Study Question 2: What is the strategic

management process?
 Analysis of mission:
 The reason for an organization’s existence.
 Good mission statements identify:
Customers
Products and/or services
Location
Underlying philosophy
 An important test of the mission is how well it serves the
organization’s stakeholders.

Management - Chapter 9
5
Study Question 2: What is the strategic
management process?
 Analysis of values:
 Values are broad beliefs about what is or is not appropriate.

 Strong core values for an organization helps build institutional

identity, gives character to an organization, and it backs up the

mission statement.
 Organizational culture reflects the dominant value system of the

organization as a whole.

Management - Chapter 9
6
Study Question 2: What is the strategic
management process?

 Organizational culture 
 Shapes the values of managers and other
organization members.
 Points people in common directions.
 Helps build institutional identity.
 Gives character to the organization in the eyes of
employees and external stakeholders.
 Backs up the mission statement.
 Guides the behavior of organizational members in
meaningful and consistent ways.

Management - Chapter 9
7
How external stakeholders can be valued as
strategic constituencies of organizations.

Management - Chapter 9
12
Strategy Formulation
Deciding what new businesses to enter,
What businesses to abandon,
How to allocate resources,
Whether to expand operations or diversify,
Whether to enter international markets,
Whether to merge or form a joint venture,
How to avoid a hostile takeover.

Copyright ©2013 Pearson Education, Inc.

publishing as Prentice Hall 1-24
Stages of Strategic Management
Strategy implementation
 requires a firm to establish annual objectives, devise
policies, motivate employees, and allocate resources so
that formulated strategies can be executed
 often called the action stage

Copyright ©2013 Pearson Education, Inc.

publishing as Prentice Hall 1-26
Stages of Strategic Management
Strategy evaluation
 reviewing external and internal factors that are the bases
for current strategies, measuring performance, and
taking corrective actions

Copyright ©2013 Pearson Education, Inc.

publishing as Prentice Hall 1-28
Stages of Strategic Management
Strategy formulation, implementation, and evaluation
activities occur at three hierarchical levels in a large
organization: corporate, divisional or strategic
business unit, and functional
Strategic management helps a firm function as a
competitive team

Copyright ©2013 Pearson Education, Inc.

publishing as Prentice Hall 1-29