STRATEGIC MANAGEMENT

1. THE SERVICE-LEARNING PAPER (Learning Experiences in Communities) STRATEGIC MANAGEMENT Winnie M. Constantino AGSB

2. AGENDA Session Objective The LEC/Service-Learning Project: An Overview A Review of the Strategic Management Process The Service-Learning Paper: Outline and Contents The Conduct of Research and Planning Process Milestones and Timetable

3. OBJECTIVE OF THIS SESSION • To discuss the LEC and Service-Learning Project and Paper in the context of Strategic Management: • Review the strategic planning process and discuss its application in the formulation of the Service-Learning plan • Agree on the outline and expected contents of the Service-Learning paper

4. THE LEC/SERVICE-LEARNING PROJECT: AN OVERVIEW By: Prof. Ray Baquiran

5. A REVIEW OF THESTRATEGIC MANAGEMENT PROCESS

6. “The art and science of formulating, implementing, and evaluatingstrategies that enable an organization to achieve its objectives.” STRATEGIC MANAGEMENT DEFINITION

7. A company’s strategyis the “game plan” management has for achieving the organization’s goals and objectives and for attaining good performance. STRATEGIC MANAGEMENT DEFINITION

8. Strategy Formulation Strategy Implementation Strategy Monitoring/Control STRATEGIC MANAGEMENT / STRATEGIC PLANNING PROCESS

9. THE STRATEGIC MANAGEMENT PROCESS STRATEGY FORMULATION IMPLEMENTATION MONITORING External Analysis Dev’t of Vision/ Mission Statement Establish Long-term Objectives Generate Evaluate, And Select Strategies Implement Strategies: Set & execute action plans by functional units Measure and Evaluate Performance Internal Analysis Note that there is an iteration process involved, thus the arrows can go back to the opposite direction.

10. Business (For Profit) • Multinational companies • Domestic Companies • Multi-business; Single-business • Small, medium, large • Various industry sectors • Public; Family-owned • Start-up, Mature Non-Profit • Government • NGO’s • Cooperatives • Schools/Universities • Foundations TYPES OF ORGANIZATION

11. THESERVICE-LEARNING PAPER: OUTLINE AND CONTENTS

12. Part A: BACKGROUND AND ANALYSIS • Background on the Partner-Organization • Research Methodology • Community Assessment (External Analysis) • Organizational Assessment (Internal Analysis) • Analysis of Issues and Generation of Alternative Strategies/Programs Part B: STRATEGIC PLAN/PROJECT PLAN • Strategic Thrust and Overall Objectives • Strategies and Major Programs • Scope of Proposed Program and Justification • Specific Objectives for 2010-2011 • Action Plan • Other organizational Support Needed • Financial Requirements/Fund Sources • Monitoring System: Performance Measures and Targets OUTLINE

13. OUTLINE: I. Background on the Partner Organization • Basic information: Name, when established, location and area of operation • Vision/Mission/Goals Example: To improve the well-being of the poor families in the municipality of San Jose • Major programs and Projects Examples: Livelihood Program, Credit Program, Feeding Project, Education and Training • Number of People • Funding sources Examples: Internally-generated revenues, UN, USAID, Corporate and Individual donors, Local government • Other relevant information

14. OUTLINE: II. Research Methodology • An explanation of the research methods or design used Examples: • Interviews (Identify) • Focused Group Discussions (FGD) • Survey • Data gathered from public data • Past studies • Data sources Examples: NSO, NEDA, Municipal government, NGO data • Limitations, if any

15. OUTLINE: III. Community Assessment (External Analysis) 1. Geographic area (description) 2. Profile of Potential/Target beneficiaries • Population size: number of poor families • Incomes/Sources or means of livelihood • Housing conditions • Health and nutrition status • Educational attainment

16. OUTLINE: III. Community Assessment (External Analysis) 3. Relevant External Factors • Income or employment opportunities (e.g., Agriculture/farming, manufacturing, services) • Availability of government services (e.g., public schools, health clinics, etc.) • Cost of living (i.e., prices of food, transport, etc.) • Environmental and sanitation conditions (e.g., availability of potable water, toilets) • Cultural beliefs and practices • Political factors (LGU and Barangay participation, institutions/structure, decision-making process) • External stakeholders (e.g., cooperative, local government, church group, local associations)

17. OUTLINE: III. Community Assessment (External Analysis) 4. Opportunities and Threats Opportunities/Or Favorable factors • Presence of public schools and health clinics • On-going construction of some houses by GK • Current mayor supportive of anti-poverty programs • Some private companies are carrying our some Corporate Social Responsibility (CSR) projects Threats/Or Unfavorable factors • Lack of access to potable water • Poor roads and lack of transport facilities • High prices of basic commodities

18. OUTLINE: IV. Organizational Assessment (Internal Analysis) 1. Historical performance (based on success measures); Program accomplishments 2. Factors affecting performance • Leadership/Management • Funding/Financial Resources • Organizational structures • Manpower (size, skills, attitudes and motivation • Systems, policies and procedures (e.g., project approval, release of funding, monitoring system) 3. Strengths and Weaknesses

19. OUTLINE: V. Analysis of Issues and Generation of Alternative Strategies/Programs A. Analysis of Issues (Problems/root causes) • An analysis of the causesof why some people are poor in San Jose, based on the analysis of external factors. • A summary of the organizational factors that need to be addressed to improve the organization’s effectiveness in achieving its objectives. B. Generation and evaluation of strategy choices and possible programs that can address the issues: • SWOT Analysis • Problem-tree/Decision-making analysis

20. SWOT ANALYSIS

21. Evaluating Alternative Strategies/Programs Criteria: • Acceptability • Suitability • Feasibility

22. Strategies are the management decisions and programs needed in order to: • Take advantage of the opportunities and counter the threats in the business environment • Address the entity’s weaknesses and protect its strengths • Resolve the strategic issues facing the entity/organization • Achieve the entity’s strategic objectives STRATEGY FORMULATION

23. OUTLINE: Part B: STRATEGIC PLAN/PROJECT PLAN • Strategic Thrust and Overall Objectives • Strategies and Major Programs • Proposed Project • Specific Objectives for 2011-2012 • Action Plan • Other Organizational Support needed • Financial Requirements/Fund Sources • Monitoring System: Performance Measures and Targets

24. Note: Hierarchy of Strategies/Objectives • Vision/Mission • Long-term Objectives • Strategic Objectives/Strategic Thrust • Strategies and Programs • Sub-strategies/Projects • Action Plans (Activities)

25. ACTION PLAN (Do this for each program or project)

26. VI. Other Organizational Support Needed Examples: Resource allocation Training Equipment Manpower Changes in policies and procedures VII. Financial Requirements Estimate how much is needed to carry out the plan or the project

27. VIII. Monitoring System Performance Measures/ Success Indicators Monitoring mechanism

28. Guidelines on Grouping and Scope of Project Big Group can work on Common Chapters of the Analysis and Planning for the whole Partner Organization Small Groups to work on Different Projects

29. Guidelines on the Process • Community Assessment • Discuss with partner organization • Talk to potential/target beneficiaries • Proper handling of family and community meetings • Gather data • Do field work • Internal Assessment • Do this in collaboration with partner organization • Conduct surveys, interviews or focused group discussions • Use strategies for collaboration learned in other modules • Facilitating and listening skills • Giving feedback • Strategy Formulation/Action Planning • Participative planning • Involve people in the organization

30. Milestones/Timetable

31. March, 2011 – Submission of Final Service- Learning PaperApril, 2011– Oral Defense

32. PART I: Sem I YL 7 (One whole-day Session) • Introduction and Overview: Strategic Management • Strategy Formulation PART II: Sem II YL7 • Consultations • Research/ Field Work • Submission of LEC paper and Oral Defense PART III: Sem I YL 8 (Six sessions of 4-hrs each) • Recap: Strategic Management Process • Strategy Formulation & Strategy Choices: Business Setting • Strategy Implementation • Strategy Monitoring & Control COURSE OUTLINE & PROGRAM

33. Class Activities 70% • Group Projects • Individual Assignment • Class Participation • Midterms • Final Exam • Strategy (LEC) Paper 30% • Written Document • Oral Defense Note: Evaluation of group projects/reports to incorporate “peer grading” GRADING SYSTEM Winnie M. Constantino AGSB

34. END OF SESSION

35. Enable you to achieve your organization’s mission/Objectives • Expand the size of your customer base. • Give new avenues for customer access • Increase the appeal of your product/service • Exploit a weakness of a competitor • Gain better access to resources • Reduce your costs • Improve your cost efficiencies and productivity • Improve your profitability/financial position EXTERNAL ANALYSIS Assessment of the external factors that impact on your organization’s performance. OPPORTUNITIES- created by favorable events, trends or possibilities for action that promise to: THREATS – unfavorable events that have the opposite impact.

36. What decisions facing a business are strategic and therefore deserve strategic management attention? • Strategic issues require top management decisions and involvement - they involve several areas of a firm’s operations • Strategic issues require large amounts of the firm’s resources - they require substantial allocation of people, physical assets or financial resources that must be obtained - they need to commit the firm to actions over an extended period • Strategic issues affect the firm’s long-term prosperity - Pearce and Robinson Strategic Management, 9th Ed. 2005 STRATEGIC ISSUES Winnie M. Constantino AGSB

37. GROUP DISCUSSION:EXTERNAL ANALYSIS

38. INTERNAL ANALYSIS

39. THE STRATEGIC MANAGEMENT PROCESS STRATEGY FORMULATION IMPLEMENTATION MONITORING External Analysis Dev’t of Vision/ Mission Statement Establish Long-term Objectives Generate Evaluate, And Select Strategies Implement Strategies:Mgt. Issues Implement Strategies:Functional Units Measure and Evaluate Performance Internal Analysis Note that there is an iteration process involved, thus the arrows can go back to the opposite direction.

40. A comprehensive and thoughtful examination of the current state of an organization which defines its capacity for succeeding in its environment. • Identification of the organization’s strengths and weaknesses. INTERNAL ANALYSIS AND ORGANIZATIONAL SCANNING

41. INTERNAL ANALYSIS AND ORGANIZATIONAL SCANNING • THIS INVOLVES: • An assessment of the organization’s business performance • A closer analysis (probing) of the reasons behind the organization’s favorable or unfavorable performance • An analysis of the various elements of the organization that affect its performance • Analysis should focus on the organizational elements that are directly or indirectly related to the critical success factors of the business or industry

42. INTERNAL SITUATION ANALYSIS • To assess how well is the company’s present strategy working, review the company’s performance based on its defined success measures. • Examples: • Revenue/Sales growth in the past few years • Market Share and how the company’s growth compares with that of the industry and other players • Company’s costs and cost structure • Company’s operating efficiencies • Company’s net profit margins and rate of return on assets or equity investment • For non-profit oriented enterprises, evaluate the company’s performance vis-à-vis its mandate.

43. IDENTIFICATION OF CRITICAL SUCCESS FACTORS • The internal factors and capabilities that an entity needs to have in order to succeed in its industry Examples: • Company reputation and image • Price competitiveness • Management capability • Cost efficiency • Quality of products and services • Range of product and service offerings • Skilled workers (availability of good doctors) • Strategic location • Capacity; Facilities and equipment • Marketing efforts • R & D capability • Financial resources/strength INTERNAL ANALYSIS AND ORGANIZATIONAL SCANNING

44. INTERNAL SITUATION ANALYSIS • The enterprise can be assessed in the various elements of organizational effectiveness.From this assessment, the important strengths and weaknesses can be identified. • The following frameworks may be used for a systematic analysis: • McKinsey’s 7-S • Weissboard Model • David’s Functional Audit

45. Management • Marketing • Finance • Human Resource Management • Production • Research & Development • Computer Information Systems Note that the functional units can vary from one entity to another depending on how it is organized and depending on its business. DAVID’S INTERNAL AUDIT CHECKLIST (FUNCTIONAL UNITS)

46. STRUCTURE SYSTEMS STRATEGY SHARED VALUES SKILLS STYLE MCKINSEY’S 7-S FRAMEWORK FOR ASSESSING THE ORGANIZATION STAFF

47. VISION STRUCTURE - skills - technology RELATIONSHIPS LEADERSHIP THE WEISBOARD MODEL FOR ASSESSING THE ORGANIZATION REWARDS / MOTIVATION - intrinsic - extrinsic HELPING MECHANISMS - culture / mindsets - resources

48. VISION AND STRATEGY Clarity Responsiveness Alignment • Mission,Goals, Objectives and Targets • Strategies, Thrusts and Directions Guide Questions: 1. Is the organization’s set of vision/mission and strategy clear to all the employees in the organization? 2. Are these appropriate given current situation?

49. LEADERSHIP/STYLE Leadership Styles Competence • Top Management • Middle-Management • First-Line Supervisors Guide Questions: 1. How would you describe the leadership style in the organization? 2. How effective is this in steering the organization towards its goals? 3. What can you say about the level of competence of the leaders ( i.e. top, middle and first line ) in managing the organization? 4. What are the most important areas for improvement and strengths?

50. STRUCTURE/SKILLS Clarity Appropriateness Effectiveness • Tasks and Work processes • Skills • Technology • Organization Structure • Job Design • Work Distribution and Load • Physical Structures and • Facilities • Guide Questions: • Is the current organization structure aligned to the requirements of the • environment? If not why? What features of the structure are helpful and which ones interfere with efficient functioning? • 2. What are the work flow processes that are most critical to organizational • functioning? Pinpoint strengths and weaknesses. • 3. Does the organization have the needed technical and managerial skills? • Identify the areas where skills and competencies are inadequate. • 4. Are the physical structures and facilities appropriate for the effective • functioning of the organization?