Fifth Edition ESSENTIALS OF STRATEGIC MANAGEMENT INTERNATIONAL EDITION J. David Hunger Saint John's University Iowa State University Thomas L. Wheelen Formerly with University of Virginia Trinity College, Dublin, Ireland Prentice Hall Boston Columbus Indianapolis New York San Francisco, Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
CONTENTS Preface 13 Part I Introduction to Strategic Management 17 Chapter 1 Basic Concepts of Strategic Management 17 1.1 The Study of Strategic Management 18 1.2 Initiation of Strategy: Triggering Events 20 1.3 Basic Model of Strategic Management 21 1.4 Strategic Decision Making 27 Discussion Questions 30 Key Terms 30 Notes 31 Chapter 2 Corporate Governance and Social Responsibility 32 2.1 Corporate Governance: Role of the Board of Directors 33 2.2 Corporate Governance: Role of Top Management 39 2.3 Social Responsibilities and Ethics in Strategic Decision Making Discussion Questions 44 Key Terms 45 Notes 45 40 Part II Scanning the Environment 46 Chapter 3 Environmental Scanning and Industry Analysis 3.1 Environmental Scanning 47 3.2 3.3 3.4 3.5 Industry Analysis: Analyzing the Task Environment 53 Competitive Intelligence 62 Forecasting 63 Synthesis of External Factors EFAS 64 Discussion Questions 66 Key Terms 66 Notes 67 Chapter 4 Internal Scanning: Organizational Analysis 4.1 Resource-Based View of the Firm 68 4.2 Business Models 71 4.3 Value-Chain Analysis 72 4.4 Scanning Internal Resources and Capabilities 73 4.5 Synthesis of Internal Factors IFAS 85 Discussion Questions 86 Key Terms 87 Notes 87 68 46
10 Contents Part III Strategy Formulation 88 Chapter 5 Strategy Formulation: Situation Analysis and Business Strategy 88 5.1 Situational (SWOT) Analysis 88 5.2 Review of Mission and Objectives 92 5.3 Generating Alternative Strategies Using a TOWS Matrix 93 5.4 Business Strategies 94 Discussion Questions 103 Key Terms 103 Notes 104 Chapter 6 Strategy Formulation: Corporate Strategy 105 6.1 Corporate Strategy 106 6.2 Directional Strategy 106 6.3 Portfolio Analysis 113 6.4 Corporate Parenting 118 Discussion Questions 120 Key Terms 120 Notes 120 Chapter 7 Strategy Formulation: Functional Strategy and Strategic Choice 121 7.1 Functional Strategy 122 7.2 The Sourcing Decision: Location of Functions and Capabilities 126 7.3 Strategies to Avoid 127 7.4 Strategic Choice: Selection of the Best Strategy 127 7.5 Development of Policies 133 Discussion Questions 133 Key Terms 133 Notes 134 Part IV Strategy Implementation and Control 135 Chapter 8 Strategy Implementation: Organizing for Action 8.1 What Is Strategy Implementation? 136 8.2 Who Implements Strategy? 136 8.3 8.4 8.5 What Must Be Done? 136 How Is Strategy to be Implemented? Organizing for Action 137 International Issues in Strategy Implementation 147 Discussion Questions 148 Key Terms 148 Notes Chapter 9 Strategy Implementation: Staffing and Leading 150 9.1 Staffing 151 9.2 Leading 155 Discussion Questions 161 Key Terms 162 Notes 162 135 148
Chapter 10 Evaluation and Control 163 10.1 Evaluation and Control in Strategic Management 164 10.2 Measuring Performance 165 10.3 Strategic Information Systems 172 10.4 Guidelines for Proper Control 173 Contents 11 10.5 Strategic Incentive Management 173 Discussion Questions 175 Key Terms 176 Notes 176 PartV Introduction to Case Analysis 177 Chapter 11 Suggestions for Case Analysis 177 11.1 The Case Method 177 11.2 Frameworks for Case Analysis 177 11.3 Researching the Case Situation 178 11.4 Financial Analysis: A Place to Begin 178 11.5 Using the Strategic Audit in Case Analysis 184 Discussion Questions 184 Key Terms 185 Notes 185 Appendix 11.A Suggested Techniques for Case Analysis and Presentation 186 A. Case Analysis 186 B. Written Report 187 C. Oral Presentation by Teams 187 Appendix 11.B Resources for Case Research 189 A. Company Information 189 B. Economic Information 189 C. Industry Information 189 D. Directory and Index Information on Companies and Industries 190 E. Ratio Analysis Information 190 F. Online Information 190 Appendix 11.C Strategic Audit of a Corporation 192 I. Current Situation 192 11. Corporate Governance 192 III. External Environment: Opportunities and Threats 193 IV. Internal Environment: Strengths and Weaknesses 194
12 Contents V. Analysis of Strategic Factors (SWOT) 199 VI. Strategic Alternatives and Recommended Strategy 199 VII. Implementation 200 VIII. Evaluation and Control 200 Index 201