Critical Strategic Concepts
Consider the following questions:
1. Corporate culture is the collection of beliefs, expectations, and values learned and shared by the corporation's members and transmitted from generation of employees to another. It generally reflects the values of the founder(s).
2. The difference between strategic (long term) and tactical (short term) decisions, i.e. "where will the organization be in 10 years if not changes are made" versus "how can functional and operational areas be improved (in the short term)".
3. Tactics are used to implement strategic decisions and include the ‘who, what, when, where, and how' decisions are effected.
4. Logical incrementalism is an informed (through experience) but informal approach to planning where small changes are made continuously, especially by the CEO and other members of upper management.
5. A learning organization is an organization skilled at creating acquiring and transferring useful information to reflect new knowledge and insights.
6. The Board of Directors evaluate, monitor, influence, initiate and determine an organizations long term (strategic) direction.
7. Implementation of strategic decisions in undertaken by mostly everyone in the organization (but not the Board of Directors).
8. The willingness to reject unfamiliar and negative information in environmental scanning is referred to as strategic myopia.
9. Outsourcing is when an organization chooses to go outside the organization to fulfill a strategic choice.
10. Vertical and horizontal growth strategies are examples of a concentration strategy.
11. Core competencies should not be transparent, transferable, and replicable.
12. Key success factors are those variables that can significantly affect the overall competitive positions of companies within any particular industry distinguished by their unique NAICS code.
13. Information systems strategies may include the use of extranets to develop close relationships with customers and suppliers.
14. Internal analyses include a rigorous review of an organization's marketing, finance, human resources, operations/production, and systems/information capabilities relative to the industry and the external environment resulting in a list of an organization's strengths and weaknesses.
15. Scenario analysis is built on the historical environmental analysis, i.e. economic, political/legal, technological, socio-cultural, ethical, and ecological factors (variables) that cause an industry to grow or shrink. Prior to strategic formulation an organization forecasts scenarios from different perspectives, i.e. optimistic, realistic, and pessimistic. If an organization faces a pessimistic future, a conglomerate (vs. concentric) diversification strategy is necessary for survival.
16. When an organization formulates a new strategy, it is imperative that the organization create a new or revised organizational structure. Simple structures generally are used by small single product firms. Large multinational firms tend to have either multi-domestic (a different structure in each geographic market typical of retailing, insurance and banking industries) or transnational/global structures (unique organizational structures for regions of the world (e.g. Asia-Pacific, North America, Latin America, etc. typical of the automobiles and computer industries).
17. Corporate directional strategies are growth strategies (concentration, concentric and conglomerate), stability (maintain present direction and intensity), and retrenchment (turnaround, sell-out/divestment, and bankruptcy/liquidation).
18. Evaluation and control in strategic implementation must provide measureable expected (vs. actual) outcomes, e.g. ROA, ROI, liquidity measures, market share, productivity, new product introduction, and etc..).
19. Finally, an old adage spoken by a former mentor and friend, Dr. George S. Odiorne, "... organizations that don't change, remain the same...". Therefore, in an ever-changing world, organizations must continue to learn and make thoughtful strategic choices.