective
supply of input.

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b. Forward Integration is carried out when the organization buys distribution

companies that are part of its distribution chain. In effect, the organization is able
to remove the intermediary, thus, eliminating distribution costs. This allows an
organization to reinvent its marketing outlook and redesign its marketing
strategies.

The Boston Consulting Group Model

The Boston Consulting Group Growth-Share paradigm started to make its impact on corporate
strategy in the early 1970s. the BCG model was develop by Bruce Henderson of the Boston
Consultant Group. This model classifies the product or business units of an organization in terms
of two parameters, name, market share and market growth, in relation to the marketing leader.
Market Share is the relative sales percentage of a company in relation to the total sales
percentage of the market in consideration. This metric value gives a general idea of how the
company stands with respect to the markets and its competitors.
Market growth refers to an increase in demand over time. It may be high or low.

Global Strategies
Global Strategies cover three main types: international, multinational, and global. Companies
who might want to sell their excess products outside their home markets pursue international
strategies. A company is said to be doing international business although its focus is the home
market. On the other hand, a company engage on multinational strategies when it is involved in
a number of markets outside the home country. The challenge in undertaking multinational
strategies is to sell competitive and distinct products and services that are suited to the customer
demands of different countries. In global strategies, the company treats or considers the world
as a whole, one market, and one source of supply with slight local variations.

Assignment
1. Explain the Boston Consulting Group Model.

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Chapter 6: Organizational Systems

Objectives:
1. Discuss the different types of organizational structure
2. Illustrate the different types of organizational structure
3. Demonstrate the role of leadership

Introduction:
To successfully implement the strategies of the organization, its structure must support its unique
system while the entire machinery of the company must be aligned to the direction where it
wants to go.

Organizational Structure
Organizational structure refers to the system or mode by which a group of individuals is able to
achieve its desired goals. The organizational structure of an organization/company is subject to
many factors like technological breakthroughs by competitors, changes in customer lifestyles,
and those that are environmental in nature.

Types of Organizational Structure

1. Functional Organizational Structures – organizations adopt a specific structural
arrangement for a reason. Structuring an organization effectively requires that the
management should know the goals of the organization, the skills of its people, the needs
and goals of its subordinates, the available resources, and the time, cost, and
environment constraints that are existing. This requires management to bring together
the human, technical, marketing, and financial resources of the organization.
2. Territorial Organizational Structure – As an organization begins to serve its customers
who are spread over a growing geographical area, a territorial structure become a viable
design. In this system, the target market is divided into geographical units according to a
certain area. Personnel familiar with the history of customers in the area, their culture,
their preference, expectations, and habits of living can cultivate the local markets.
3. Product Organizational Structure – organizational division follows a product structure. In
some companies, the sub-businesses are assigned to product group managers, each of
them are given key operating and staff functions.
4. Market-Centered Organizational Structure – companies can structure their business to fit
their markets. A market-centered organizational structure describes the wide range of
structural forms that center on a group of customer needs rather than a region, product
line, or function.
5. SBU Organizational Structure – this division structure raises the issue of whether any
marketing functions should be performed at the corporate staff level. Some companies
maintain a minimum marketing services structure at the corporate level.

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6. Matrix Organization Structure – The matrix structure is efficient for establishing specialist
resources but is best for integrating functions. A matrix is any organization that employs
a multiple “boss” arrangement. One must cut across departmental boundaries to get a
job done.

Choice of an Organizational Structure

 Size of the firm – the size of the firm will indicate the complexity of its organization.
 The products – the nature of the products or products to be sold is another factor that
influences the choice of an organizational structure
 The market – characteristics of the market like geographic dispersion, income class, and
buyer behavior need to be considered in organizing the marketing unit.
 Competition – a firm may find it necessary to organize its marketing efforts following the
requirements of competition.
 Philosophy of Management – a final factor that affects the structure of an organization is
the management philosophy prevailing in the company.

Evaluation of an Organizational Structure

 Facilitating Control – control in an organization involves a comparison of actual
performance with pre-established standards or plans.
 Coordination – the coordination of individual actions is often called team effort. A firm
employing several specialists and line officers at different levels may still produce
ineffective result if efforts are not properly coordinated.
 Providing Information – because markets are dynamic and subject to change, it is
essential for managers to gather information in order in order to anticipate changes and
make decisions accordingly
 Flexibility – to be able to cope with the dynamic and changing environment, the firm
should have an organization that can adjust to changes.

Organizational Components
An organization is an entity composed of people that is structured and managed in such a way
that it is able to achieve its set goals and objectives. An organization generally consists of
elements that act and work together through coordinated activities.
Management refers to the administrative supervision of an organization. It includes leadership,
the organization’s vision-mission, goals, and objectives to attain organizational success.
 Leadership is foremost in the management of any business. A good leader, regardless of
whether he owns or works for the organization, is someone who inspires his employees
and stretches them to their optimum productivity. He is the prime mover and is expected
to lead his employees in the attainment of the organization’s set goals.

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Employees
Employees are expected to give their best in performing their assigned tasks. Several factors
affect their productivity. They are:
 Employee Satisfaction – it is an emotional state where the employee experiences a feeling
of content in the workplace. Any of the following generally bring employee satisfaction:
acceptable salary, fringe benefits, and incentives.
 Employee Involvement – satisfied with his work, conditions, an employee may graduate
to a higher level of organizational relationship called employee involvement. He becomes
more participative in company activities.
 Employee Commitment – this degree of employee relationship is further heightened
when the employee reaches the highest level that is employee commitment.

Facilities and Equipment

These facilities and equipment may be simple and crude as long as they are functioning and
producing the desired output.
 Management of building and site maintenance needs to be appropriate for the type of
business the organization is engaged.
 Management of machinery means making sure that the right types of equipment or
machinery are in place and including the right quantities as needed by organization.
 Management of facilities means that amenities such as washrooms and canteen need to
be in good and healthy working conditions.
 Application of technology has become the unifying force in facilities and equipment
management. Technology asset management refers to the business processes and
enabling information systems that support the management both physical and non-
physical.

Financial Resources
The financial resources of the organization determine, the direction the organization will take
and affect its capability to realize its set business goals and objectives. These business goals and
objectives include spending on other promotional strategies, upgrading or purchasing new
facilities and equipment, experimenting and developing new products, hiring additional
manpower, increasing salaries and wages, training employee, and most significantly, ensuring
continued existence of the organization.

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Organizational Policies
The organizational milieu includes company policies, which are the lifeblood of an organization.
They put organizational structure and system in place. They ensure order, hierarchy of authority,
clear delineation of functions, efficiently, productivity, and good interpersonal relationship. They
make possible the smooth actualization of operations and functions and facilitate the attainment
of set goal and objectives, whether measurable or otherwise.

Assignment
1. Elaborate the factors that affect employee.

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Chapter 7: Strategic Asset Management

Objectives:
1. Define strategic asset management
2. Discuss the importance of intellectual capital to an individual
3. Explain the types of asset management strategies

Introduction:
Strategies are appropriate courses of action formulated by organizations to attain their set
objectives in the light of their vision and mission statement. These strategies include planning,
selection, and analysis.

Intellectual Property Assets

Intellectual property assets refer to assets that result from the activities of the mind. These
properties may be products of purposive research like outcomes of a person’s ingenuity,
brilliance, and creativity, or may just be discovered accidentally.
 Trademarks include all service marks, trade names, designs, logos, seals, and symbols that
are uniquely developed by an individual, a group of individuals, or an organization.
 Software are organized information in the form of operating systems, utilities, programs,
and applications that enable computers to work.
 Original literary, music, and art compositions are unique and distinct
 Trade secrets refers to all types of information, technical, or otherwise, like organizational
philosophy, programs, strategies, processes, financial data, transition data, and lists of
customers and suppliers.

Organizational Monopoly
 The organization solely enjoys the opportunity to use to use this intellectual property, to
optimize its worth, and enjoy the benefits to it
 It safeguards corporate assets by providing legal mechanism for brand protection,
protection of trade secrets by non-disclosure agreements, provision for patents and
copyrights
 It allows organizations to enjoy low cost relationship and increase its competitive
strength.

Human Resource Asset

Human resource assets are the strengths of organizations that consists of collective “expertise,”
personal traits, creative and problem-solving capabilities, managerial, entrepreneurial, and
competency asset skills, and organizational human-centered assets.

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Human Resource Leverage

Possession of human resource assets creates both leverage and a competitive edge. An
organization greatly benefits from ownership of these assets. Organizations need to recognize
and develop the potentials of their human resources, give them full access to opportunities
toward human development, and constantly nurture them. When employees leave the
organization, they bring with them these assets.

Marketing Asset
Market assets are results of market-related intangibles such as brands, company names,
customer loyalty, repeat business, distribution channels, contracts, and agreements.

Infrastructure Assets
Infrastructure assets include positive organizational features like structure, management
philosophy, organizational culture, high involvement practices, quality standards, and technology
that enable an organization to establish its competitive advantage.

Asset Management Strategies

Competency
Learning

Asset
Management
Strategies

Strategic Competitive
Enhancement Innovation

Competency Learning: “Laying the Groundwork”

Competency refers to the knowledge, attitudes, and skills expected of an individual in carrying
out his job task. It is aligned to the organization’s vision-mission. It is a necessary tool for
actualization of organizational plans and the implementation of strategies. It puts emphasis on
evaluating and accountability of performance.

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Strategic Enhancement: “Widening the Horizon”

Another facet of successful intellectual capital management is strategic enhancement. Given a
dynamic environment where product cycles are shorter, where the need to be efficient and cost-
effective has never been that critical, organizations of today have no alternative but to be
uniquely knowledgeable to survive and compete.

Competitive Innovation: “Creating Bargaining Power”

is the best assurance in achieving business sustainability, competitive advantage, and
consequently, creating bargaining power. Sailing away from existing traditional practices.

Assignment:
1. Explain the Intellectual Property Assets and its asset.

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Chapter 8: Strategic Control Mechanism

Objectives:
1. Explain the meaning of strategic control
2. Classify the types of strategic control
3. Analyze the different performance metrics

Introduction:
Strategic evaluation and control is the last phase of the strategic management process. It begins
goals, and objectives and is followed by the formulation of strategies.

Definition of Strategic Control

Strategic control is the process of monitoring the various strategies of the organization and
determining whether there is a parallelism between the organizational milieu and that of the
environment.

Types of Strategic Control According to Purpose

1. Presupposition control is designed to check systematically and regularly whether the
arguments set during the planning and implementation processes are still binding.
2. Implementation control is applied to evaluate whether the intermediate strategies are
consistent with the overall strategy.
3. Strategic surveillance is a monitoring system whereby a broad range of occurrences inside
and outside the organization threatens the implementation of an organization’s strategy.
4. Vigilance control is a special type of strategic control that is applied when immediate
reconsideration of an organization’s strategy/strategies is pursued.

Types of Strategic Control According to Approach

1. Sequential Strategic Control is the traditional way of looking at strategic monitoring. It is
sequential, in that the formulation of strategy is followed progressively by the
implementation of these designed strategies. Once the strategies have been employed,
it is only then that strategic monitoring is carried out.

Formulate Implement Strategic

Strategies Strategies Control

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2. Interactive Strategic Control is the more appropriate for strategic control. Described as
interactive, this approach shows the communicating and collaborative nature of the
processes of strategy formulation, strategy implementation, and strategy control.

Formulate Implement
Strategies Strategies

Strategic
Control

3. Feedback Strategic control is a combination of the sequential and interactive approaches.

Although strategy formulation, strategy implementation, and strategy monitoring appear
to be sequential, the feedback loop is essentially interactive. Constant feedback is
effected with respect to the formulated and implemented strategies.

Performance Metrics
Feedback strategic control is accurately measured by performance. Performance is the ratio of
the results derived from the resources invested by an organization or by the formula:
Performance = Results/Resources

Strategic Management Revisit

It discusses the salient issues and concerns in the corporate and business world and addresses
these challenges through practical and well-tested approaches that are constructive, functional
and valuable.

Facets of Strategy
Strategy can be implemented in different modes of assessing realities as in strategy thinking; in
different degrees of emphasis as in strategy goal; in different ways of designing and
implementing as in strategy formulation an implementation; in different behaviors of perceiving
and comprehending as in strategy attitude; and in different manners of reacting as in strategy
response.

Assignment:
1. Explain the Types of Strategic Control According to Purpose
2. Illustrate the Types of Strategic Control According to Approach

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Chapter 9: The Strategy Framework

Objectives:
1. Understand the beginnings of strategy
2. Distinguish strategy as concept
3. Explain why strategy is a tool

Introduction:
Competition per se is as old as history. It dates back to biblical times when Jacob competed
against Esau to get to birthright from their father, Isaac. To outwit Esau, their mother, Rebekah
sent Esau to the woods so that Jacob could get the blessing of his dying father, Isaac.

Strategy
Strategy was actualized in many forms – from the simplest to the most complicated. It was either
implied or explicitly stated but in all instances, strategy was deliberate. In the past, strategies
were implemented in every facet of living in ruling people and in doing trade. They were
employed in situations like bartering of goods, working to build houses, roads, buildings, and
planning a family, among others
Today, strategy is an entirely new reality. The dynamics of competition has inevitably given it an
unconventional facade and color. Strategy are plans formulated and implemented with the sole
purpose of attaining set goals and objectives.

Strategy as a Concept
1. Strategy is intellectual elasticity – refers to flexibility and adaptability in coming up with
realistic responses to changing situations
2. Strategy is mindset – organizations should develop within their system an outlook that is
deliberate and monitored.
3. Strategy is learning – learning refers any old and new knowledge and competencies,
gained or enhanced from persons, institutions, books, experiences, training, and others.
4. Strategy is national capital – focusing on radical resources productivity to further
economic gains
5. Strategy is intellectual capital – it defines common knowledge as trite and ordinary
because it simply satisfies minimum expectations and knowledge.

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Strategy as a Tool
1. Strategy as information technology – a potent concept of strategy as a tool is information
technology. Its significant impact on mainframes to laptop computers, of designing
products and services, manufacturing, and doing things cannot be overlooked.
Information technology makes work easier, more efficient, and simpler
2. Strategy as balanced scorecard – being able to quantify performance is a competitive
strategy. It gives organizational real measurement figures, thereby allowing them to plan
and devise ways of attaining their set goals.

People as Strategy
Strategy is both a concept and a tool but it is also people. People are strategies in themselves.
They are individuals who possess effective management, leadership, creativity, and monopolistic
intellectual capital. They are executives, managers, supervisors, subordinates, and anyone who
leads, directs, and supports the organization toward the realization of objectives.

Assignment:
1. Give me an example of a strategy.
2. How does people become a part of a strategy?

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Chapter 10: Strategy and National Development

Objectives:
1. Explain the concept of strategic national development
2. Discuss the strategy framework for national growth
3. Discuss the components of the “competitive advantage of nations” model

Introduction:
National Development strategies are comprehensive focusing not only on economic
development but also consider economic, social, political and environmental dimensions in
combination and ensure a synergy among the various policies and programs that contributes for
the common strategy and goals.

Strategic National Development

A nation is a community of people with similar or divergent beliefs, aspirations, and traditions,
living in the same geographic are. The populations of these nations engage in varied activities like
trade, agriculture, mining, research, and education to sustain the conventional routine of
everyday living.

Structure
Structure refers to the operational framework that will serve as a basis for national growth and
development. It sets the context and outlines the agenda on which a nation can drive itself
toward national prosperity and wealth.

Strategy
Nations need strategies to achieve national advancement. Nevertheless, to successfully achieve
this, it needs a national structure. Both structure and strategy should be aptly intercorrelated to
create a good fit. All government set goals. To achieve these goals, policies have to be formulated
and efficient implementation of policies are ensured.

Resources
Resources are the most important supply of competitiveness. The resources in any nation include
natural resources, human resources, technology, and capital. These resources should be
harnessed to give people a better life. By these, a nation can compete with foreign business and
sustain itself comfortably.

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Strategy Framework for National Growth

Phase 1: Imitation – intellectual property rights of the original products of imitated goods are
essentially infringed. As a result, cheaper selling prices are generated due to cheap labor costs
and non-payment of copyrights, trademarks, patents, and other ownership rights. The products
and other duplicable services are sold although quality is poor.
Phase 2: Development – this increase in profits allow for provisions for improvements. From
being in a crude and rudimentary stage, the products are slowly redefined and enhanced. Labor
costs are still low, while the goods and services are better this time.
Phase 3: Enhancement – with enough capital, more investments are now set aside for serious
improvement. Better raw materials and equipment are purchased while qualified workers are
hired to undertake product and service enhancement.
Phase 4: Differentiation – once a product or service is enhanced, serious competition creeps in
due to the increase of prices. Although the enhanced goods are sold the assurance for higher
sales is not certain. Existing products and services will have to be greatly improved.
Phase 5: Innovation – as products and services become more significantly more expensive,
generating sales become challenging. To ensure continuous, innovation is the only alternative.
Inventions are undertaken through quality researches on product and service development.

Assignment:
1. Explain the Strategy Framework for National Growth.

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