WELCOME to Corporate

Management
Prof. Dr. Amit Shah
Frostburg State University
Maryland, USA
 About You
• Name
• Where do you work
• What do you do / your position
• What is your expectation of this class
• What courses have you taken in this program and
what it prepares you for? Other International
Professors?
• Where does Strategy/Corporate Management
(this course) fit in? (Capstone/next slide)
• What percent of organizations use Strategy?
(Fortune)
• Course Outline (Strategic Management Model)

About this Class

 Typical Organization Chart
President

Strategic
Legal
Planning
Counsel
Specialist

VP of VP of VP of
VP of R&D VP of HR
Marketing Operation Finance/Acc

Industrial Quality
Factory
Engineering Control
Manager
Manager Manager

First Shift Second Shift Third Shift

Manager Manager Manager
Organizations that Plan and Use
Strategic Management

75 % / 25 % ratio
 BIG PICTURE – Strategy Analysis
 Introduction: company and brief intro of the company
 Problem Statement
 Mission Statement with Analysis
 Strategy Formulation:
◦ Input Stage:
◦  EFE
◦  Financial Ratios
◦  IFE
◦  CPM
◦ Matching Stage:
◦  TOWS
 SPACE
 BCG
◦ Decision State:
◦  Selection of Strategies
◦  Provide Rationale
 Strategy Implementation
◦ Financial Analysis of Recommended Strategies:
◦  Cost and Revenue Analysis of Each Strategy
◦  EPS/EBIT Analysis
◦  Proforma Income Statement/Balance Sheet
◦ 7S Framework / Other Functional Implementation Issues
 Strategy Evaluation
 Conclusion
 Contingency Plans
CHAPTER ONE
Strategic Management
 Comprehensive Strategic
Management Model
External
Audit
Chapter
3

Generate, Implem. Implem.

Long- Strategies: Measure &
Evaluate, Strategies:
Term Mktg, Evaluate
Select Mgmt
Object. Fin/Acct, Performance
Vision & Strategies Issues
Chapter 5 R&D, MIS Chapter 9
Mission Chapter 6 Chapter 7
Chapter 8
Statement
Chapter 2
Internal
Audit
Chapter 4
Management vs Strategic Management
• Management— The process of planning, organizing, leading, and
controlling the activities in an organization utilizing the available human
and material resources as efficiently and effectively as possible to achieve
organizational objectives.

Management

Strategic
Management

Operations
Management
Strategy and Strategic Management
• Strategy – an organization’s game plan to achieve
its objectives
• Strategist – individuals who are most responsible
for the success or failure of an organization. Ex:
CEO, President, Dean of a College, Entrepreneur,
etc.
• Strategic Management – The art and science of
formulating, implementing, and evaluating cross-
functional decisions that enable an organization to
achieve its objectives.
 Typical Organization Chart
President

Strategic
Legal
Planning
Counsel
Specialist

VP of VP of VP of
VP of R&D VP of HR
Marketing Operation Finance/Acc

Industrial Quality
Factory
Engineering Control
Manager
Manager Manager

First Shift Second Shift Third Shift

Manager Manager Manager
Strategy Example:
 Purpose of Strategic
Management

To exploit and create new and different

opportunities for tomorrow
Organizations that Plan

75 % / 25 % ratio
 Question
• Why do managers not plan or do not
like planning?
 Potential Barriers to Planning
1. Good planning is hard work, and it takes time
2. Managers have many functions to perform -- day-to
day pressures
3. Managers prefer to act on immediate
problems/issues
4. Plans can be used to measure results
5. It often involves serious thinking and extensive
paperwork
6. Lack of senior management beliefs and commitment
to planning- no time/resource commitment to plan
 Potential Barriers to Planning
(Continued..)

7. Group size too large or small to include the collective

leadership
8. No cultural beliefs or rewards for planning
9. Avoidance of tough choices, failure to set priorities and
set budgets
10. Past history and mistakes in previous planning attempts
11. No management of implementation and process of
change
12. Conflict, politics, lack of interpersonal skills among top
decision-makers when working together
 Benefits of Strategic Management
A. Financial benefits – significant improvement in sales,
profitability, and productivity.
B. Nonfinancial benefits –
1. Allows for identification, prioritization, and exploitation of
opportunities
2. Provides an objective view of the management problems
3. Improved coordination and control of activities
4. Minimizes the effects of adverse conditions and changes
5. Effective allocation of resources to opportunities
6. Better communication among personnel
Benefits of Strategic Management
B. Nonfinancial benefits – (continued)
7. Provides unanimity of purpose and direction of efforts
8. Encourages forward thinking
9. Encourages favorable attitude towards change
10. Provides a cooperative, integrated, and enthusiastic
approach to tackling problems and opportunities.
 Business vs Military Strategy

Business Military
• Key similarity – to gain • Key similarity – to gain
a competitive advantage a competitive advantage
by adapting to change by adapting to change
• Key difference – • Key difference – conflict
competition
Strategic-Management Process:
Three Stages

Strategy Formulation

Strategy Implementation

Strategy Evaluation
Strategy Formulation

Vision & Mission

External Opportunities & Threats

Internal Strengths & Weaknesses

Long-Term Objectives

Alternative Strategies

Strategy Selection
Strategy Implementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation
Strategy Evaluation

Internal Review

External Review

Performance Measurement

Corrective Action
 The Stages and Activities in the
Strategic Management Process
Stages Activities
Strategy Conduct Integrate Make
formulation research intuition decisions
with analysis

Strategy Establish
Implementation annual Devise Allocate
objectives policies resources

Strategy Review internal Measure Take

evaluation and external performance corrective
factors action
Integrating Intuition & Analysis

The strategic management process

attempts to organize quantitative and
qualitative information under
conditions of uncertainty.
Integrating Intuition & Analysis
Intuition is based on:
• Past experiences
• Judgment
• Feelings

Intuition is useful for decision making in

conditions of:
 Great uncertainty

 Little precedent

 Highly interrelated variables

 Several plausible alternatives

Strategic Management is Gaining and
Maintaining Competitive Advantage

Competitive Advantage :
Anything that a firm does especially well
compared to rival firms
Achieving Sustained Competitive
Advantage
1. Continually adapting to changes in
external trends and events and internal
capabilities, competencies, and resources

2. Effectively formulating, implementing, and

evaluating strategies that capitalize on those
factors
 SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
External Opportunities and Threats

Analysis of Trends
• Economic
• Social
• Cultural
• Demographic/Environmental
• Political, Legal, Governmental
• Technological
• Competitors
External Opportunities and Threats
Basic Tenet of Strategic Management

Take
Takeadvantage
advantageof
of
External
ExternalOpportunities
Opportunities
Strategy Formulation

Avoid/minimize
Avoid/minimizeimpact
impactof
of
External
ExternalThreats
Threats
Internal Strengths and Weaknesses

Controllable activities performed

especially well or poorly

Determined relative to competitors

Internal Strengths and Weaknesses
• Typically located in functional areas of the firm

• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Management Information Systems
 SWOT Assignment

INTERNAL EXTERNAL
•Strengths and Weaknesses •Opportunities and Threats