Strategic Management ( 6 questions)
odehe
strategic_management_3.pptStrategic Management #3
The Internal Assessment
- The Nature of an Internal Audit
- Integrating Strategy & Culture
- Management
- Marketing
- Opportunity Analysis
- Finance/Accounting
- Production/Operations
- Research & Development
- Management Information Systems
Critical Organization Factors
The Internal Environment
- Management Leadership Styles
- Management Philosophies – Vision and Mission
- Organization Structure and Climate
- Organization Culture – Values, Social Network
- Company Policies
- Resources
Nature of an Internal Audit
STRENGTHS & WEAKNESSES
Functional Areas of Business
- Vary by organization
- Divisions have differing strengths & weaknesses
- Physical resources
- Human resources
- Organizational resources
Key Internal Forces
Distinctive Competencies:
Firm’s strengths that cannot be easily
matched or imitated by competitors
Internal Audit
Coordination & understanding among managers from all functional areas
Key to Organizational Success
http://www.ted.com/talks/clay_shirky_on_institutions_versus_collaboration.html
Clay Sharky Collabaration
Resource Based View (RBV)
Approach to Competitive Advantage
Internal resources are
more important than
external factors
http://pro.readitfor.me/?aID=read&step=1&ID=14
Good to Great - Collins
Resource Based View (RBV)
Empirical Indicators
- Rare
- Hard to imitate
- Not easily substitutable
Integrating Strategy & Culture
Organizational Culture
- Often Resistant to change
- May represent:
Strength
Weakness
Integrating Strategy& Culture
Organizational Culture Can Inhibit Strategic Management
- May miss external changes due to strongly held beliefs
- Have a natural tendency to “hold the course” even during times of strategic change
http://www.ted.com/talks/jason_fried_why_work_doesn_t_happen_at_work.html
U.S. Versus Foreign Cultures
To successfully compete in world markets, U.S. managers must obtain a better knowledge of historical, cultural, and religious forces that motivate and drive people in other countries.
Diversity within an organization is very important
Management
Functions of Management
Planning
Organizing
Motivating
Communicating
Coordinating
Staffing
Controlling
Management
Stage When Most Important
Function
Planning
Strategy Formulation
Organizing
Strategy Implementation
Motivating
Strategy Implementation
Staffing
Controlling
Strategy Implementation
Strategy Evaluation
Management
Planning
- Beginning of management process
- Bridge between present & future
- Improves likelihood of
attaining desired results
Planning
Synergy
Can develop through planning
Exists when everyone pulls together as a team that knows what it wants to achieve
Management
Organizing
- Achieves coordinated effort
- Defines task & authority relationships
- Determines who does what
- Determines who reports to whom
Management
Controlling
- Establish performance standards
- Measure individual and
organizational performance - Compare actual performance to
planned performance standards - Take corrective action
Management Audit Checklist
- Does the firm use strategic management concepts?
- Are objectives / goals measurable?
Well communicated? - Do managers at all levels plan effectively?
Management Audit Checklist
- Do managers delegate well?
- Is the organization’s structure appropriate?
- Are job descriptions clear?
- Are job specifications clear?
- Is employee morale high?
Management Audit Checklist
- Is employee absenteeism low?
- Is employee turnover low?
- Are the reward mechanisms effective?
- Are the organization’s control
mechanisms effective?
Marketing
Marketing Functions
Marketing research
Opportunity analysis
Target market segmentation
Customer analysis
Promotion & Selling products /services
Product & service planning & development
Pricing
Distribution
Marketing
Customer Needs or Wants for Products and Services
- Defining
- Anticipating
- Creating
- Fulfilling
Marketing
Opportunity Analysis
Are markets segmented effectively?
Is the organization positioned well among competitors?
Has the firm’s market share been increasing?
Are the distribution channels reliable & cost effective?
Is the sales force effective?
Marketing
Opportunity Analysis
Does the firm conduct market research?
Are product quality & customer service good?
Are the firm’s products/services priced appropriately?
Does the firm have effective promotion, advertising, & publicity strategies?
Marketing
Opportunity Analysis
Are the marketing planning & budgeting effective?
Do the firm’s marketing managers have adequate experience and training?
Finance/Accounting
Finance/Accounting Functions
Investment decision (Capital budgeting)
Financing decision
Accurate Record Keeping
Basic Financial Ratios
Liquidity Ratios - Firm’s ability to meet its short-term obligations
Leverage Ratios - Extent of debt financing
Activity Ratios - Effective use of firm’s resources
Profitability Ratios - Effectiveness shown by returns
on sales& investment
Growth Ratios - Firm’s ability to maintain economic position
Finance/Accounting Audit
- Where is the firm strong / weak as
indicated by financial ratio analysis? - Can the firm raise short-term capital as needed?
- Can the firm raise long-term capital as needed
through debt and/or equity?
Finance/Accounting Audit
- Does the firm have sufficient working capital?
- Are capital budgeting procedures effective?
- Are dividend payout policies reasonable?
- Are the firm’s financial managers experienced & well trained?
Finance/Accounting Audit
Effective Financial Analysis Requires:
- Analysis of how the ratios have changed over time
- How the ratios compare to industry norms
(RMA) Robert Morris Associates - How the ratios compare with key competitors
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 4 -63
Production / Operations
Production/Operations Functions
- Process
- Capacity
- Inventory
- Workforce
- Quality
Production / Operations Audit
- Are suppliers of materials, parts, etc. reliable and reasonable?
- Are facilities, equipment & machinery in good condition?
- Are inventory-control policies and procedures effective?
Production/Operations Audit
Research & Development
Research & Development Functions
- Development of new products
before competitors - Improving product quality
- Improving manufacturing
processes to reduce costs
Research & Development Audit
- Are the R&D facilities adequate?
- If R&D is outsourced, is it cost effective?
- Are the R&D personnel well qualified?
- Are R&D resources allocated effectively?
Research & Development Audit
- Are MIS and computer systems adequate?
- Is communication between R&D & other organizational units effective?
- Are present products technologically competitive?
Management Information Systems Audit
- Do managers use the information system
to make decisions? - Is there a CIO or Director of Information
Systems position in the firm? - Is data updated regularly?
Management Information Systems Audit
- Do managers from all functional areas contribute input to the information system?
- Are there effective passwords for entry into the firm’s information system?
- Are strategists of the firm familiar with the information systems of rival firms?
Management Information Systems Audit
- Is the information system user-friendly?
- Do all users understand the competitive advantages that information can provide?
- Are computer training workshops provided for users?
- Is the firm’s system being improved?
Value Chain Analysis
Core competencies
Distinctive competencies
Benchmarking
Internal Success Factors
To achieve a competitive advantage, a company needs to have a strategy that establishes a significant and sustainable point of differentiation.
What internal factors are most responsible for a company excelling in their industry ?
