UNIVERSITY OF DAR ES SALAAM BUSINESS SCHOOL

GM.300: STRATEGIC MANAGEMENT

Series of Lecture Presentations TOPIC 1 & 2
TOPIC ONE: STRATEGIC MANAGEMENT IN CONTEXT
Think of these philosophical quotations:
If we know where we are and something about how we got there, we might see where we are tendingand if the outcomes which lie naturally in our course are unacceptable, to make timely change
(Abraham Lincoln)
Without a strategy, an organization is like a ship without a rudder, going around in circles. Its like a
tramp; it has no place to go (Joel Ross and Michael Kami)
Plans are less important than planning (Dale McConkey)
Most of us fear change. Even when our minds say change is normal, our stomachs quiver at the
prospect. But for strategists and management today, there is no choice but to change (Robert
Waterman, Jr.)
If a man takes no thought about what is distant, he will find sorrow (surprise) near at hand. He who
will not worry about what is far off will soon find something worse than worry (Confucius)

Strategic Management-Defined
Strategic management refers to the set of decisions and actions that result in the formulation
and implementation of plans designed to achieve a companys objectives (Pearce II, J, Robinson
Jr, R. and Mital, A. ,2008)
Strategic management consists of analysis, decisions and actions an organization undertakes in
order to create and sustain competitive advantages (Dess, G. and Lumpkin, G. ,2003)
Strategic management can be defined as the art and science of formulating, implementing and
evaluating cross-functional decisions that enable an organization to achieve its objectives.
(David, F., 2009)
Strategic management refers to a set of managerial decisions and actions that determines the
long-run corporate performance (Wheelen, T. and Hunger, J., 2004)

Managerial Critical Tasks and Responsibilities Embedded in Strategic Mgt.

Establishing the company mission, vision, philosophy, policies, strategic objectives and strategies
Conducting an analysis that reflects the companys internal conditions and capabilities
Assessing the companys external environment ; general and critical environment
Analyzing the companys options by matching its resources with the external environment
Identifying the most desirable options in line with the company mission
Selecting a set of long term objectives and strategies to achieve them
Developing medium and short term objectives and strategies that are compatible with long term
objectives and strategies
Implementing the strategic choices by means of budgeted resource allocations by matching
tasks, people, structures, technologies and reward systems

Evaluating the success of the strategic process as an input for future decision making
Provision of human resources; by strategically executing both core and non-core functions of
SHRM
Establishing procedures; prescribing how all important recurrent tasks should be done
Provision of appropriate facilities; equipment and other physical facilities to support business
operations
Provision of adequate capital; working capital
Setting standards of performance across strategic functional areas
Developing programmes and action plans
Provision of control information; through facts and figures
Activating the workforce
Key Attributes of Strategic Mgt.
Is directed towards overall organizational objectives; what is the best for the entire
organization-not just a single functional area
Involves multiple stakeholders in decision making; incorporates the diverse demands of various
stakeholders
Requires the need to incorporate both long term and short term perspectives referred to as
creative tension.
Involves the recognition of trade-offs between effectiveness and efficiency

Levels of Organization Strategy and the Associated Responsibilities

There are three levels that are involved in decision making pertaining to organization strategy
1. Corporate Level:
Is composed of a board of directors and the chief executive
Is responsible for both financial and non-financial performance of the organization
Determines the business (s) in which the organization should be involved
Require considering the organizations external environment; all organizations exist in an open
system. They affect and are affected by external conditions that are largely beyond their control
Sets strategic objectives and formulate strategies that govern all functional
areas
Exploits the organizations distinctive competencies by adopting a portfolio
approach to the management of talents
Is responsible for strategic planning and management; develops the major
portions of the strategic plan
Reviews and advices accordingly the subsequent plans
The CEO is responsible for giving the long term direction to the organization.
Characteristics of Corporate Level Decisions:
Tend to be more value oriented
Tend to be more conceptual and less concrete than the decisions at the business and functional
levels
The decisions are characterized by greater risk, cost but have greater profit potential

 The decisions need to be flexible; as they cover a longer time horizon

Business Level
Is composed of business or corporate managers depending on whether the org. is SBUs or
MBUs
Managers must translate the statements of direction and intent generated at the corporate
level into concrete objectives and strategies for individual business units in the organization
Business-level strategic managers determine how the firm will compete in the selected productmarket arena
Strive to identify and secure the most promising market segment; the market segment that the
firm can claim and defend because of its competitive advantages
Managers at business level are responsible for undertaking business environment scanning,
establishing business objectives and developing business plans
Characteristics of Decisions:
They bridge the gap between the corporate level and functional level decisions
They are less costly, risky, and potentially profitable than corporate level decisions
They are more costly, risky, and potentially profitable than functional level decisions
Common business level decisions include; business location, market segmentation ,
geographic coverage and distribution channels
Functional Level:
Is composed of product, geographical areas and functional managers
Managers develop annual objectives and short term strategies in areas such as
production, operations, research and development, finance and accounting, marketing
and human resources
However, their major responsibility is to implement or execute the organizations
strategic plan
While corporate and business level managers are concerned with Doing the Right
Things managers at the functional level are concerned with Doing Things Right
Functional Level Ctd
They address issues such as efficiency and effectiveness of production and marketing
systems, the quality of customer service, the success of particular products and services
in increasing the firms market shares.
Characteristics of Decisions:
Are relatively concrete and quantifiable
Common decisions: generic versus brand name labeling, basic versus applied R&D, high
versus low inventory levels, general-purpose versus specific-purpose production
equipment, close versus loose supervision.
Organization Levels as Reflected in the Org. Structures For SBUs
Organization Levels as Reflected in the Org. Structures For MBUs
Benefits of Strategic Management
Strategic management practices enhance the organizations ability to prevent problems
Group based strategic decisions are likely to be drawn from the best available alternatives.

The involvement of employees in strategy formulation improves their understanding of the

productivity-reward relationship in every strategic plan and thus, heightens their motivation
Benefits of Strategic Management Ctd.
Gaps and overlaps in activities among individuals and groups are reduced in the organization
Resistance to change is reduced through the active participation in strategy formulation and
implementation
The Strategic Management Model
SWOT /C
Analysis
Strategic Planning dimension is comprised of five sub-processes
1. SWOT/C Analysis; analysis of the organizations strengths, Weaknesses, Opportunities and
Threats/Challenges
2. Formulation of Mission and Vision
3. Formulation of Philosophy and Policies
4. Determination of Strategic Objectives
5. Determination of Organization Strategy
Implementation and Control Dimension; involves the execution and monitoring of organization strategy
Ongoing Strategic Management Processes
Strategic management entails three ongoing processes
1. Analysis; is a continuous analysis of management practices and both the internal and external
business environment
2. Decision Making; managers are constantly engaged in decision making incremental decisions on
various business operations.
Ongoing Strategic Management Processes Ctd & Characteristics of Strategic Decisions
3. Action Taking; taking timely actions on various business operations
Characteristic of Strategic Decisions
Organizational wise influence; the impacts are felt throughout the organization and across all
functional areas
Long-term Impacts; have long-term consequences for the company
Future oriented in nature; are pro-active rather than being reactive
Characteristics of Strategic Decisions Ctd
Adherence to systems theory; are made after a thorough evaluation of their impacts and
consequences on the whole organization as well as its component areas.
Adherence to open- Systems perspective; accommodates the fact that the internal functioning
and operations of any organization affect and is in turn affected by the external business
environment
Provide framework for lower-levels decision making; are like an umbrella under which lower
levels decisions are made
Characteristics of Strategic Decisions Ctd
Deployment of massive resources; the implementation of strategic decisions involves the
allocation of substantial resources as they are long-term in nature

Seminar Presentation Tasks

Task 1:
Think of the choice of your life partner as a strategic decision. How would the strategic management
model be helpful to you in identifying the most promising life partner in your life?

Seminar Presentation Tasks Ctd.

Task 2:
After graduation, you are not likely to move directly to a top-level position. In fact, few members of your
class will ever reach top-management level. Why, then, is it important to study strategic mgt?
Thank you for your active participation!!
END OF TOPIC ONE
TOPIC
TWO
FORMULATING THE DIRECTION FOR THE COMPANY
Company/Organization Mission Statement
Think of the Following Mission Statements:
University of Dar Es Salaam Mission Statement:
The unrelenting pursuit of scholarly and strategic research, education, training and public service
directed at attainment and sustainable socio-economic development of Tanzania and the rest of Africa

Company/Organization Mission Statement Ctd

University of Dar Es Salaam Business School Mission Statement
To provide quality entrepreneurship, business management and governance training, research and
advisory services for development of Tanzania and the rest of the world
What is a Company/Organizations Mission Statement?
Is the unique purpose that sets a company apart from others of its type and identifies the scope
of its operations by focusing on product, market and technology employed.
Describes the company/organizations product, market and technological areas of emphasis.
Communicates the values and priorities of the company/organizations strategic makers.
What is a Company/Organizations Mission Statement? Ctd.
Originates from the organization itself. It defines the business that the organization is in line
with the values and expectations of the stakeholders
Contains broadly outlined or implied objectives and strategies rather than specific directives
Has no measurable targets but represents the attitude, outlook and orientation of the company.
What is a Company/Organizations Mission Statement? Ctd.
The mission statement is a message designed to represent the expectations of all stakeholders
on the companys performance over the long run
The executives and the board of directors who prepare the mission statement attempt to
provide a unifying purpose for the company
Good mission statements incorporate the concept of stake holder management
What is a Company/Organizations Mission Statement? Ctd.
The stakeholders management concept emphasizes that organizations must respond to
multiple constituencies if they are to survive and prosper.

A good mission statement must communicate why an organization is special and different
Researches in strategic management have revealed that most successful companies mentioned
values other than profits as their key mission.
What is a Company/Organizations Mission Statement? Ctd.
Represents an organizations enduring, overarching strategic priorities and competitive
positioning
Mission statements can and should change when competitive conditions dramatically change or
the company is faced with new threats or opportunities
Mission statements can vary in length and specificity
What is a Company/Organizations Mission Statement? Ctd.
Employees of the company or departments are the key missions audience.
For them, the mission should help to build a common understanding of purpose and
commitment to nurture
The Key Questions Addressed by the Mission 1. 1. Why is the company/organization in
business?
2. What are the company/organizations
economic goals?
What is a Company/Organizations Mission Statement? Ctd.
3. What is the company/organizations operating philosophy in terms of quality, company image, and
self concept?
4. What are the company/organizations core competencies and competitive advantages?
5. What customers do and can the company/organization serve?
6. How does the company/organization view its responsibilities to stakeholders?

Refining the Organization/Company Mission

As the company grows or is forced by competitive pressures to alter its product, market,
or technology-redefining the companys mission statement becomes necessary
However, the refined mission statement is expected to have the same components
aspects like the original mission statement :
1. Should state the basic type of product or service to be offered
2. The primary markets or customers to be served
Refining the Organization/Company Mission
3. The technology to be used in the production or delivery
4. The companys fundamental concern for survival through growth and profitability
5. The companys managerial philosophy
6. The public image the company seeks to establish and maintain
7. The companys self concept

Qualities of Good Mission Statements

1. Should be broad in scope
2. Should not be excessively specific
3. Should generate a range of feasible strategic alternatives

4. Should reconcile interests among diverse stakeholders

5. Should be balanced in terms of specificity and generality
6. Should arouse positive feelings and emotions among the various stakeholders

Qualities of Good Mission Statements Ctd

7. Should be motivating to readers in taking active roles (actions)
8. Should generate an impression that the company is successful, has a clear direction and is worthy of
resources
9. Should be judgmental e.g. On future growth
10. Should provide criteria for the selection of strategies
11. Should be the basis for generating and screening strategic options
12. Should be dynamic in orientation
A Typical Example of a Good Mission Statement
Preamble
We, the management of BCG Company, here set forth our belief as to the purpose for which the
company is established and the principles under which it should operate. We pledge our effort to the
accomplishment of these purposes within these principles.
Basic Purpose
The basic purpose of BCG Company is to perpetuate an investor-owned company engaging in various
phases of energy business, striving for balance among those phases so as to render needed satisfactory
products and services and earn optimum, long range profits
What We Do
The principal business of the company, through its utility subsidiary, is the provision of energy through a
pipe system to meet the needs of ultimate consumers. To accomplish its basic purpose, and to ensure its
strength, the company will engage in other energy-related activities, directly or through subsidiaries or
in participation with other persons, corporations, firms or entities.
A Typical Example of a Good Mission Statement Ctd.
All activities of the company shall be consistent with its responsibilities to investors, customers,
employees and the public and its concern for the optimum development and utilization of natural
resources and for environmental needs
Where Do We Do It
The companys operations shall be primarily in the Republic of Tanzania, but no self-imposed or
regulatory geographical limitations are placed up on the acquisition, development, processing,
transportation or storage of energy resources, or up on other energy-related ventures in which the
company may engage. The company will engage in such activities in any location where, after careful
review, it has determined that such activity is in the best interest of its stakeholders.
Utility service will be offered in the territory of the companys utility subsidiary to the best of its ability,
in accordance with the requirements of regulatory agencies and pursuant to the subsidiarys purposes
and principles.
Organization Vision Statement
Think of the following statements
University of Dar Es Salaam Vision Statement:

To become a reputable world-class university that is responsive to national, regional and global
development needs through engagement in dynamic knowledge creation and application
University of Dar Es Salaam Business School Vision Statement:
To become a world-class business school that is responsive to development needs through innovation
in knowledge creation and application in the areas of entrepreneurship, business management and
governance
Organization Vision Statement Ctd
What is vision statement?
While mission statement expresses an answer to the question what business are we in? A
company vision statement is developed to express the aspirations of the company.
Provides the blue print/framework for the companys strategic planning
May apply to the entire company or to a single business unit
Through it the company articulates its dreams and hopes
What is vision statement? Ctd
It keeps on reminding the company on what it is committed to build
The vision statement does not tell how will the company realize its dreams rather sets the
direction for the companys strategic planning
Essentially, the vision statement is for the companys internal use ie. For management and all
staffs not customers or clients
An appropriate vision statement should be based on the companys mission and core
competencies
What is vision statement? Ctd
A vision statement guides the company in determining resource allocation
The vision statement should be short, concise and preferably limited to one sentence
The purpose of the vision statement is not to serve as a benchmark of success or failure of the
company. Rather it serves as a motivating statement to get the organization members to
imagine what is possible to be attained
Strategically, there should be organizational-wide involvement in devising the companys vision

What is vision statement? Ctd

A vision statement is often expressed as a unique way to combine competitive influences in a
way that directs a company to pursue a revolutionary strategy
The companys vision is normally founded on SWOT analysis.
The vision statement presents the inspiration, framework for all strategic plans
A vision statement may apply to an entire company or to a single division of the company.
Whatever the case may be, a vision statement aims at answering the question on Where do we
want to go?
What is Expected From the Vision?
1. What the company wants to become
2. An ideal companys position in the future
3. Openness of the company to substantive change
4. A goal wealth stretching for the company

5. The core elements of the organization strategy

6. The change that the company seeks to see in the community/country in which the company
operates
7. The companys emotions

Qualities of Good Vision Statements

Should be concrete and specific
Should be positive and inspiring
Should be surprising or unexpected
Should be credible
Should be simple
Should be bold, challenging and exciting
Should be attainable
Should be the beginning of a convincing story
Importance of Vision and Mission Statements
Portray an agreement of purpose within the organization
Are basis for allocating resources
They establish organizational climate
They act as focal points for organizational direction
They act as parameters of assessment and control of cost, time and performance
QUESTIONS
1. To what extent do you agree that a mission statement provides a substantive guidance while a vision
statement provides inspirational guidance? Discuss by using some practical examples from any
company/companies of your choice.
2. Provide some evidence that portray the valuable role played by the companys mission statement
Seminar Presentation Tasks
3. Prepare one page mission statement for University of Dar Es Salaam Business School
Company Philosophy
Also called the company creed/doctrine
Usually accompanies or appears within the mission statement
It reflects or specifies the basic beliefs, values, aspirations and philosophical priorities to which
strategic decision makers are committed in managing the company
Company Philosophy Ctd.
It portrays the organization image to the public which include the current and potential
customers
In most cases philosophies vary little from one firm to another
The companys philosophy represents a general, unwritten code of behaviour that governs
business actions
Normally it represents the organization culture
Company Philosophy Ctd.
It portrays the organization image to the public which include the current and potential
customers

Thus, the company philosophy intends to build a good image of the organization to the public.
It presents the companys self concept; the extent to which the company can relate functionally
to its external environment. To compete in a competitive situation, the company must
realistically evaluate its competitive strengths and weaknesses
Company Philosophy Ctd.
Typical focuses of most organization philosophies are such as; respect for mankind equity and
dignity, adherence to professional ethics, customer orientedness in all the organization's
operations.

Typical Example of the Company Philosophy

Ashok Leylands Statement of Philosophy:
We believe that our impressive strides in the market place stem in equal parts from our proactive
approach and our customers unstinting support, earned the only way we know: by giving our customers
the most appropriate transport solutions for each of their applications, and by backing them up with
consultancy, finance, driver training and a responsive after-market network. We are conscious of the
fact that vehicles are more than just a means of transporting people and goods; we understand that
they have a deep and far-reaching impact on society, the national economy, and the environment.
We have therefore, always endeavoured to engineer products and systems that promote progress on all
these fronts. We firmly believe that this honest approach will make the Ashok Leyland marquee the
symbol of the very best in transportation, today and tomorrow.
The five AL values are: International, Speedy, Value creator, Innovative
and Ethical
Organization Policies/Standard Operating Procedures
Are directives designed to guide the thinking, decisions and actions of managers and their
subordinates in implementing the organization strategy
Are broad, precedent-setting decisions that guide or substitute for repetitive or time-sensitive
managerial decision making
Policies increase managerial effectiveness by standardizing decisions and clarifying the
managerial and subordinates discretionary power in decision making
Organization Policies/Standard Operating Procedures Ctd..
Logically, policies should be derived from functional strategy
However, in most cases they are derived from corporate or business strategies
Appropriate organization policies should be consistent with the organization philosophy
Policies aim at limiting the scope of alternatives that must be considered in the implementation
of organization strategy.
Organization Policies/Standard Operating Procedures Ctd..
Policies aim at guiding the thinking, decision making, and actions of managerial and nonmanagerial staff
Organization policies can be categorized into two broader categories:
1. Strategic planning policies- reflecting the planning dimension of strategic management
2. Implementation and control policies; reflecting the implementation and control dimension of
strategic management.

 Benefits of Policies
They establish indirect control over independent actions by clearly stating how things are to be
done now.
In addition, by defining discretion, policies in effect control decisions yet empower staff to
conduct activities without direct intervention by top management
They promote uniform handling of similar activities
Benefits of Policies Ctd
They ensure quicker decisions by standardizing answers to previously answered questions that
otherwise would recur and be pushed up to management hierarchy
Policies institutionalize basic aspects of organization behaviour. This minimizes conflict practices
and establishes consistent patterns of action in attempts to make the strategy to work.
Benefits of Policies Ctd.
They reduce uncertainty in repetitive and day-to-day decision making, by doing so they provide
a necessary foundation for coordinated, efficient efforts and freeing operating staff to act
Policies counteract resistance to or rejection of chosen strategies by organization members
Policies offer predetermined answers to routinely problems.
Policies afford managers a mechanism for avoiding hasty and ill-conceived decisions in case of
emergency
Forms of Policies
There are two forms
1. Informal Unwritten
2. Formal Written
Informal Unwritten:
Are normally associated with a strategic need to for competitive secrecy
These policies if not well managed can negatively contribute to unclear company direction.
Forms of Policies Ctd.
Formal Written Policies:
Are documented for reference purposes
Advantages:
They provide managers with an opportunity to think through the meaning, content and
intended use of the policy
They reduce misunderstanding
They make equitable and consistent treatment of similar problems
They ensure unchangeable transmission of policies across the management teams
Advantages of Formal Written Policies Ctd.
They communicate the authorization or sanction provided by the policies more clearly
They supply a convenient and authoritative reference
They systematically enhance indirect control and organization-wide coordination of the key
purposes of policies
Setting Org. Strategic Objectives
Represents the end targets of organization operations in realizing organizations basic mission

They provide the expected outcomes of the business operations and thus used as benchmarks
for organizational performance management.
Are expected to be the end points of all managerial functions such as Planning, organizing,
controlling, staffing

Forms of Strategic Objectives:

1. Long-term objectives
2. Medium term objectives
3. Short-term objectives
Focus Areas for Long-term Objectives:
Profitability; expressed in terms of earnings per share or return in equity
Productivity; is concerned with improving the input-output relationship
Commonly used productivity measures; the number of items produced or the number of
services rendered per unit of input or desired cost reduction
Focus Areas for Long-term Objectives Ctd
Competitive position in the market; the relative dominance in the market. It is measured in
terms of total sales or market share
Employee development; proactive HR development objectives
Employee relations; proactive thinking and action taking on employee relations creates
favourable working environment that can enhance productivity and hence contribute to
profitability
Focus Areas for Long-term Objectives Ctd
Technological leadership; companies may decide to either lead or follow other companies
regarding technology. In each case there should be appropriate strategy
Corporate Social Responsibility (CSR)
Economic
Legal
Ethical
Discretionary

Characterizing Features of Effective Strategic Objectives

Acceptability; by managers and operational staff
Specificity- stating exactly what is to be realized
Measurable- they must have tangible parameters that can be used to assess their realization
Attainability- they should reflect on the companies capability in terms of skills, competencies
and resources

Characterizing Features of Effective Strategic Objectives Ctd

Realistic- being practical-avoid over ambitious objectives. It is advised that, objectives need to
be continually refined to reflect the actual strengths and opportunities
Time bound- stating the time horizon over which they are to be realized

 Should be mutually consistent with all functional areas of the organization

Short-term objectives should complement long term objectives
Characterizing Features of Effective Strategic Objectives Ctd
Challenging; instills the spirit of competition and appropriate utilization of resources for
competitive advantage.
Flexibility; taking care of changes in business conditions
Motivating; having inbuilt motivation
Suitability; must be suited to the companys mission and vision
Understandable; clear translation across functional areas and organizational levels

Key Focus Areas of Medium and Short-term Objectives

Profitability
Capturing the market share
Research and Development
Human Resources
Attainment of appropriate physical resources
Reduced production costs (productivity)
Improved customer services
Corporate Social responsibility
Some of the Key Factors Influencing the Formulation of Strategic Objectives
Can be categorized into; Internal and External categories.
Internal Factors; include the personal value systems of managers, the availability of resources
both monetary and non-monetary
External Factors; include availability of business opportunities, threats associated business
opportunities, regulatory framework, political will etc.
END OF TOPIC TWO!!!
Thank you for your Active Participation!!!
QUESTIONS
Task 1.
Identify any five (5) mission statements from any reputable organizations that you are familiar with.
Thereafter, critically discuss the extent to which each mission serves the purpose for which it was
devised
Task 2.
Identify any five (5) vision statements from any reputable organizations that you are familiar with.
Thereafter, critically discuss the extent to which each vision serves the purpose for which it was devised