Management and Leadership Principles (10–20%)
5.1 Strategic Management
Topics such as the strategic management process, forecasting, quality management, and decision analysis, including the problem-solving framework, are discussed in this section.
(a) Strategic Management Defined
(i) Strategic Management Process
Strategic management is the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals. Managers ask questions such as: What changes and trends are occurring in the competitive environment? Who are our customers? What products or services should we offer? How can we offer those products and services most efficiently? Answers to these questions help managers make choices about how to position their organization in the environment with respect to rival companies. Superior organizational performance is not a matter of luck. It is determined by the choices that managers make. Top executives use strategic management to define an overall direction for the organization, which is the firm’s grand strategy. The strategic management process is defined as a series of these activities:
Grand Strategy → Strategy Formulation (Planning) → Strategy Implementation → ...