BUS501: Strategic Management

• Strategy: the formulation of organizational missions, goals, objectives, and action plans for achievement that explicitly recognize the competition and the impact of outside environmental forces
• Strategic Planning: the systemic determination of goals and the plans to achieve them
• Strategic Intent: a tangible corporate goal; a point of view about the competitive positions a company hopes to build over a decade
• Strategy Formulation: the entire process of conceptualizing the mission of an organization, identifying the strategy, and developing long-range performance goals (Belcourt & McBey)

Henry Mintzberg's 5 Ps of Strategy:

1. Plan: An intended course of action a firm has selected to deal with a situation.
2. Purpose (also sometimes referred to as 'Pattern'): A consistent stream of actions that sometimes result from a deliberate plan and sometimes the result of emergent actions based on reactions to environmental changes or shifting of assumptions.
3. Ploy: A specific maneuver at the tactical level with a short time horizon.
4. Position: The location of an organization relative to its competitors and other environmental factors.
5. Perspective: The gestalt or personality of the organization.

Corporate Strategies are organizational-level decisions that focus on long-term survival.

Grouped within Corporate Strategies are:

• Restructuring Strategies- options include:
  • Turnaround strategy: an attempt to increase the viability of an organization.
  • Divestiture: the sale of a division or part of an organization.
  • Liquidation: the termination of a business and the sale of its assets.
  • Bankruptcy: a formal procedure in which an appointed trustee in bankruptcy takes possession of a business's assets and disposes of them in an orderly fashion.
  • Liquidation is the least attractive alternative.
• Growth Strategies- growth can be achieved in several ways:
  • Incremental: obtained by expanding the client base, increasing products/services, changing distribution networks, using technology.
  • International: seeking new customers or markets internationally.
  • Mergers and Acquisitions: Merger - two organizations combine resources and become one. Acquisition - is the purchase of one company by another.
• Stability Strategies: These are maintenance strategies where companies do not wish to see their companies grow and so their strategic HRM practices remain constant. These can be called status quo, neutral, or do-nothing strategies.

Business strategy: Plans to build a competitive focus in one line of business.

The Strategic Planning Process Steps:

1. Establish the mission, vision, and values:
   • Vision statement: a clear and compelling goal that serves to unite an organization's efforts
   • Mission statement: an articulation of a view of a realistic, credible, and attractive future for the organization.
   • Values: the basic beliefs that govern individual and group behavior in an organization.
   • The book discusses the formulation of missions, goals, and objectives. We are going through this process within my own workplace. In writing the Corporate Strategy, we quickly realized we first had to see our mission and goals and what objectives need to be accomplished before we could get to the next step. We needed to understand where the business was going or where we wanted it to go. By doing this, we could then work on the different strategies to get there.
     • The articulation of values serves these important purposes:
       • Conveys a sense of identity for employees
       • Generates employee commitment to something greater than themselves
       • Adds to the stability of the organization as a social system
       • Serves as a frame of reference for employees to use to make sense of organizational activities and to use as a guide for appropriate behavior
2. Develop objectives:
   • Objectives are an expression, in measurable terms of what an organization intends to achieve.
   • Goals can be hard or soft.
     • Hard goals always include numbers, usually relative to the performance last year or the competition. They are action-oriented and specific, such as "decrease expenses in 2012 by 5%".
     • Soft goals usually define the targets for the business' social conduct and may not always be quantifiable. They may include ethical and environmental responsibility, providing a working environment free of discrimination, or professional development opportunities.
3. Analyze the external environment: Organizations must be aware of changes in the external market. Changes can include socio-cultural factors, laws and regulations, technological advances, and demographics. The external scan can assist with making reactive or proactive changes. An effective tool to monitor capabilities and deficiencies is a SWOT analysis that measures Strengths, Weaknesses, Opportunities, and Threats.
4. Determine the competitive position:
   • Organizations must create a value proposition: a statement of fundamental benefits of the products or services being offered in the marketplace.
5. Identify the competitive advantage.
   • Competitive advantage can be defined as the characteristics of a firm that enable it to earn higher rates of profits than its competitors.

A competitive advantage can be achieved by utilizing the company's resources, which are:

• Tangible Assets - the organization assets that have substance and can be consumed.
• Intangible Assets - the organizational assets that are not concrete, such as reputation and goodwill.
• Capabilities - the collective skills, abilities, and expertise of an organization.

Source: Brightline: Henry Mintzberg, https://www.youtube.com/watch?v=CyT8MMQB2FA
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