Chapter 6 – Business Strategy
Starting point in effective management is setting goals.
Goals: objectives that a business hopes and plans to achieve.
Setting Goals – purpose:
Goal setting provides direction, guidance and motivation for all managers. This presents less potential for error in the different units of the company.
Goal setting helps firms allocate resources.
Goal setting helps to define corporate culture.
Goal setting helps managers assess performers.
Mission Statement: an organizations statement of how it will achieve its purpose in the environment in which it conducts its business.
Long-term Goals: goals set for extended periods of time, typically five years or more into the future.
Intermediate Goals: goals set for a period of one to five years.
Short-term Goals: goals set for the very near future, typically less then a year.
Strategy formulation: creation of a broad program for defining and meeting an organization’s goals.
Figure 6.1 Page 91
*Strategic Goals: long-term goals derived directly from a firm’s mission statement.
*SWOT Analysis: identification and analysis of organizational strengths and weaknesses and environmental opportunities and threats as part of strategy formulation.
*Environmental Analysis: the process of scanning the environment for threats and opportunities. (Analysis of external forces)
*Organizational Analysis: the process of analyzing a firms strengths and weaknesses. (Analysis of internal forces)
*Matching the organization and its environment.
A Hierarchy of Plans:
Strategic Plans – plans that reflect decisions about resource allocations, company priorities, and steps needed to meet strategic goals.
Tactical Plans – generally, short-range plans concerned with implementing specific aspects of a company’s strategic plans.
Operational Planes: plans setting short-term targets for daily, weekly, or monthly performance.
Levels of Strategies
Corporate-level strategy: identifies the...