lecture 05 mgt686. review of lecture 04 external audit chapter 3 internal audit chapter 4 long-term...
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LECTURE 05
MGT686
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REVIEW OF LECTURE 04
ExternalAudit
Chapter 3
InternalAudit
Chapter 4
Long-TermObjectives
Chapter 5
Generate,Evaluate,
SelectStrategies
Chapter 6
ImplementStrategies:
Mgmt Issues
Chapter 7
ImplementStrategies:Marketing,Fin/Acct,R&D, CISChapter 8
Measure &Evaluate
Performance
Chapter 9
Vision &
Mission
Chapter 2
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Strategic-Management Model
Strategic-Management Process –
• Dynamic and Continuous• More formal in larger organizations
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Strategic-Management Model
1.Identify Organization’s existing:
• Vision• Mission• Objectives• Strategies
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Strategic-Management Model
2. Perform External Audit3. Perform Internal Audit4. Establish long-term objectives5. Generate, evaluate, select strategies6. Implement strategies7. Measure and evaluate performance
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Benefits of Strategic Management
• Proactive in shaping organization’s future• Initiate and influence activities• Formulate better strategies– Systematic, logical, rational approach
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Benefits of Strategic Management
• Financial benefits– Improvement in sales– Improvement in profitability– Improvement in productivity
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Benefits of Strategic Management
• Non-Financial benefits– Enhanced awareness of xternal threats– Improved understanding of competitors’
strategies– Increased employee productivity– Reduced resistance to change– Understanding of performance-reward
relationships– Enhances problem-prevention capabilities
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Benefits of Strategic Management
1. Identification of opportunities2. Objective view of management problems3. Improved coordination and control4. Minimizes adverse conditions and changes5. Decisions to better support objectives6. Effective allocation of time and resources7. Internal communication among personnel
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Benefits of Strategic Management
8. Integration of individual behaviors9. Clarifies individual responsibilities10.Encourages forward thinking11.Encourages favorable attitude toward change12.Discipline and formality to the management
of the business
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Why Some Firms Do No Strategic Planning
• Poor reward structures• Waste of time• Too expensive• Laziness• Content with success
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Why Some Firms Do No Strategic Planning (Cont’d)
• Fear of failure• Overconfidence• Prior bad experience• Self-interest• Fear of the unknown• Suspicion
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Business Ethics and Strategic Management
Business ethics defined:–Principles of conduct within organizations
that guide decision making and behavior.
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Business Ethics and Strategic Management
Good business ethics:
–prerequisite for good strategic management
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Business Ethics and Strategic Management
Code of business ethics:
–Provides basis on which policies can be devised to guide daily behavior and decisions at the workplace
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Business Ethics & Strategic Planning
Business actions always unethical include:
• Misleading advertising• Misleading labeling• Environmental harm• Poor product or service safety• Insider trading• Dumping flawed products on foreign markets
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Nature of Global Competition
Companies conduct business across bordersInternational or multinational corporations
Parent company Host country
• Strategy implementation more difficultCultural differences
Norms, values, work ethics
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Advantages of International Operations
• Absorb excess capacity• Reduce unit costs• Spread economic risks over wider markets• Low-cost production facilities• Competition may be less intense• Reduced tariffs, lower taxes• Economies of scale
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Disadvantages of International Operations
• Different social, cultural demographic, legal forces may create difficult communication
• Weaknesses of foreign competition may be underestimated
• Barriers to communication and effective management of personnel
• Complications from different monetary systems
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