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Department
Administrative Studies
Course
ADMS 4900
Professor
You- Ta Chuang
Semester
Fall

Description
Session 1 Prescriptive/Normative Theories: what managers/firms should do Descriptive: What managers/firms would do Performance Feedback Model (Descriptive Model)  Model tells you how willing you are to change in relation to the performance of your business; Performance relative to goals (x), Probability of change (y)  When company is doing good less probability of change  negative slope  When company is doing bad more probability of change  positive slope  Bigger change when performance < goals, compared to performance > goals  Managerial Complacency: performance > goals  happy  don’t take risks  Probability of change decreases near bankruptcy, they don’t want to risk everything Chapter 1 What is Strategic Management? Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. 1. Analysis: analysis of strategic goals (vision, mission, strategic objectives) along with the analysis of the internal and external environment of the organization 2. Decisions: What industries should we compete in? How should we compete in those industries? 3. Actions/implementation: leaders must allocate the necessary resources and design the organization to bring the intended strategies to reality Strategic management is the study of why some firms outperform others.  How to compete in order to sustain a competitive advantage over others o Quality & Premiums vs. Low Cost vs. Specialization  How to avoid imitation and maintain uniqueness o Efficiency does not always entail a competitive advantage, because everyone can be efficient, you must separate yourself from your competitors by doing something they can’t, doing something different. 4 Key attributes of Strategic Management 1. Directed toward overall organizational goals: goal for one function of the firm may not be best for whole firm e.g. lowering production costs may be countered in an increase in marketing costs to sell the same bland product; over-engineering to create a superior product may lead to smaller market share due to expensive product decreasing effectiveness of competitive advantage, one must always think “from the perspective of the whole organization rather than that of the functional areas” 2. Includes multiple stakeholders in decision making: must consider effect of each decision on owners, employees, customers, suppliers, community at large etc. 3. Incorporates short-term and long-term perspectives: Managers must maintain both a vision for the future of the organization as well as a focus on its present operating needs. E.g. layoff employees cuts current costs, but can have implications in the long run for employee morale. 4. Recognizes trade-offs between efficiency and effectiveness: effectively (doing the right things), efficiently (doing things right); must not forget overall goal of the organization to meet short-term goals. You can only pursue one because you have limited resources. The Strategic Management Process Strategies don’t always work as planned. What doesn’t happen is called Unrealized Strategy. These are due to changes in the external and internal environment. From these changes will emerge new strategies (emergent strategies). Your final Realized strategy will be a mix of your intended strategy and your emergent strategies. The Role of Corporate Govern
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