reality of dynamism essay

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Strategic Management

Accountancy (03), manuel s. enverga university foundation.

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Strategic management – chapter 1.

The reality of Dynamism The 21st century epitomizes the reality of dynamism. - Dynamism - the quality of being characterized by vigorous activity and progress Hypercompetition Hypercompetition is a fundamental feature of the new economy. As the word implies, it carries a note of overexcitement and agitation. Hypercompetition occurs when product/service offerings and technologies are so new that standards become unstable and competitive advantage is not sustainable. Strategic Management Defined Strategic management is a continuous process of strategy creation. It involves strategic processes like strategic analysis and decision-making, strategy formulation and implementation, and strategy control with the primary objectives of achieving and maintaining better alignment of corporate policies, priorities, and success. Strategic analysis consists of a systematic evaluation of variables currently existing in the external and internal environments Strategic decision-making is deliberately bringing together the right resources for the right markets at the right time. Strategy formulation is designing strategies on the business and corporate levels. Strategy implementation is employing these crafted strategies to achieve organizational set goals and objectives Strategic control is the application of an appropriate monitoring and feedback system. Figure 1 The strategic management process

If strategic analysis is accurately conducted, organizations can develop strategic intelligence. Strategic intelligence is the capability of an organization to possess relevant and related knowledge, abilities, foresight, and systems that it is able to assess its own strengths and vulnerabilities, the pressing challenges confronting the organization, as well as the trends and opportunities existing in the environment.

If strategic decision-making is correctly effected, organizations can acquire the capability of thinking strategically. Strategic thinking is the cognitive process of completely and analytically weighing factors and arriving at critical decisions in the context of the current milieu of which an organization is part.

If strategy formulation is uniquely designed and effectively communicated, organizations have greater possibilities of attaining organizational competitiveness. Organizational competitiveness pertains to the ability of any business/company to utilize its resources optimally and sustainably for maximum performance and productivity.

If strategy implementation is efficiently employed, organizations can achieve comparative advantage. Comparative advantage refers to the ability of an organization to produce a particular good or service at lower marginal and opportunity costs than its competitors.

If strategic control is productively monitored, organizations can realize strategic performance. Strategic performanc e is the accomplishment of a high level of productivity that is characterized by efficiency in the context of lean and quantifiable management. Figure 1 A Strategic Management Model

Strategic Planning = Strategic Management Goals and Objectives: to devise a strategic mode of preparing, addressing and steering organizations to where they want to go particularly, both undertakings endeavor to understand the strategic position of organizations their set goals, preferred choices, and deliberate and calculated strategies

Organizational Input

• Management/Employees
• Financial Resources
• Facilities/Equipment
• Infrastructures

Strategic Management Process

• Strategic Analysis
• Strategic Decision- making
• Strategy Formulation
• Strategy Implementation
• Strategic Control

Organizational Success - Strategic Intelligence - Strategic Thinking - Organizational Competitiveness

• Comparative Advantage
• Strategic Performance

responsibilities of a manager. In other words, no manager can fully accomplish his/her responsibilities effectively if strategic planning is disregarded or overlooked.

• It necessitates the leadership and support of top management and, at the same time, employee participation and commitment. Successful implementation of strategic planning is largely dependent on responsibility, support, and sustained leadership coupled with acceptance and involvement of employees. There should be synergistic interrelationships between departments and intra-relationships within departments. Types of Strategic Plans
• Medium/long-range plan - prepared in the context of the coming three to five, ten or more years.
• Annual/yearly plan - short-term The steps involved in strategic planning are iterative, cyclic, and integrative. They include:
• making a situation audit to ascertain where the organization is today;
• stating the respective goals and objectives of the organization, the values and value systems it espouses, its business definition, and its corresponding strategy statements to determine where it wants to go;
• delineating appropriate strategies to be carried out in order to help direct the organization to where it wants to be;
• identifying and then choosing the soundest strategy to determine the best way for the organization to be where it wants to be and to achieve its goals;
• monitoring the implementation of strategies to measure performances; and
• conducting periodic and continuous reassessments in order to implement improvements and suggested changes. Strengths of Strategic Planning
• defines an organization‘s vision, mission, and set objective
• provides organization the opportunity to assets the milieu and specify strategies to achieve their goals
• helps organizations to stay focused
• makes things happen
• helps reduce the chances of committing mistakes, thus, increasing the organization’s efficiency
• helps in the more efficient allocation of organizational resources, better collaboration among cross-departmental employees and functional units, and commutation between managers/supervisors of all levels
• when cautiously, clearly, and proactively undertaken, strategic planning provides leverage and competitive advantage to the organization.

Limitations of Strategic Planning

• Although conducted yearly or even more often, the strategic plans prepared in some instances are good only “in paper.”
• Some organizations fail to follow faithfully their prepared strategic plans.
• If in cases these strategic plans are followed religiously, some organizations may not be flexible enough to make the needed adjustments and realignments due to inevitable or forthcoming external or internal challenges.
• Conducting strategic planning sessions may entail costs that can be expensive to organizations. Figure 1 Relationship of the Vision-Mission-Goals of an Organization

Organizational Vision The organizational vision is an inspirational statement of what the organization hopes to achieve at some point in the future. It is the image of what an organization desires to achieve. Mission Statement The mission statement defines the current purpose of an organization; it answers what the organization does, for whom it is done, and how it does what it does. Organizational Goals and Objectives Organizational goals are pursued to make the specified strategies succeed. They vary and are essentially dependent on their respective purpose and direction. Goals have the following properties:

• Goals provide organizations focus and direction.
• Goals move organizations to action.
• Goals develop in organizations the trait of persistence. Objectives Objectives are different from goals, in that they are micro and specific in perspective.

Goals Mission

Values and Value System Values are inherent roots of motivation within an individual, an organization, a community, or a nation. They are by nature, ingrained and thus, are more stable and enduring. They are both intellectual and behavioral, serving as bases for the organization's actions and way of thinking. Beliefs are cognitive manifestations while attitudes are characteristically behavioral. They are fundamental and intricately integrated in the particular organization’s value system. Take note that the values projected by organizations are largely dependent on any or all of the following: the stockholders, the Board of Directors, and the top management. Figure 1 Value System of an Organization

The value system is characteristically broader in scope; aside from values, it includes other variables such as the organization’s dreams, aspirations, interests, expectations, philosophies, as well as leadership and management styles and ethical practices. Organizational Climate and Culture Organizational climate is often defined as the regular and repetitive patterns of attitudes and behavior exhibited by employees of an organization. Organizational climate is easier to assess and change. It lends to flexibility. It precedes and somehow contributes to the solidification of the culture of an organization. Organizational culture denotes a wide range of social phenomena. Culture, in the sense that it is used hue. can be understood as an idealized system because a system focuses on types of meaning; represented by values, formal rules, knowledge, beliefs, and expressive forms.

• Multiple Choice

Course : Accountancy (03)

University : manuel s. enverga university foundation.

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