DEFINING

STRATEGIC MANAGEMENT

Prof.Dr.Dr.Dr.H.C. Constantin BratianuFaculty of Business Administration

Academy of Economic Studies

Bucharest, Romania

DIMENSIONS

• Thinking

- Entropic >>> To deal with time orientation,

and with change

- Nonlinear >>> To deal with complexity

- Random >>> To deal with uncertainty

- Intelligent >>> To get the best solutions

- Creative >>> To generate new solutions

Strategic Thinking Changing Environment

TIME - DIMENSIONS

• Time

Past Future

Achievement

Goal

DIMENSIONS

• Dynamic Equilibrium

Fi

Fe

Fi = Fe

DIMENSIONS

• Competitive advantage

STRATEGIC MANAGEMENT

• Based on strategic thinking

• Deals with the future achievements

• Aims to get a dynamic equilibrium between internal

forces and external forces

• Aims to get a competitive advantage

DEFINITION

• Strategic management consists of

the analysis,

decisions,

and actions

an organization undertakes in order

to create and sustain

competitive advantages.

INVENTOR STRATEGIST

OPERATOR PLANNER

Imagination

Time Horizon

Broader

Narrow

Present Future

STRATEGIC LANDSCAPE

OPERATOR

• Most of us try to be excellent at performing in our

present time, and don’t get a lot of time for strategic

thinking.

• The magic word for this kind of work is efficiency.

We do our best to be more efficient, performing

almost each day same kind of routines.

• Einstein said that the definition of insanity is doing

the same thing over and over again and expecting a

different result in the future.

INVENTOR

• This is characteristic for people with creative minds.

• A climate for innovation within an organization is a

big factor in supporting creative people.

• Einstein: Imagination is more important than

knowledge.

• One must recognize and exploit opportunities to

bring new innovations to the table.

PLANNER

• A planner is looking into the future but only as an

extension of the present routine.

• Planning from the operational management could be

an example, since it is done for one calendar year,

that means for known resources and a quite

predictable future

• A planner is using mostly an analytic mind and a

deterministic thinking

STRATEGIST

• This is the land of strategic opportunity since it

integrates both broader imagination and long term

thinking.

• The dominant thinking models are: entropic,

nonlinear, probabilistic, intelligent, creative and

positive.

• Good strategists have the ability to see opportunities

and to transform them into successful events, by

designing and implementing changes.

CREATE SCENARIOS

• A scenario is a vivid representation of what you think the future

environment will be down the road.

• It is like a story of both events and outcomes that you can anticipate.

It is not just a single forecast, but a range of reasonable or plausible

outcomes that could unfold in pursuit of your strategic target.

• Scenarios are important because they channel your thought process

with regard to opportunities and hazards into a plan.

• Scenarios allow you to assess the uncertainties, complexities, and

unpredictability of the future. The ability to look ahead in the face of

uncertainty and act on your insights and experience allows you to be

prepared for whatever really happens, whether it is positive or

negative.

PROCESS OF SM

Basic structure

Strategic

Analysis

Strategy

Formulat

ion

Strategy

Implementat

ion

Analysis

Decisions Actions

STRATEGIC ANALYSIS

Vision

Mission

Internal

Analysis

External

Analysis

SWOT

Analysis

STRATEGY FORMULATION

International

Strategies

Corporate-level

Strategies

Business-level

Strategies

SWOT ANALYSIS

• SWOT: S –Streangths

W – Weaknesses

O – Opportunities

T – Threats

• Internal analysis

- strong points

- weak points

• External analysis

- opportunities

- threats

SWOT ANALYSIS

Weak points Strong points

Opportunities Threats