Strategic Management

by Hunger, J. David; Wheelen, Thomas L.

• ISBN13: 9780130872968
• ISBN10: 0130872962
• Edition: 7th
• Format: Paperback
• Copyright: 1999-10-01
• Publisher: Pearson College Div

Summary

For courses in Strategic Management at the undergraduate senior level, or at the MBA introductory level. This comprehensive text provides an engaging look into new and traditional strategic management topics. Hunger and Wheelen's thorough coverage of topics helps students develop an understanding of the wide range of theories and research available in this field, from competitive strategy and industry analysis to environmental trends and ethics. Integration of international issues throughout provides an essential understanding of global economics and its impact on business activities in any location.

Table of Contents

Part One INTRODUCTION TO STRATEGIC MANAGEMENT AND BUSINESS POLICY
Basic Concepts of Strategic Management	1	(24)
The Study of Strategic Management	3	(3)
Phases of Strategic Management	3	(1)
Benefits of Strategic Management	4	(1)
Company Spotlight on Maytag Corporation: Initiation of Strategic Management at Maytag	5	(1)
Globalization: A Challenge to Strategic Management	6	(1)
21st Century Global Society: Regional Trade Associations Replace National Trade Barriers	7	(1)
Creating a Learning Organization	7	(1)
Basic Model of Strategic Management	8	(9)
Environmental Scanning	9	(1)
Strategy Formulation	10	(4)
Strategy Implementation	14	(1)
Evaluation and Control	15	(1)
Strategy in a Changing World: Strategic Management at Delta Airlines	16	(1)
Feedback/Learning Process	16	(1)
Initiation of Strategy: Triggering Events	17	(1)
Strategic Decision Making	17	(4)
Strategy in a Changing World: Triggering Event at Iomega Corporation	18	(1)
What Makes a Decision Strategic	18	(1)
Mintzberg's Modes of Strategic Decision-Making	18	(1)
Strategic Decision-Making Process: Aid to Better Decisions	19	(2)
Global Issues for the 21 st Century	21	(4)
Projections for the 21st Century	22	(1)
Discussion Questions	22	(1)
Key Terms	22	(1)
Strategic Practice Exercise	23	(1)
Notes	23	(2)
Corporate Governance and Social Responsibility	25	(27)
Corporate Governance: Role of the Board of Directors	26	(9)
Responsibilities of the Board	27	(2)
Members of a Board of Directors	29	(2)
Key Theory: Application of Agency Theory to Corporate Governance	31	(1)
21st Century Global Society: Hoechst AG Adds International Members to Its Board	32	(1)
Nomination and Election of Board Members	33	(1)
Organization of the Board	33	(1)
Trends in Corporate Governance	34	(1)
Corporate Governance: The Role of Top Management	35	(4)
Responsibilities of Top Management	35	(1)
Strategy in a Changing World: Board Qualifications: Diversity or Technical Competence?	36	(2)
Strategy in a Changing World: Executive Leadership at Eastman Kodak	38	(1)
Social Responsibilities of a Strategic Decision Makers	39	(4)
Responsibilities of a Business Firm	39	(2)
Corporate Stakeholders	41	(1)
Company Spotlight on Maytag Corporation: Location Decision	42	(1)
Strategy in a Changing World: Kathy Lee Gifford Has Some Bad Days	43	(1)
Ethical Decision Making	43	(5)
Some Reasons for Unethical Behavior	43	(2)
Encouraging Ethical Behavior	45	(1)
Strategy in a Changing World: Reebok Demands Human Rights Standards from Its Suppliers	46	(2)
Global Issues for the 21 st Century	48	(4)
Projections for the 21st Century	48	(1)
Discussion Questions	49	(1)
Key Terms	49	(1)
Strategic Practice Exercise	49	(1)
Notes	50	(2)
Part Two SCANNING THE ENVIRONMENT
Environmental Scanning and Industry Analysis	52	(29)
Environmental Scanning	53	(7)
Identifying External Environmental Variables	54	(4)
Identifying External Strategic Factors	58	(1)
Key Theory: Using PPP to Identify Potential Markets in Developing Nations	59	(1)
Industry Analysis: Analyzing the Task Environment	60	(12)
Porter's Approach to Industry Analysis	60	(5)
Industry Evolution	65	(1)
Categorizing International Industries	65	(1)
Company Spotlight on Maytag Corporation: Evolution of the U.S. Major Home Appliance Industry	66	(1)
International Risk Assessment	67	(1)
Strategic Groups	67	(1)
Strategic Types	68	(1)
Hypercompetition	69	(1)
Strategy in a Changing World: Microsoft Operates in a Hypercompetitive Industry	70	(1)
Creating an Industry Matrix	70	(2)
Industry/Competitive Intelligence	72	(1)
Forecasting	73	(2)
Danger of Assumptions	73	(1)
Useful Forecasting Techniques	73	(1)
21st Century Global Society: Expert Opinion on the Future of Eastern Europe	74	(1)
Synthesis of External Factors---EFAS	75	(2)
Global Issues for the 21st Century	77	(4)
Projections for the 21st Century	77	(1)
Discussion Questions	77	(1)
Key Terms	78	(1)
Strategic Practice Exercise	78	(1)
Notes	79	(2)
Internal Scanning: Organizational Analysis	81	(25)
A Resource-Based Approach to Organizational Analysis	82	(2)
Using Resources to Gain Competitive Advantage	82	(1)
Determining the Sustainability of an Advantage	83	(1)
Value-Chain Analysis	84	(3)
Industry Value-Chain Analysis	85	(1)
Corporate Value-Chain Analysis	86	(1)
Scanning Functional Resources	87	(13)
Basic Organizational Structures	87	(2)
Corporate Culture: The Company Way	89	(1)
Strategic Marketing Issues	90	(1)
21st Century Global Society: ABB Uses Corporate Culture as a Competitive Advantage	91	(1)
Strategic Financial Issues	91	(1)
Company Spotlight on Maytag Corporation: Culture as a Key Strength	92	(1)
Strategic Research and Development (R&D) Issues	93	(2)
Strategy in a Changing World: A Problem of Technology Transfer at Xerox Corporation	95	(1)
Strategic Operations Issues	96	(2)
Strategic Human Resource (HRM) Issues	98	(2)
Strategic Information Systems Issues	100	(1)
The Strategic Audit: A Checklist for Organizational Analysis	100	(1)
Synthesis of Internal Factors---IFAS	101	(1)
Global Issues for the 21st Century	102	(4)
Projections for the 21st Century	103	(1)
Discussion Questions	103	(1)
Key Terms	103	(1)
Strategic Practice Exercise	104	(1)
Notes	104	(2)
Part Three STRATEGY FORMULATION
Strategy Formulation: Situation Analysis and Business Strategy	106	(26)
Situational Analysis: SWOT	107	(4)
Generating a Strategic Factors Analysis Summary (SFAS) Matrix	107	(3)
Finding a Propitious Niche	110	(1)
Review of Mission and Objectives	111	(1)
Generating Alternative Strategies Using a TOWS Matrix	111	(2)
Business Strategies	113	(16)
Porter's Competitive Strategies	113	(4)
Strategy in a Changing World: Differentiation Focus Strategy at Morgan Motor Car Company	117	(7)
Cooperative Strategies	124	(2)
Company Spotlight on Maytag Corporation: Maytag Forms a Joint Venture in China	126	(2)
21st Century Global Society: Dean Foods Finds a Joint Venture Partner in Mexico	128	(1)
Global Issues for the 21st Century	129	(3)
Projection for the 21st Century	130	(1)
Discussion Questions	130	(1)
Key Terms	130	(1)
Strategic Practice Exercise	130	(1)
Notes	131	(1)
Strategy Formulation: Corporate Strategy	132	(27)
Corporate Strategy	133	(1)
Directional Strategy	133	(14)
Growth Strategies	134	(3)
Key Theory: Transaction Cost Economics Analyzes Vertical Growth Strategy	137	(2)
Company Spotlight on Maytag Corporation: A Growth Strategy of Horizontal Growth Through Acquisitions	139	(1)
International Entry Options	140	(1)
21st Century Global Society: Daewoo Expands Its Corporate Growth Strategy Internationally	141	(1)
Controversies in Directional Growth Strategies	142	(1)
Stability Strategies	143	(1)
Retrenchment Strategies	144	(1)
Strategy in a Changing World: IBM Follows a Turnaround Strategy	145	(2)
Portfolio Analysis	147	(5)
BCG Growth-Share Matrix	147	(2)
GE Business Screen	149	(1)
International Portfolio Analysis	150	(1)
Advantages and Limitations of Portfolio Analysis	151	(1)
Corporate Parenting	152	(4)
Developing a Corporate Parenting Strategy	153	(1)
Parenting-Fit Matrix	153	(2)
Horizontal Strategy: Corporate Competitive Strategy	155	(1)
Global Issues for the 21st Century	156	(3)
Projections for the 21st Century	156	(1)
Discussion Questions	156	(1)
Key Terms	157	(1)
Strategic Practice Exercise	157	(1)
Notes	158	(1)
Strategy Formulation: Functional Strategy and Strategic Choice	159	(23)
Functional Strategy	160	(11)
Core Competencies	160	(1)
The Sourcing Decision: Where Should Functions Be Housed?	161	(1)
Marketing Strategy	162	(2)
Financial Strategy	164	(1)
Company Spotlight on Maytag Corporation: Maytag Supports Dealers as Part of Its Marketing Strategy	165	(1)
Research and Development (R&D) Strategy	165	(1)
Operations Strategy	166	(2)
21st Century Global Society: Whirlpool Adjusts Its Manufacturing Strategy to Local Conditions	168	(1)
Purchasing Strategy	168	(1)
Logistics Strategy	169	(1)
Human Resource Management (HRM) Strategy	170	(1)
Information Systems Strategy	170	(1)
Strategies to Avoid	171	(1)
Strategic Choice: Selection of the Best Strategy	171	(6)
Constructing Corporate Scenarios	172	(4)
Process of Strategic Choice	176	(1)
Strategy in a Changing World: Intel Makes a Strategic Decision	177	(1)
Development of Policies	177	(1)
Global Issues for the 21st Century	178	(4)
Projections for the 21st Century	178	(1)
Discussion Questions	179	(1)
Key Terms	179	(1)
Strategic Practice Exercise	179	(1)
Notes	180	(2)
Part Four STRATEGY IMPLEMENTATION AND CONTROL
Strategy Implementation: Organizing for Action	182	(24)
Strategy Implementation	183	(2)
Who Implements Strategy	185	(1)
What Must Be Done?	185	(1)
Developing Programs, Budgets, and Procedures	185	(1)
Achieving Synergy	186	(1)
How Is Strategy to be Implemented? Organizing for Action	186	(13)
Structure Follows Strategy	187	(1)
Stages of Corporate Development	188	(3)
Strategy in a Changing World: The Founder of the Modern Blocks the Transition to Stage II	191	(1)
Organizational Life Cycle	192	(1)
Advanced Types of Organizational Structures	192	(2)
Company Spotlight on Maytag Corporation: Initiating a Revival Phase	194	(3)
Reengineering and Strategy Implementation	197	(1)
Designing Jobs to Implement Strategy	198	(1)
Key Theory: Designing Jobs with the Job Characteristics Model	199	(1)
International Issues in Strategy Implementation	199	(4)
21st Century Global Society: The Internet: Instant Entry into the International Marketplace	201	(2)
Global Issues for the 21st Century	203	(3)
Projections for the 21st Century	203	(1)
Discussion Questions	203	(1)
Key Terms	204	(1)
Strategic Practice Exercise	204	(1)
Notes	204	(2)
Strategy Implementation: Staffing and Directing	206	(23)
Staffing	207	(7)
Staffing Follows Strategy	208	(1)
Selection and Management Development	209	(1)
Strategy in a Changing World: Ann Iverson Implements a Turnaround Strategy at Laura Ashley	210	(1)
Problems in Retrenchment	211	(1)
International Issues in Staffing	212	(2)
21st Century Global Society: General Motors Uses Chinese-Americans in Chinese Joint Venture	214	(1)
Leading	214	(9)
Managing Corporate Culture	214	(4)
Company Spotlight on Maytag Corporation: Assimilating Admiral's Culture	218	(1)
Action Planning	218	(2)
Management By Objectives	220	(1)
Total Quality Management	221	(1)
International Considerations in Leading	222	(1)
Global Issues for the 21st Century	223	(6)
21st Century Global Society: Cultural Differences Create Implementation Problems in Merger	224	(1)
Projections for the 21st Century	225	(1)
Discussion Questions	225	(1)
Key Terms	225	(1)
Strategic Practice Exercise	225	(2)
Notes	227	(2)
Evaluation and Control	229	(34)
Evaluation and Control in Strategic Management	230	(1)
Measuring Performance	231	(13)
Appropriate Measures	231	(1)
Behavior and Output Controls	231	(2)
Activity-Based Costing	233	(1)
Primary Measures of Corporate Performance	234	(4)
Evaluating Top Management	238	(1)
Primary Measures of Divisional and Functional Performance	239	(2)
International Measurement Issues	241	(1)
Strategy in a Changing World: Seitz Corporation Uses Benchmarking in Strategy Implementation	242	(1)
21st Century Global Society: European Union's Problems with Forming a Single Currency	243	(1)
Strategic Information Systems	244	(1)
Problems in Measuring Performance	245	(3)
Short-Term Orientation	245	(1)
Goal Displacement	246	(1)
Company Spotlight on Maytag Corporation: The Impact of Hoover on Maytag's Financial Performance	247	(1)
Guidelines for Proper Control	248	(1)
Strategic Incentive Management	248	(3)
Strategy in a Changing World: Southwest Airlines' Corporate Culture Makes Control Easier	249	(2)
Using the Strategic Audit to Evaluate Corporate Performance	251	(8)
Global Issues for the 21st Century	259	(4)
Projections for the 21st Century	260	(1)
Discussion Questions	260	(1)
Key Terms	260	(1)
Strategic Practice Exercise	260	(1)
Notes	261	(2)
Part Five OTHER STRATEGIC ISSUES
Strategic Issues in Managing Technology and Innovation	263	(20)
Role of Management	264	(1)
Strategy in a Changing World: Examples of Innovation Emphasis in Mission Statements	265	(1)
Environmental Scanning	265	(4)
External Scanning	265	(2)
Internal Scanning	267	(2)
Strategy Formulation	269	(4)
Product versus Process R&D	269	(1)
Technology Sourcing	269	(1)
21st Century Global Society: The Impact of R&D on Competitive Advantage in China	270	(2)
Company Spotlight on Maytag Corporation: Importance of Product and Process R&D in the Major Home Appliance Industry	272	(1)
Importance of Technological Competence	272	(1)
Product Portfolio	273	(1)
Strategy Implementation	273	(5)
Developing an Innovative Entrepreneurial Culture	273	(2)
Organizing for Innovation: Corporate Entrepreneurship	275	(1)
Strategy in a Changing World: DuPont Uses Cross-Functional Teams to Improve Innovation	276	(2)
Evaluation and Control	278	(1)
Global Issues for the 21st Century	278	(5)
Projections for the 21st Century	279	(1)
Discussion Questions	280	(1)
Key Terms	280	(1)
Strategic Practice Exercise	280	(1)
Notes	281	(2)
Strategic Issues in Entrepreneurial Ventures and Small Businesses	283	(22)
Importance of Small Business and Entrepreneurial Ventures	284	(1)
Definition of Small-Business Firms and Entrepreneurial Ventures	284	(1)
The Entrepreneur as Strategic Manager	284	(1)
Use of Strategic Planning and Strategic Management	285	(3)
Degree of Formality	286	(1)
Usefulness of Strategic Management Model	286	(1)
Usefulness of Strategic Decision-Making Process	286	(2)
Issues in Environmental Scanning and Strategy Formulation	288	(6)
Sources of Innovation	290	(1)
21st Century Global Society: Mission and Policies of The Body Shop Reflect Entrepreneur's Personal Values and Experiences	291	(2)
Factors Affecting a New Venture's Success	293	(1)
Strategy in a Changing World: Cherrill Farnsworth's Entrepreneurial Personality	294	(1)
Issues in Strategy Implementation	294	(4)
Stages of Small Business Development	295	(2)
Company Spotlight on Maytag Corporation: Impact of F.L. Maytag on Maytag Corporation	297	(1)
Transfer of Power and Wealth in Family Businesses	298	(1)
Issues in Evaluation and Control	298	(2)
Global Issues for the 21st Century	300	(5)
Projections for the 21st Century	301	(1)
Discussion Questions	301	(1)
Key Terms	301	(1)
Strategic Practice Exercise	302	(1)
Notes	303	(2)
Strategic Issues in Not-for-Profit Organizations	305	(14)
Why Not-for-Profit	306	(1)
21st Century Global Society: Aspects of Life Most Suited for Not-for-Profits	307	(1)
Importance of Revenue Source	307	(3)
Sources of Not-for-Profit Revenue	308	(1)
Patterns of Influence on Strategic Decision Making	308	(2)
Usefulness of Strategic Management Concepts and Techniques	310	(1)
Impact of Constraints on Strategic Management	310	(3)
Impact on Strategy Formulation	311	(1)
Impact on Strategy Implementation	312	(1)
Impact on Evaluation and Control	313	(1)
Popular Not-for-Profit Strategies	313	(1)
Strategic Piggybacking	313	(1)
Mergers	314	(1)
Strategic Alliances	314	(1)
Global Issues for the 21st Century	314	(5)
Strategy in a Changing World: Resources Needed for Successful Strategic Piggybacking	315	(1)
Projections for the 21st Century	316	(1)
Discussion Questions	316	(1)
Key Terms	316	(1)
Strategic Practice Exercises	316	(1)
Notes	317	(2)
Part Six INTRODUCTION TO CASE ANALYSIS
Suggestions for Case Analysis	319	(15)
The Case Method	320	(1)
Researching the Case Situation	320	(1)
Financial Analysis: A Place to Begin	320	(8)
Strategy in a Changing World: Using the World Wide Web to Obtain Information	321	(1)
Analyzing Financial Statements	322	(2)
Common-Size Statements	324	(2)
Z-Value, Index of Sustainable Growth, and Free Cash Flow	326	(1)
Strategy in a Changing World: Is Inflation Dead or Just Sleeping?	327	(1)
Useful Economic Measures	327	(1)
Format for Case Analysis: The Strategic Audit	328	(3)
21st Century Global Society: The Fastest Growing Economies in the World	329	(2)
Global Issues for the 21st Century	331	(3)
Projections for the 21st Century	332	(1)
Discussion Questions	332	(1)
Key Terms	332	(1)
Strategic Practice Exercise	333	(1)
Appendix 14.A Resources for Case Library Research	334	(2)
Appendix 14.B Suggested Case Analysis Methodology Using the Strategic Audit	336	(4)
Strategic Audit appears on pages 251--258.
Appendix 14.C Example of Student-Written Strategic Audit	340	(4)
Notes	344
Name Index	I-1
Subject Index	I-10