LP-1-StM-Mba-6A B-6Feb13.ppt

7/29/2019 LP-1-StM-Mba-6A B-6Feb13.ppt

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The illiterate of the 21st century will not be those

who cannot read and write, but those who cannot

learn, unlearn, and relearn. Alvin Toffler,daily Dawn 3 Feb 12

Welcome and introduction to

Strategic Management

(StM)

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COURSE PROFILE

SEMESTER SPRING -2013

MBA-

STRATEGIC MANAGEMENT

MGT - 625

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COURSE DESCRIPTION

Todays Business World is extremely competitive. Itrelies heavily on the decisions made by its (Strategic)Managers / Strategic Management. The strategicmanagers must develop panoramic view of businessenvironment, i.e., both internal and external. The

managers of modern businesses should be adequatelyskilled to pre-empt the situation rather than resorting toreactive mode. Recent economic slowdown andcurrency war raging between the USA, Europe (Euro

Zone) and China are cases in example. Therefore, thestrategic management course has been designed toenable you to learn not only the fundamentals, but alsothe intricacies of higher levels of management. A carefullook at the schedule would let you know the progression

of the course. 3


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COURSE OBJECTIVES

Develop an understanding of Strategy and Strategic

Management and its application to complexrelationships that exist in todays environment.

Develop an awareness of the various environmentalcontexts under which strategic formulation and

implementation occur. Develop an ability to thoroughly analyze business

problems.

Develop an ability to function effectively as a member or

a chairperson of a strategic team and, Develop an ability to effectively communicate strategic

thinking, both orally and in writing.

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Recommended Books

Dess, Gregory G; Lumpkin, G.T.;Eisner, Alan B. Strategic

Management Text and Cases.2006. The McGraw-Hill Companies,Inc., NewYork.

Strategic Management: Conceptsand Cases By Fred R. David5


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RECOMMENDED BOOKS

The McGraw-Hill Companies, Inc., New York.

Strategic Management: Concepts and Cases ByFred R. David

Rao, VSP; Strategic Management

Strategic Management, by Miller & Dess,McGraw Hill - International Edition, 1996.

Business Policy and Strategy - Concepts andReadings, by McCarthy, Minichiello & Curran,

Irwin, 1996.

Strategic Management by J A Pearce 11 andRobinson, Jr., All India Traveler Book Seller.

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Wk General Contents Class Activities Quizzes /Assignment

sPart - 1 --- Strategic Analysis

1 Ch-1 Introduction to STM2 Ch-2 Analyzing External Environment A-13 Ch-3 Analyzing Internal Environment Q -1

4 Ch-4 Assessing Intellectual CapitalPart - 2 --- Strategic Formulation

5 Ch-5 Formulating Business Level

Strategies6 Ch-6 Formulating Corporate Level

StrategiesA-2

7 Ch-7 Formulating International

StrategiesQ-2

8 Ch-8 Digital Business StrategiesMid Term Exam

Part3 --- Strategic Implementation

10 Ch-9 Strategic Control and Corporate

Governance

Nominations for

Group Presentations

11 Ch-10 Creating Effective Organizational

Designs

A-3

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Ch-11 Strategic Leadership, Excellence,Ethics, and Change

Q-3

13 Ch-12 Fostering Corporate Entrepreneurship14 Ch-13 Strategic Leadership: Creating new

Ventures

A-4

Part4 Miscellaneous15 Comprehensive Case Analysis Q-416 PresentationsFinal Course / Group17

Revision18 Final Exam

Lectur

eDeliveryP

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Shahid NawazAssist. Professor

0345-5139748

Email: [email protected]

[email protected]

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mailto:[email protected]:[email protected]


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Bring a change in your attitude

and make it a habit to visitlibrary at least once a week.

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LP-1 dt 6 Feb 13

Ch-1 Strat. Mgmt CreatingCompetitive Advantages

Learning Objectives

Definition and 4 key attributes of Strat. Mgmt The Strat. Mgmt Process and its 3 related

principal activities

Corporate Governance

Environmental Forces

Vision, Mission and Objectives Awarenessof


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STRATEGIC MANAGEMENT MODEL

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1.Establish vision,Purpose, values, and

3-5 yrs scorecard

2. determineannual

Obj & Goals

3. Addressimplementation

Barriers

7. Identify drivers withTargets for annual

Objectives6. Develop project action plans

For drivers

5. Charter improvementteamsAnd

Create infrastructure

4. Design and executecommunication

plan

8. Execute ProjectActionPlans

9. Review Project planIn a database

And systematicprocess

10. Sustain theImprovements

(Trg & Doc)Improves

trategicmanagem

entprocess

Planning DevelopmentImplementation

Do

Proj

Mgmt

Study

Perfor

mance

Evaluat

ion

Act

Instituti

onalize

Annual strategic planning


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STRAT MGMT & CEO

All Org are run by the CEOs

Explain role of CEO vis-vis Strat Mgmt and challenges they face

CEOs are synonymous with the success and failure of the org

Strat Mgmt is based on participatory decision making techniqueswith the CEO taking full responsibility for the outcome

Leadership roles: Romantic ---- Leader is the key to success or failure

External Factor ---- Focus is on the external factors for successor failure of the Org

Explain recent examples:

BP Oil Rig disaster and its fallout

OGDC

Downfall of BCCI

Recent economic downturn in USA / Euro Zone / DPW etc


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STRAT MGMT

The Essence ofSTRAT MGMT is to focus on 2 fundamental

questions: How should we compete in order to create competitive

advantages (CA) in the market place

How can we create competitive advantage in the market place

that are not only unique, sustainable and valuable but alsodifficult for competitors to copy or substitute.

Important to note is:

Sustainable CA cannot be achieved without operational

effectiveness which means performing similar activities better

than rivals.

Operational Effectiveness includes concepts of TQM, just-in-time,

benchmarking, business process reengineering, and outsourcing etc

Strategy is all about being different from everyone else.


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SUCCESSFUL STRAT MGMT

An industry is composed of a set of firms

that produce similar products or services,sell to similar customers, and use thesimilar methods of production.

Gathering industry information andunderstanding competitive dynamicsamong the different companies in an

industry is key to successful strategicmanagement.


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STRAT MGMT DEFINITION

What is Strat Mgmt?

Step further than incremental management Takingminor decisions in a stable, simple and unchangingindustry.

Does it happen always? No, therefore, need for Strat

Mgmt which is defined as: Analyzing, taking decisions, and initiating actions in

order to create and sustain competitive advantage.

Biggest Question

How (and when) and why do some firms outperformothers?

Critical Answer The challenge to managers is to decide on strategies that

provide advantages that can be sustained over time


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STRAT MGMT AND 4 KEY ATTRIBUTES

Directed at overall organizational goals Looking at the strategic issues rather than functional

areas What to produce and at what cost

Involving multiple stakeholders Involve owners, employees, customers, suppliers,

and the community at large Incorporating short term and long termperspectives Keep an eye on the current production needs as well

as vision for the future ---- Creative Tension

Recognizing need for trade-offs betweenefficiency and effectiveness Using organizational resources wisely and optimally


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THE STRAT. MGMT PROCESS

It involves 3 related principal activities:

Analysis Of strategic goals (V + M + Strat Obj)

Internal and External Environment of the Org

Decisions (Strategic)

Based on Orgs domestic and international operations, the Org

should address 2 basic questions, i.e.,1. What industries should we compete in?

2. How should we compete in those industries?

Actions

In order to achieve success as a result of decisions, the

necessary resources must be made available for a desirableoutcome.

It is a continuing process and seeks intimate involvement of CEO

Be able to differentiate between Intended Strategy andRealized Strategy


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Environmental Forces


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CORPORATE GOVERNANCE AND STAKEHOLDERS

MANAGEMENT

Management (CEO) To run the Org to satisfy the interests andneeds of the shareholders under theguidelines prepared by BOD

Shareholders (Owners)

BOD (Elected by the shareholders torepresent their interests)

To align the interests and motives of themanagement with those of the owners


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ROLE OF CEO--- Electronic Data System since 1962

In 1998 --- EDS earned $22Bn (Total market $140Bn) as

Revenue with shares trading at $35. In March 2003 --- Shares shrunk to $16. Additionally,

EDSs reputation was tarnished due investigations byS&EC resulting in loss of competitive position.

EDS CA -- technical competence, steady growth, oldCEOs conservative culture --- crisp white shirt andmilitary cut hair style v/s new CEOs culture --- gung-hostyle to get rid of bureaucratic life style

To spur growth the new CEO pushed for megadealsrequiring outsourcing companies to make largeinvestments. Resultantly, stocks were pushed up to $77.By 2001, CEO (Mr. Brown) received $52M incompensation.

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EDS- WHAT WENT WRONG

CEOs Attitude --- Over ruling the managers

By 2002, Navy contract suffered loss of $1.9Bn due poorcalculation of margins Megadeals / megarisks

In the same time frame, a contract with Worldcom signedin 1998 incurred a loss of $118M due bankruptcy of

Worldcom as a result of Internet Bubble Burst 2002 estimates were fudged and investors were assured

of 13-14% growth despite recession

Stocks plunged to $11.68

By 2003, EDS BOD lost patience and replaced CEO Closing statement: Pay for performance, differentiate

performance- not organizational level.make difficultchoices. Do as I say, not as I do.

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Creating Symbiosis or Zero Sum Two views

1. Zero Sum --- All the stakeholders are to be satisfied: Employees want higher wages

Shareholders want higher profits

Zero sum concept gives rise to Unionism

2. Stakeholder symbiosis ---- Managers acknowledge

interdependence between employees, suppliers,

customers, shareholders and the community at

large

CORPORATE GOVERNANCE AND STAKEHOLDERS

MANAGEMENT --CONTD


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Corporate Governance and Social Responsibility

Social Responsibility is the expectation that businesses or

individuals will strive to improve the overal welfare of the society. Companies have determined Triple Bottom Line which is:

Financial Measures / Capital

Ecological and material capital

Renewable resources generated by living systems, such aswood or animal by-products

Human and Social capital

Human deals with peoples knowledge, skills, health,

nutrition, safety, security, and fossil fuels Social includes assets of civil society, social cohesion, trust,

reciprocity, equity and other values that provide mutual

benefits


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THE STRAT. MGMT Perspective --- An imperative

It requires managers to take an integrative view of the

Org and assess how all of the functions and activitiesfit together to help an Org achieve its goals andobjectives.

Some Key Driving Forces are:

1. Globalization Global economy is NOT the flow of goods only but it is flow

of capital, people, and information worldwide.

2. Technology Innovative technology is having impact on our lives, trade,

services and products

3. Intellectual Capital Creating and applying knowledge to deliver differentiated

products and services of superior value for customersrequire the acquisition of superior talent, as well as abilityto develop and retain that talent


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Role of Leaders Thinking and Working groups can not be

different and separated

Ideas must be encouraged, analyzed andimplemented

Trg and Dev must move hand in glove

EMPLOYEES AND STRAT MGMT


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VISION, MISSION AND OBJECTIVES

Vision tend to be quite broad, and can be inspiring,

overarching and emotionally driven Org express priorities best through stated goals and

objectives that form a hierarchy of goals

Hierarchy of goals is the Companys Vision

A vision may or may not succeed Give examples of vision:

GOP

BU

ICI AkzoNobel

Unilever

Telenor

PTCL


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MISSION

It encompasses both the purpose of the company as well as the

basis of competition and competitive advantage

More specific and depict rationale for existence of org

Effective mission statements incorporates the concept of

stakeholder management, suggesting that org must respond to

multiple constituencies if they are to survive and prosper.

They also have the greatest impact when they reflect an orgs

enduring, overarching strategic priorities and competitivepositioning.


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STRATEGIC OBJECTIVES

Operationalization of Mission statement

Outlining Strategy how to achieve higher goals

Cover well defined time frame

Resources are identified and allocated

To be meaningful, Objectives must be:

Measurable

Specific - clear and concise

Appropriate - Consistent with vision and mission

Timely Have a time frame


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Thank you

LP-1-StM-Mba-6A B-6Feb13.ppt

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