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 Contents
1. Strategic and Business Planning
2. Three Key Strategic Questions
3. Composition of Strategic Management
4. Basic Elements of the Strategic Management Process
5. Strategic Management Model
6. Environmental Variables
7. Definition of Strategy Formulation
8. Definition of Vision
9. Definition of Mission
10. What Should be in a Mission Statement?
11. Definition of Objectives
12. Making Goal Setting Effective
13. Strategic Decision-Making Process
14. Definition of Strategy Implementation
15. Main Elements of Strategic Audit

1. Strategic and Business Planning

 Strategic planning
Strategic planning looks outward to establish the context in which the
organization or business unit will operate with respect to its defined
mission, and to set the vision for a desired future state.

 Business planning
Business planning looks inward to organize available resources in
pursuit of the vision. Both levels of planning rely on definitive
objectives and quantitative measures of performance to guide and
monitor progress.

2. Three Key Strategic Questions

 Where is the organization now?
 If no changes are made, where will the organization be in one, two,
five or ten years? Are the answers acceptable?
 If the answers are not acceptable, what specific actions should
management undertake? What are the risks and payoffs involved?

3. Composition of Strategic Management

 Strategic Management is Composed of
o Environmental scanning

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 o Strategy formulation
o Strategy implementation
o Evaluation and control

4. Basic Elements of the Strategic Management

Process

5. Strategic Management Model

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 6. Environmental Variables
 Societal Environment PEST
o Composed of general Economical forces in environment
(Political -– Social - Technological
 Task Environment
o Groups in environment that directly affect or are affected by
the organization’s operations
(Often called industry)
 Structure
o The way an Organization is organized in terms of
communication, authority, and workflow
 Organization Culture
o Collection of beliefs, expectations, and values learned and
shared by members and transmitted from one generation of
employees to another
 Resources
o An asset, competency, process, skill, or knowledge controlled
by the corporation

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 7. Definition of Strategy Formulation
 Strategy Formulation
o The process of developing long-range plans to deal
effectively with environmental opportunities and threats in
light of the organization strengths and weaknesses
 Composed of
o Vision/ Mission
o Objectives
o Strategies
o Policies

8. Definition of Vision
 The vision provides a description of what the organization will evolve
into in the future. It states what the organization wants to become &
where it wants to go.
 There is one universal rule of planning: You will never be greater than
the vision that guides you.

9. Definition of Mission
 The purpose or reason for the organization’s existence and
 What it must do to justify its existence
o Products & Service offered & Areas of specialization
o Nature & location of business's marketing territory
o Clientele served & Stakeholders & How we will satisfy them
o Core Values: Ethical, Professional, Social

It may be narrow or broad in scope

Narrow Broad
Railroad
Transportation
Insurance
Financial Services

10. What Should be in a Mission Statement?

10.1 The Purpose Statement

o The purpose statement clearly states what your
organization seeks to accomplish:
o Why does your organization exist?
o What is the ultimate result of your work?
o Purpose statements usually include two phrases:

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  an infinitive that indicates a change in status,
such as to increase, to decrease, to prevent,
to eliminate
 an identification of the problem or condition to
be changed
10.2 The Business Statement
o This statement outlines the business your
organization chooses in order to pursue its purpose.
o Specifically, you must answer, "What activity are we
going to do to accomplish our purpose?"
o Business statements often include the verb "to
provide" or link a purpose statement with the words
"by" or "through."
o A cautionary note: If the word "and" is in your
purpose or business statement, ask yourselves, "Are
we really committed to both ideas connected by the
word" and, "or have we simply not been able to
accept that one idea is more important?"
10.3 Statement of Values
o Organization's Core Values, Believes & Behavioral
Standards. There are three groups of values: ethical
values, Professional values, Public & society values
o Ethical values:
Integrity, Honesty & Impartiality etc.
o Professional values:
Maximizing stakeholders value added, Innovation,
Quality, Flexibility & Responsiveness, Partnership,
Continuous Improvement etc.
o Public & Society Values:
responsibilities towards our society, environment,
Social & Legal Responsibilities

11. Definition of Objectives

 The end results of planned activity. They state WHAT is to be
accomplished by WHEN. They should be quantified, if possible.

11.1 Areas in Which to Set Objectives

o Profitability
o Contributions to employees
o Efficiency
o Contributions to society
o Shareholder wealth
o Market leadership
o Growth
o Technological leadership
o Utilization of resources
o Survival

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 o Reputation
o Personal needs of management
11.2 Objectives should be
o Relevant
o Able to provide balance
o Practical
o Able to provide contingency
o Challenging
o Ranked in order of importance
o Measurable
o Clearly stated
o Schedulable
o Realistically stated
o Flexible
o Innovative
o Timely
o Limited in number
o Show growth
o Cost effective

12. Making Goal Setting Effective

i. Managers should understand the purposes of goals.
ii. Goals should be properly stated.
a. They should be specific.
b. They should be concise.
c. They should be time-related.
iii. Goals should be horizontally and vertically consistent.
iv. Managers must accept and be committed to the goals.
v. The goal-setting process should be integrated with the reward
system, but it should also have a diagnostic component.

13. Strategic Decision-Making Process

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 14. Definition of Strategy Implementation
 The process of putting strategies and policies into action through the
development of
o Programs
o Budgets
o Procedures

15. Main Elements of Strategic Audit

i. Current Situation
a. Performance
b. Strategic Posture
ii. Corporate Governance
a. Board of Directors
b. Top Management
iii. External Environment

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 a. Societal
b. Task (Industry)
c. Opportunities and Threats (EFAS)
iv. Internal Environment
a. Structureb. Culture
b. Resources (Mkt, Fin, R&D, Etc.)
c. Strengths and Weaknesses (IFAS)
v. Analysis of Strategic Factors
a. SWOT Analysis (SFAS)
b. Review Mission and Objectives
vi. Strategic Alternatives and Recommendations
a. Alternatives
b. Recommended Strategy
vii. Implementation
a. Programs
b. Budgets
c. Procedures
viii. Evaluation and Control
a. Adequate Information System
b. Adequate Control Measures

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