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MHR 849 (14)
Chapter 1

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Ryerson University
Human Resources
MHR 849
Rupa Banerjee

Chapter 1: Strategic Management Strategy - Strategy: the formulation of organizational missions, goals, objectives, and action plans - Five Ps of strategy: o Plan: an intended course of action a firm has selected to deal with a situation o Purpose: a consistent stream of actions that sometimes are the result of deliberate plan and sometimes the result of emergent actions based on reactions to environmental changes or shifting of assumptions o Ploy: a specific manoeuvre at the tactical level with a short time horizon o Position: the location of an organization relative to its competitors and other environmental factors o Perspective: the gestalt or personality of the organization - Planning for long term future is difficult – many planner look at relatively shorter period of time (3 to 5 years) - Strategic planning must be viewed as dynamic process, moving, shifting and evolving as conditions warrant changes - Logical incrementalism: process of subtly redirecting strategy to accommodate these changes - Emergent strategy: the plan that changes incrementally due to environmental changes - Intended strategy: the formulated plan - Realized strategy: the implemented plan - A good strategy recognized complexity of these realities – strategic management anticipates future problems, provides an alignment with external contingencies and internal competencies, recognizes multiple stakeholders, and is concerned with measurable performance Strategic Types - Strategies are not idiosyncratic (unique to each organization that develops one) 1. Corporate Strategies - Corporate strategy: organizational-level decisions that focus on long-term survival - Focus on overall strategy for the company and its businesses or interests a. Restructuring Strategies I. Turnaround strategy: an attempt to increase the viability of an organization (eg. Getting rid of unprofitable products, layoffs, making the organization more efficient, or attempting to reposition it with new products) II. Divestiture: the sale or removal of a business, spinning off a business as a financially and managerially independent company or selling it outright III. Liquidation: least attractive, termination of a business and the sale of its assets IV. Bankruptcy: as formal procedure in which an appointed trustee in bankruptcy takes possession of a business’s assets and disposes of them in an orderly fashion b. Growth Strategies I. Incremental Growth – expanding the client base, increasing the products, changing the distribution networks, using technology to manage just-in-time customer purchasing II. International Growth III. Mergers and Acquisitions c. Maintenance Strategies - Harvest strategy: can also be seen as a retrenchment strategy because no investment or efforts will be made to make the business grow; therefore, the goal will be restructuring 2. Business Strategies - Business strategy: plans to build a competitive focus in one line of business - All about the means and ends - focus on best ways to compete in particular sector - Is the action plan for managing a single line business - possible for an organization to have one corporate strategy and many business strategies Business Strategy Corporate Strategy - Focus on one line of business - Examines questions about which competitive strategy to choose - Concern with how to build strong competitive position - Focus on long term survival and growth - How should we compete? Should we compete by offering products - Should we be in business? What business should we be in? at prices lower than those of the competition or by offering best service? The Strategic Planning Process - Describes the organization’s future direction, performance targ
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