INTRODUCTION TO STRATEGIC PLANNING AND STRATEGIC MANAGEMENT Muhammad

INTRODUCTION TO STRATEGIC PLANNING AND STRATEGIC MANAGEMENT _____ Muhammad Nazim bin Abd. Rahman Leadership and Executive Development Cluster INTAN Bukit Kiara Updated 2018

Lecture Content: Intro. to Strategic Planning & Strategic Management q What is ‘Strategy? ’ q Five ‘P’s of Strategy q Types of Strategy: Hierarchical; Miscellaneous; and Mintzberg & Waters q Definitions of Strategic Management q Why is Strategic Management so Important? q Four Elements / Phases in Strategic Management Process q Link between Strategic Thinking, Strategic Planning and Strategic Management q Q & A Session q Recommended Readings

What is Strategy? Almost everyday we hear the word ‘strategy’ being used. One comes to wonder… what is ‘strategy’ exactly? Strategic Management

What is Strategy? Strategy = Strategic Management i. A plan of actions designed to achieve a particular goal ii. Originated from the Greek word ‘strategos’ meaning ‘the art of the general’ or ‘general’s view’ which refer to the act of maneuvering troops into position, deployment of troops before the enemy is actually engaged iii. Answers the question of: “What are the ends we seek and what are the means to achieve them? ” iv. 5 P = A plan, a ploy, a pattern, a position and a perspective (Henry Mintzberg)

Five ‘P’s for Strategy Strategic Management Five ‘P’s for Strategy by Henry Mintzberg Strategy Plan Ploy Pattern Position Perspective

Some Interesting Quotes on Strategy 1. “Strategy is when you are out of ammunition, but keep on firing so that the enemy won’t know” (Unknown) 2. “Strategies are the means by which long-term objectives will be achieved ” (Fred David, 2007) 3. “Strategy is essentially, a way of channeling resources to achieve a goal” (Nigel Nicholson, 2004) Strategic Management

Types of Strategy (Hierarchical Category) Strategic Management International / Regional National Functional STRATEGY Business / Service Organisation / Company / Corporate Industry / Sectoral

Types of Strategy [1] Type of Strategy 1 International /Regional Definition Strategic Management Example Strategy which involves l In 1999 EU strategy to create a the cooperation of single European Currency (As of multiple nations usually 2009, 13 out of 27 EU countries are within a particular using Euro) continent or region l ‘ASEAN’ strategy on widening cooperation to become ‘ASEAN + 3’

‘ASEAN’ strategy on widening cooperation to become ‘ASEAN + 3’

Strategic Management Types of Strategy [2] 2. Type of Strategy Definition Example National The main strategies of a particular nation - Introducing Vision 2020 in 1991 - Introducing 7 National Key Result Area (NKRA) in 2009 Malaysia as a fully developed nation by the year 2020

The Malaysian National Strategy Previously Strategic Management Prime Minister and Chief Secretary have introduce this framework since 2010 until 2018: SHARED VALUES MAIN PILLARS 1. 1 Malaysia: People first, Performance Now 2. Government Transformation Programme (GTP) 3. New Economic Model (NEM) 4. The 11 th Malaysia Plan 5. Economic Transformation Programme (ETP) 1. C. T. I. 2. P. C. I. 3. 8 Principles of Innovative Workers 4. 6 Principles of Citizen -centric Public Service Towards Vision 2020 TN 50

The Malaysian National Strategy Developing Strategic Management Prime Minister and Chief Secretary are developing new since the results of latest General Election in : SHARED VALUES MAIN PILLARS 1. The 11 th Malaysia Plan 2. (Guidelines highlighted in the Winning Ruling) Coalition Manifesto 3. ………………. 1. …………. 2. …………. 3. …………. Towards Vision 2020

Types of Strategy [3] 3. Strategic Management Type of Strategy Definition Example Industry / Sectoral Strategy which is focused on a particular industry or sector in a particular nation - In 2005 Malaysia established a National Biotechnology Policy which provides a comprehensive framework to guide biotechnology development efforts in the country

Types of Strategy [4] Type of Strategy 4. Definition Strategic Management Example Organisation Strategy which guides the Petronas president and group chief executive / Company / particular organisation to officer Tan Sri Wan Zulkiflee Wan Ariffin said the national oil and gas firm wants to expand Corporate achieve its goals its core business as well as diversify but is mindful of its cash position

Types of Strategy [5] 5 Strategic Management Type of Strategy Definition Example Business / Service Certain organisations are involve in more than one business or services. For each business or service, it is wise to have specific strategies - MESTEC must develop strategies for each of its services and also several strategies that encompass combination of ‘Energy, Science, Technology, Environment & Climate Change’ service After the general election to 14 (PRU-14), the entire component of the Ministry of Science, Technology and Innovation (MOSTI), Green Technology and Energy Components from the Ministry of Energy, Green Technology and Water (Ke. TTHA) and related components of Climate Change and Environment from the Ministry of Natural resources and Environment (NRE) has been restructured and formed the Ministry of Energy, Science, Technology, Environment & Climate Change (MESTECC)

Types of Strategy [6] 6 Strategic Management Type of Strategy Definition Example Functional Specific strategy for each function that exists in the business or service of a particular organisation - Each functions in the organisation, such as HR, Finance, Logistics and others need to have its own strategies to ensure goals achievement.

Types of Strategy [Miscellaneous] Financial Exit Political MISC. STRATEGY Individual – Career Sports/ – Personal Finance Game – Getting Plan Married Strategic Management

Mintzberg & Waters (1985) Categorization of Strategy Strategic Management Mintzberg & Waters (1985) taken from MINTZBERG, H. , AND WATERS, J. 1985. “Of strategies, deliberate and emergent. ” Strategic Management Journal 6, 3, 257 -272.

A Classic Example of Emergent Strategy Strategic Management A classic example of embracing emergent strategy when the situation or circumstances have changed could be seen in the “Honda Success Story”

Definitions of Strategic Management “Strategic Management is the process by which an organisation manages the formulation and implementation of its strategy” Mason Carpenter & William Sanders (2006) “Strategic Management consist of analysis, decisions and actions an organisation undertakes in order to create and sustain competitive advantages” Gregory Dess, Tom Lumpkin & Alan Eisner (2008) Strategic Management

“Strategic Management is the art and science of formulating, implementing and evaluating crossfunctional decisions that enable an organisation to achieve its objectives” Strategic Management Fred R. David (2007) “Without a strategy, an organisation is like a ship without a rudder, going around in circles ” Joel Ross and Michael Kami (1973)

Definitions of Strategic Management For this particular discussion, let us define Strategic Management as “The process of analyzing, formulating, implementing and evaluating various strategies in order to achieve organisation’s goals”

Why is Strategic Management so important? Benefits of Strategic Management 1. 2. 3. 4. 5. 6. 7. 8. Sets direction and focuses effort; Ensures a more concerted and coordinated effort; Ensures better and faster decision making; Shortens the learning curve period; Increases stakeholders confidence; Reduces wastage; Ensure limited resources are put to good use; Help organisations achieve their intended goals and uncover opportunities along the way; Strategic Management

Why is Strategic Management so important? 9. Ensures organisational survival; 10. Measures organisation’s performance so that the necessary corrective and preventive actions and continuous improvement efforts could be made; 11. Helps shape the desired future; 12. Encourages better participation; 13. Encourages the process of ‘kaizen’ or continuous improvement 14. Helps achieve and maintain competitive advantage (Best illustrated by the story of “Two CEO and the Bear. ”)

Strategic The Story of “Two CEO and The Bear” Management CEO ‘A’ CEO ‘B’ + THE BEAR

“Two CEO and the Bear” (1) Strategic Management Once there were two CEOs of two companies which competed in the same automotive industry These two CEOs decided to go on a camping trip to discuss a possible merger. They hiked deep into the woods and stumble into a cave. It was already late in the evening so they decided to have a rest and set up their tent in the cave As they came nearer to the cave they hear a deep growl and saw a big grizzly bear. The bear growl and rose on its hind legs at the mouth of the cave

“Two CEO and the Bear” (2) Instantly, CEO ‘A’ took off his knapsack and got out a pair of jogging shoes. So CEO ‘B’ said, “Hey! You can’t outrun that bear. He is fast and furious!” CEO ‘A’ responded, “Maybe I can’t outrun that bear, but I could surely outrun you!” Strategic Management

The Four (4) Elements/Phases in Strategic Management Process Strategic Analysis Strategy Formulation Strategy Implementation Strategic Management Strategy Evaluation

Link between Strategic Thinking, Strategic Planning & Strategic Management (1) Strategic Thinking Strategic Analysis Strategy Formulation Strategy Implemen tation Strategic Management Strategy Evaluation Strategic Thinking is a thinking skill in ‘seeing’ issues, problems and opportunities in a larger and broader perspective and being able to understand the inter-relation of all the elements involved so that the best course of action could be formulated to achieve the desired goals

Link between Strategic Thinking, Strategic Planning & Strategic Management (2) Strategic Thinking Strategic Analysis Strategy Formulation Strategy Implement ation Strategic Planning is the combination of strategic analysis and strategy formulation Strategic Management Strategy Evaluation

Link between Strategic Thinking, Strategic Planning & Strategic Management (3) Strategic Thinking Strategic Analysis Strategy Formulation Strategy Implement ation Strategic Management Strategy Evaluation Strategic Management is the process of analyzing, formulating, implementing and evaluating various strategies in order to achieve organisation’s goals

Q&A Session Strategic Management Are there any questions or concepts that need clarification? If not, we hope that the knowledge covered in this session is highly beneficial to all… Thank You

Recommended Reading & Viewing for the Topics of Strategic Thinking & Strategic Management 1. 2. 3. 4. 5. 6. All recently published Strategic Management text book Sun Tzu – “The Art of War” Website: www. mindtools. com Mintzberg, Ahlstrand & Lampel (2005) – “Strategy Bites Back” Mintzberg, Ahlstrand & Lampel (1998) – “Strategy Safari” Van Assen, Van den Berg & Pietersma (2009) – “Key Management Models” (2 nd Edition)