Basic Concepts of Strategic Management
Strategic Management - answera set of managerial decisions and actions that determines the
long-run performance of a corporation
Strategic management includes: - answerInternal and external environmental scanning
Strategy formulation
Strategy implementati...
Strategic Management - answer✔✔a set of managerial decisions and actions that determines the
long-run performance of a corporation
Strategic management includes: - answer✔✔Internal and external environmental scanning
Strategy formulation
Strategy implementation
Evaluation and control
strategy formulation - answer✔✔(strategic or long-range planning)
As managers attempt to better deal with their changing world, a firm generally evolves through
the following four phases of strategic management - answer✔✔Phase 1: Basic financial planning
Phase 2: Forecast-based planning
Phase 3: Externally oriented strategic planning
Phase 4: Strategic management
The attainment of an appropriate match, or "fit," between an organization's environment and its
strategy, structure, and processes - answer✔✔has positive effects on the organization's
performance
Strategic planning becomes increasingly important as - answer✔✔the environment becomes
more unstable.
Benefits of Strategic Management - answer✔✔Clearer sense of strategic vision for the firm
Sharper focus on what is strategically important
Improved understanding of a rapidly changing environment
Globalization - answer✔✔the integrated internationalization of markets and corporations
has changed the way modern corporations do business
Innovation - answer✔✔describes new products, services, methods, and organizational
approaches that allow the business to achieve extraordinary returns
Sustainability - answer✔✔the use of business practices to manage the triple bottom line
The triple bottom line involves: - answer✔✔the management of traditional profit/loss
the management of the company's social responsibility
the management of its environmental responsibility
Theories of Organizational Adaptation - answer✔✔Population ecology
Institution theory
Strategic choice perspective
Population ecology - answer✔✔Once an organization is successfully established in a particular
environmental niche, it is unable to adapt to changing conditions.
Institution theory - answer✔✔Organizations can and do adapt to changing conditions by
imitating other successful organizations.
Strategic choice perspective - answer✔✔not only do organizations adapt to a changing
environment, but also have the opportunity and power to reshape their environment
Organizational learning theory - answer✔✔an organization adjusts defensively to changing
environment and uses knowledge offensively to improve fit between itself and its environment
Strategic flexibility - answer✔✔the ability to shift from one dominant strategy to another
demands long-term commitment to development and nurturing of critical resources
also demands that the company become a learning organization
Learning organization - answer✔✔an organization skilled at creating, acquiring, and transferring
knowledge and at modifying its behavior to reflect new knowledge and insights
Organizational learning is a critical component of competitiveness in a dynamic environment.
Learning organizations are skilled at four main activities - answer✔✔Solving problems
systematically
Experimenting with new approaches
Learning from the organization's own experiences and past history as well as from the
experiences of others
Transferring knowledge quickly and efficiently throughout the organization
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