PART 1 INTRODUCTION TO STRATEGIC MANAGEMENT

Chapter 1: Strategic Management

1. INTRODUCTION

An important key to the long-term prosperity of any organization is high-quality strategic thinking –the ability to look ahead, understand a dynamic environment, and effectively position one's organization or subunit for continued success in changing times. CEO Glass is thinking strategically as he positions Wal-Mart in new markets to help meet the retailing challenges of the decade. He is also thinking strategically when he decides to use technology to maximum advantage. And he is thinking strategically by spending time each week talking to customers and employees, and learning what is really happening where it really counts-in the stores. In each of these ways, strategic thinking is the outgrowth of proper attention to the essentials of "strategic planning" and "strategic management".

1-1. Definition of strategy

The word strategy came from the Greek word strategos, which means “a general”. At that time, strategy literally, meant the art and science of directing military forces. Today, the term strategy is used in business to describe how an organization intends to achieve its objectives and mission. Most organizations have several options for accomplishing their objectives and mission. Strategy is concerned with deciding which option is going to be used. Strategy includes the determination and evaluation of alternative paths to achieve an organization’s objectives and mission and, eventually, a choice of the alternative that is to be adopted.

The term strategy implies long-range and broad-based considerations. It implies change and uncertainty because managers are often dealing with concepts and ideas that are novel or untried, but may in the near future be commonplace. Strategy also implies an organizational responsibility to contribute to society. In this era of increased international competition, many managers are preoccupied