Aim
Executive Diploma in
Management
Strategic Management
Objectives
Open Systems Perspective
By the end of the workshop the delegates will be
able to:
Define strategy and explain its relevance to an
effective management process
State the characteristics of strategic thinking and
its application
Describe the elements of the strategic planning
process.
Carry out an environmental analysis using the
SPELT model.
Describe 3 generic options for strategic choice.
choice
Open Systems
Competitors
Resources
Contractors
Information
People
Machinery
IT
INPUTS
Planning
Transformation
Process
FEEDBACK
A system is in a dynamic
relationship with its
environment where it
receives various inputs, it
then transforms those inputs
in some way and exports
outputs back into the
environment
An Integrated Planning Process
S.P.E.L.T.
Strategy
Vision
Purpose
To help delegates explore the
concept of strategy and to
practice using key tools and
techniques used in the formulation
of strategic plans.
Customers
Consumers
Shareholders
Stakeholders
OUTPUTS
INTEGRATED
No part of the overall planning process is carried
out in isolation
PLANNING
The onon-going efforts that helps an organisation
confirm: where it wants to be, where it is
going, and how it will get there
PROCESS
A flexible sequence of events relying on specific
skills and knowledge underpinned with active
communication, involvement and ownership
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Integrated Approach
Strategic
Plan
Operational
Plan
Performance
Review
Operations
What is a Strategic
Plan?
Strategic
Planning
Purpose/Vision
Analysis
Strategic Areas
Long Term
Objectives
Integrated Process
Financial
Projections
What Is Performance
Review?
Performance
Review
Control Mechanisms
Management Information
Departmental Results
Team Results
Individual Reviews
Improvement/Corrective
Actions
Reward Mechanisms
Elements Of The
Integrated Approach
STRATEGIC PLANNING
Focuses on the purpose and direction of
the organisation in related to critical
issues in the environment
OPERATIONAL PLANNING
Focuses on the translation of long term
objectives into specific plans and short
term results
PERFORMANCE MANAGEMENT
Focuses on the mechanism for monitoring
the implementation and results of both
the strategic and operational plans
What is an Operational
Plan?
Operational
Planning
Operational Analysis
Key Result Areas
Performance
Indicators
Objectives
Action Plans
Budgets
Strategic Thinking
Strategic
Analysis
Strategic
Choice
Strategic
Implementation
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Why Strategy?
a basis for coordinating effort
a focus for decision making
Forces close examination of choices or
options
Prepares the organisation for change
Encourages development and progress
Gives a feeling of continuity
Provides a source of motivation through
purposeful activity
Enables the organisation to establish ‘best
fit’
A Definition of Strategy
Forms
Provides
Characteristics of Strategy
The
ability to sustain the organisation’s
ambitions
The direction the organisation will move
The scope of an organisations activities
Matching activities to the organisation’s
environment
Matching activities to the organisation’s
resource capability
The allocation or rere-allocation of resources
The implications of change
Components of Strategic
Planning
VISION/PURPOSE
STRATEGIC ANALYSIS
STRATEGIC CHOICE
LONG
LONG-TERM OBJECTIVES
INTEGRATED ACTION
PLANNING
FINANCIAL PROJECTIONS
Strategy is that set of
managerial decisions and
actions that determines the
long term performance of an
organisation
Criteria of Strategy
Consistency
Must not present mutually inconsistent goals,
policies and objectives
Consonance
Must represent an adaptive response to the
external environment and the critical changes
within it
Advantage
Must provide for and/or maintain a competitive
advantage
Feasibility
Must neither over burden available resources
nor create unsolvable problems within the
organisation
Purpose of Each Component
PURPOSE AND VISION
Forms the foundation of the entire planning process, as
all other activities must support the purpose
STRATEGIC ANALYSIS
Provides the data that legitimises plan
STRATEGIC CHOICES
Specifies direction organisation must move
LONG TERM OBJECTIVES
Identifies results that indicate progression
INTEGRATED ACTIONS
Identifies crosscross-functional actions required
FINANCIAL PROJECTIONS
Identifies financial implications
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Some Definitions to Consider
Vision:
An image of our desired future
Values
How we expect to travel to where
we want to go
Purpose or Mission
What the organisation is here to do
Goals
Milestones we expect to reach
before too long
AN EFFECTIVE VISION:
Is appropriate to the organisation
Bridges present and future
Attracts commitment and energises people
Clarifies purpose and direction
Creates meaning for everyone’s role
Establishes a standard of excellence
Reflects the uniqueness of the organisation
Is ambitious
WE NEED A VISION WHEN:
We are confused about the overall purpose
We are pessimistic about the future and
cynical of the present
We have a hyperactive rumour mill
We have an absence of a shared sense of
progress
We have excessive risk avoidance
We seem outout-ofof-tune with trends in the
environment
We lack pride
Criteria For Effective
Vision/Purpose Statements
Clear,
understandable, and pertinent
to all employees
Brief enough to keep in mind
Clearly specifies what the organisation
is all about
Should reflect the distinct
competencies of the organisation
…continued
An Example – Vision
Broad enough to allow flexibility but
not a lack of focus
Should serve as the template for all
decisions
Must reflect values, beliefs and the
philosophy of operations
Must be achievable
“Our vision is to achieve the
highest standards of service and
efficiency, and to operate our
business in an enterprising and
innovative manner so as to create
value for our customers and a
supportive climate for our
employees”.
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An Example – Mission/Purpose
Feel the Difference?
Company
We will achieve our vision by seeking to
establish and understand our
customer’s needs, focus our business
on meeting those needs and ensure
our employees are developed and
empowered to deliver our service.
We intend to move from a service offered to a
customercustomer
-needs strategy. The primary
reasons
are to offset the impact of new
competition brought
about by privatisation. For this to
happen successfully
the following must take place:
Strategic Analysis
Environmental Monitoring
SPELT
Industry
Competitors
Customer/consumer
Key Stakeholders
Supplier base
Application considerations
SWOT
Seven Part Model
Sub Systems
Customer Related
Revlon
We make cosmetics
We sell hope
Xerox
We make copiers
We improve efficiency
We sell petrol
We supply energy
Standard Oil
Columbia Pictures We make movies
IMAC
Encyclopaedia
Britannia
Carrier
Strategy Statement
Product Related
We market
entertainment
We sell fertiliser
We improve agricultural
efficiency
We sell
encyclopaedias
We produce and
distribute information
We make air
conditioners
We provide
comfortable climates
Increased product diversification related to
customer need
Accurate analysis of profitability by customer
grouping
Enhance company image as a customercustomer-needs
driven organisation
Improved definition of customer service
requirements
Internal focus to broaden the capabilities of
all employees to meet the customer needs
posture
Culture shift to reflect customercustomer-needs
posture
Strategic Analysis continued
Is the analysis bringing to the surface
critical issues?
Is sufficient information and
judgement being used to support
selection of issues?
Are the issues being thoroughly
analysed?
Is the analysis producing conclusions
about the causes?
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SPELT Analysis – External
SOCIAL
POLITICAL
ECONOMIC
LEGAL
Stakeholders
Stakeholders “are those individuals
or groups who depend on the
organisation to fulfil their own goals
and on whom, in turn, the
organisation depends”
Johnson and Scholes
TECHNOLOGICAL
Stakeholders in the Business
Owners
Shareholders
Loan Financiers
Creditors / debtors
Suppliers
Customers
Managers
Other Employees
Consumers and Society
Stakeholder Mapping/Analysis
Identifies stakeholders, their
expectations and power and helps in
establishing political priorities. It
consists of making judgements on two
issues :
How interested each stakeholder
group is to impress its expectations on
the organisation’s choice of strategies
Whether they have the means to do
so - the power of stakeholder groups
SWOT ANALYSIS
Stakeholder Analysis
Strengths
Your
organisation
Effective
Internal
processes
Opportunities
Threats
External events that could
be advantageous
External events that
could be problematic
Strategies to utilise
strengths in order to
take advantage of
opportunities
Strategies to utilise
strengths in order
to minimise impact
of any threats
Weaknesses Strategies to improve Strategies to
Ineffective
Internal
Processes
or eliminate
weaknesses in order
to take advantage of
opportunities
improve or eliminate
weaknesses in order
to minimise impact
of any threats
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An Organisation Development Model
Five SubSub-Systems
THE SEVEN PART MODEL
WHAT
BUSINESS?
TASK/
TECHNOLOGICAL
EXTERNAL ENVIRONMENT
ABILITY TO ADAPT/ COPE
RESOURCE & FINANCIAL
MANAGEMENT
MISSION/ VISION
AIMS/GOALS
MANAGEMENT
ORGANISATION
ROLES OF DIRECTORS
OR LEADERS
STYLE -MANAGEMENT
INDIVIDUALS/TEAMS
STRUCTURES
CULTURES
TYPE/STAGE
AGE
GROWTH
Macro level - broad ethical stance
about the role of business in the
national and international organisation of
society
Within the macro framework, corporate
social responsibility beyond minimum
obligations of corporate governance
Individual level - behaviour and actions
of individuals within organisations
Strategic Choices
CONTROL
POLITICAL
EVOLUTION
Three Levels of Business
Ethics
HUMAN/
SOCIAL
Products Offered
Services Offered
Market Needs
Customer Needs
Technology
Innovation
Production Capability
Size/Growth
Return/Profit
Image
Human Resources
Vertical/Horizontal Integration
Four Ethical Stances
Short
Short-term shareholder interests
Longer
Longer-term shareholder interests
Multiple stakeholder interests
Shaper of society
Strategic Choices continued…
Defining discrete strategic areas
that affect the direction of the
company.
Prioritising these areas
Determining the driving force for
the present and the future
Identifying changes that must take
place
Helping establish a clear direction
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Long Term Objectives
What are they?
They focus on a a position to be achieved
rather than specific accomplishments.
Describes what the organisation desires
to have or become
Where do they originate?
They derive from the purpose/vision,
analysis and strategic areas.
Criteria
Measurable or assessable; Achievable or
feasible flexible or adaptable; Consistent
Integrated Actions
Identify the results needed to accomplish
each long term objective and then ask:
What are the measurable results
and time frames?
What are the specific actions
required?
Who is accountable?
What resources should be allocated
What feedback mechanisms are in
place?
What’s the Link?
Do you ever feel that you and others are too
focussed on individual tasks and not aware of
where it all fits in the big picture?
Do you ever feel that you know what you
need to achieve the goal but unsure of how
everything fits to get you there?
Do you ever consider rere-arranging what we
have in order to achieve your goals…or do
you focus on what you’re missing?
Have you ever viewed something as impossible
without first clarifying what is expected and
then consider solutions?
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