Lecture 01. strategic management in early times pdf

Management Rules

1. Dr. Hisham Sharawy
July-Aug 2018
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Strategic Management

2. General Topics
•1Management and organization + Orientation
•2Organizational culture and environment
•3Decision making
•4Foundations of Planning
•5Strategic management
•6Organizational structure and design
•7Managing groups and teams
•8Managing change and innovation
•9Managers & Communication
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3. General Topics
•10Employee Career Management ang job satisfaction
•11Motivating employees
•12Managers as Leader
•13Foundations of control
•14Final Exam & Presentations
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4. Day One Agenda
•Management concepts
•Level of management
•Orientation
•Organizations (Types, structure and internal releationships)
•Organizations’ culture and environment
•Decision making
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5. Management
Management refers to the tasks and activities
involved in directing an organization or one of its
units: planning, organizing, leading, and controlling.
The process of reaching organizational goals by
working with and through people and other
organizational resources.
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6. Introductory Concepts: What Are
Managerial Competencies?
Competency –a combination of knowledge, skills, behaviors,
and attitudes that contribute to personal Efficiency
ManagerialCompetencies–setsofknowledge,skill,behaviors,
andattitudesthatapersonneedstobeEfficientinawide
rangeofpositionsandvarioustypesoforganizations
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7. Efficiency and Effectiveness
•Efficient means using resources wisely and
without unnecessary waste.
•Effective means doing the right things
successfully.
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8. The Management Process
•Planning:Setting an organization’s goals and deciding how
best to achieve them.
•Decision Making: Selecting a course of action from a set of
alternatives.
•Organizing: Grouping activities and resources in a logical
fashion.
•Leading: The set of processes used to get people to work
together to advance the interests of the organization.
•Controlling: Monitoring the progress of the organization as it
works toward its goal to ensure that it is effectively and
efficiently achieving them.
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9. Managers
•People responsible for directing the
efforts aimed at helping
organizations achieve their goals.
•A person who plans, organizes,
directs and controls the allocation
of human, material, financial, and
information resources in pursuit of
the organization’s goals.
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10. Level of Management
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11. Kinds of Managers -Levels
•Top: CEO, VP, etc. –Set organizational goals, overall strategy
and operating policies.
•Middle: Plant Manager, Operations Manager, etc. –Put into
effect the strategies designed by top managers.
•First Line: Foreman, Supervisor, etc. –Supervise and
coordinate the activities of operating employees.
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12. Kinds of Managers –Areas (1)
•Marketing: Find ways to sell the organization’s products and
services.
•Financial: Deal with accounting, cash management, and
investment functions.
•Human Resource: Responsible for hiring and developing
employees.
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13. Kinds of Managers –Areas (2)
•Administrative: Generalists who have some basic familiarity with
all functional areas of management rather than specialized
training in any one area.
•Operations: Concerned with creating and managing the
systems that create an organization's products and services.
IE's are often in these positions. They achieve their goals
through production control, inventory control, quality control,
and plant site selection and layout.
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14. Managerial Skills
•Technical:Ability to understand and accomplish tasks.
•Interpersonal: Ability to communicate with, understand, and
motivate individuals and groups.
•Conceptual: Ability to think in abstract terms and understand
the "big picture" or the overall workings of the organization
and its environment.
•Diagnostic and Analytical: Ability to recognize the
symptoms of a problem and determine an action plan to fix it.
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Strategic Management
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16. 3 groups of managerial roles
1-Interpersonal Roles
Figurehead:
Perform ceremonial and symbolic duties.
Attending weddings & funerals, reassuring parents of female staffs.
Leader:
Guide and supervise subordinates.
Staffing & training , motivating staff.
Liaison:
Maintain information links in and beyond the organization.
Liaising with overseas business support manager.
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17. 3 groups of managerial roles
2-Informational Roles
Monitor:
Collect information from internal & external sources.
Daily stock count, control of cash & costs.
Disseminator:
Share information internally & externally.
Regular meetings for the exchange of information.
Spokesperson:
Convey information to stakeholders.
Accountable to GM.
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18. 3 groups of managerial roles
3-Decisional Roles
Entrepreneur:
Initiate ideas to bring in innovation &
improvement.
Upgrade service & review new
designs of restaurant.
Disturbance handler:
Take remedial actions.
Restaurants remained closed during
the riots for security measures.
Resource Allocator
Distribution of resources.
Budget. Rosters.
Negotiator
Take part in negotiation activities.
Handle customer complaints.
Dealing with suppliers for better prices.
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19. Management Concepts
Organization
Two or more people who work together in a structured way to achieve
a specific goal or set of goals.
Goals
Purpose that an organization strives to achieve; organizations often
have more than one goals, goals are fundamental elements of
organization.
The Role of Management
To guide the organizations towards goal accomplishment
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20. Definition of Organizations
An organization is a collection of people
working together in a coordinated and
structured fashion to achieve one or more
goals.
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21. Organization
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22. 22
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23. Organizational Culture &
Environment
Top
Management
•Agrees on
shared
assumptions of
humanbehavior
•Develops a
shared vision of
culturalvalues
Behaviors
•Employees
behave in
ways that
are consistent
with shared
values and
assumptions
Results
•Financial
performance
•Marketshare
•Employee
commitment
Culture
•Strongculture
emerges
•Traditionsare
maintained
•Socialization
practices for
new employees
2
3

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25. Recruitmentof
employeeswho
fittheculture
Organizational
Culture
Removal of
employeeswho
deviate from
theculture
Methods of Maintaining OrganizationalCulture
•What managers and teams pay attentionto
•Reactions to organizationalcrises
•Managerial rolemodeling
•Criteria forrewards
•Criteria for selection andpromotion
•Organizational rites, ceremonies,stories
Organizational Culture &
Environment
2
5

26. Organizational Culture &Environment
v

27. Organizational Culture& Environment
2
7

28. Task Environment Actors
•Competitors are other organizations that
compete for resources.
•Customers are whoever pays money to
acquire an organization's product or service.
•Suppliers are organizations that provide
resources for other organizations.
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29. Art & science offormulating,
implementing, andevaluating,cross-
functional decisions that enable an
organization to achieve its objectives
Strategic Management –Defined
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30. Strategic Management
In essence, the strategic planis a
company’s game plan
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31. 3 Stages of the Strategic Management Process
•Strategy formulation
•Strategy implementation
•Strategy evaluation
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32. Vision&Mission
Strategy Formulation
ExternalOpportunities&Threats
InternalStrengths&Weaknesses
Long-TermObjectives
AlternativeStrategies
StrategySelection
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33. Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
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34. Strategy Evaluation
Internal Review
External Review
Performance Measurement
Corrective Action
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35. Key Terms in Strategic Management
•Competitive advantage
•Strategists
•Vision and mission statements
•External opportunities and threats
•Internal strengths and weaknesses
•Long-term objectives
•Strategies
•Annual objectives
•Policies
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36. Anything that a firm does especially well
compared to rival firms
Strategic Management is Gaining and
Maintaining Competitive Advantage
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37. Vision Statement –
What do we want to become?
Mission Statement –
What is our business?
Vision and Mission Statements
Ch 1 -37
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Management

38. External Opportunities and Threats
Analysis of Trends
•Economic
•Social
•Cultural
•Demographic/Environmental
•Political, Legal, Governmental
•Technological
•Competitors
Ch 1 -38
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Management

39. Basic Tenet of Strategic Management
External Opportunities and Threats
Strategy
Formulation
Take advantage of
External Opportunities
Avoid/minimize impact of
External Threats
Ch 1 -39
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40. ❑Controllable activities performed
especially well or poorly
❑Determined relative to competitors
Internal Strengths and Weaknesses
Ch 1 -40
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41. •Typically located in functional areas of the firm
•Management
•Marketing
•Finance/Accounting
•Production/Operations
•Research & Development
•Management Information Systems
Internal Strengths and Weaknesses
Ch 1 -41
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Management

42. Assessing the Internal Environment
Internal Strengths and Weaknesses
Internal Factors
Performance Measures
Financial Ratios
Industry Averages
Survey Data
Ch 1 -42
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43. ❑Specific results that an organization seeks
to achieve in pursuing its basic mission
❑Long-term means more than one year
Long-Term Objectives
Ch 1 -43
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44. Long-Term Objectives
•Essential for ensuring the firm’s success
•Provide direction
•Aid in evaluation
•Create synergy
•Reveal priorities
•Focus coordination
•Provide basis for planning, organizing, motivating,
and controlling
Ch 1 -44
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Management

45. Means by which long-term
objectives are achieved………
Strategies
Ch 1 -45
Examples
•Geographic expansion
•Diversification
•Acquisition
•Product development
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Management
•Market penetration
•Retrenchment
•Divestiture
•Liquidation
•Joint venture

46. Short-term milestones that firms must
achieve to reach long-term objectives
Annual Objectives
Ch 1 -46
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47. Means by which annual objectives will be
achieved
Policies
Ch 1 -47
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Management

48. ❑Strategic Management Process
•Dynamic & continuous
•More formal in larger organizations
Strategic Management Model
Ch 1 -48
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49. Benefits of Strategic Management
Ch 1 -49
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50. Benefits of Strategic Management
•Nonfinancial Benefits
•Enhanced awareness of threats
•Improved understanding of competitors’ strategies
•Increased employee productivity
•Reduced resistance to change
•Clearer understanding of performance-reward
relationship
•Enhanced problem-prevention capabilities
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51. Why Some Firms Do NoStrategic Planning(1)
•Lack of knowledge of strategic planning
•Poor reward structures
•Fire fighting
•Waste of time
•Too expensive
•Laziness
•Content with success
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52. Why Some Firms Do NoStrategic Planning (2)
•Fear of failure
•Overconfidence
•Prior bad experience
•Self-interest
•Fear of the unknown
•Honest difference of opinion
•Suspicion
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What is Decision-making?
•What is Decision-making?
•Formal Definition
•“The process of identifying problems and opportunities for the
Organization”
•Requires 1), design a choice, 2), form expectations, 3), evaluate the
consequences
•Informal Definition of a Decision
•Deliberate, Conscious (e.g., material choice)
•Automated, Saccadic (e.g., eye movement)
•Short sequences (e.g., driving a car)
•Long sequences (e.g., life-time investment)
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Management Decision-making
•Which side is (i.e., questions managers mustask)…
•More Systematicor More Intuitive?
•Does the problem require a Rational/AnalyticalApproachor does it require a
Flexible/SpontaneousApproach?
•More Structuredor More Unstructured?
•Is the information required familiar/straight-forward/clearor
new/unusual/ambiguous/deficient?
•More Operationally-orientedor More Crisis-oriented?
•Is the problem ongoing/long-term/managed/expectedor one-time/short-
term/extraordinary/unique?
•More ClassicalModel or More BehavioralModel?
•Can we act rationally(optimize within constraints) or do we act with cognitive
limitations(satisficing—choose the first good solution).
•More Analysisneeded or more Creativityneeded?
•Will the existing paradigm work (broader and deeper analysis) or will we need a
new paradigm (think completely differently)?
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Information Dynamics
•Wisdom
•Extraordinary Insight (Explanation) for Foresight (Prediction)
•Restaurant: How should our menu change in the future to best optimize
nightly sales?
•Knowledge
•Combination of Explicit Information and Tacit Information
•Restaurant: What action led to the change in last night’s sales?
•Information
•Meaningful Data
•Restaurant: How does last night’s sales compare to that night the previous
year? How does last night’s sales compare to our goals?
•Data
•Raw, atomic, basic
•Restaurant: What were the total sales for last night?
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Analytics for Management Decision-making
•PrescriptiveAnalytics
•What should we do?
•HR Department: What should we (the HR Department) do to meet
or exceed the organization’s hiring and retention goals for next
year? What data/information/knowledge/wisdom should we
provide to our hiring and technical managers to help? What are
we missing?
•PredictiveAnalytics
•What is likely to happen?
•HR Department: How many new employees will our organization
need next year? How will the mix change? What is our
competition likely to do?
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57. Analytics for Management Decision-making
•DiagnosticAnalytics
•Why did it happen?
•HR Department: Did our emphasis on recruiting from campus A
(over campus B, etc.) matter? What do the managers of these
entry-level employees think?
•DescriptiveAnalytics
•What happened?
•HR Department: How many entry-level professionals did we hire
last year? How many of them are still with us now?
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How do mostmanagers make most
decisions mostof the time?
•(adapted from Joseph Badaracco, HBR, 2016)
1.What are the net consequences of all my options?
2.What are my core obligations?
3.What will work in the world as it is?
4.Who are we?
5.What can I live with?
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Strategic Management