The Internal-External (IE) Matrix positions an organization’s various divisions in a nine cell matrix. The IE Matrix is a strategic management tool which is used to analyze the current position of the divisions and suggest the strategies for the future. The Internal-External (IE) Matrix is based on an analysis of internal and external business factors which are combined into one suggestive model. The IE matrix is a continuation of the EFE matrix and IFE matrix models. The Internal-External (IE) Matrix is based on two key dimensions: the IFE total weighted scores on the x €‘axis and the EFE total weighted scores on the y axis. Recall that each division of an organization should construct an IFE Matrix and an EFE Matrix for its part of the organization. The total weighted scores derived from the divisions allow construction of the corporate-level IE Matrix. On the x €‘axis of the IE Matrix, an Continue reading
Strategic Management
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.
Relationship between Strategic Management and Leadership
Strategic Management is defined as the process by which organization’s objectives are set, policies are developed and plans are laid out to achieve these objectives. This requires the management to allocate resources to implement the plans. Essentially, this refers to the top echelon of management in an organization which strives to provide the overall direction of the whole enterprise to achieve their set targets and goals. These responsibilities are usually performed by their Chief Executive Officer (CEO) and the executive team, guided by organizational mission and vision statements. The strategic management is the on-going process that can be broken down into several stages. First and foremost, a plan (strategy formulation) is established whereby the functions or purpose of an organization is identified. This helps to shape and implement the broad objectives of the organization. It involves identifying the companies’ strategic advantages and core competencies, whether to focus customer service, gross Continue reading
Business Strategy: The Three Generic Strategies
Three of the most widely read books on competitive analysis in the 1980s were Michael Porter’s Competitive Strategy, Competitive Advantage, and Competitive Advantage of Nations. In his various books, Porter developed three generic strategies that, he argues, can be used singly or in combination to create a defendable position and to outperform competitors, whether they are within an industry or across nations. The strategies are (1) overall cost leadership, (2) differentiation, and (3) focus on a particular market niche. Cost Leadership, Differentiation, and Scope These strategies are termed generic because they can be applied to any size or form of business. We refer to them as trade-off strategies because Porter argues that a firm must choose to embrace one strategy or risk not having a strategy at all. Overall lower cost or cost leadership overall cost-leadership strategy, a strategy in which an organization attempts to gain a competitive advantage by Continue reading
What Is a Chief Learning Officer (CLO)?
A Chief Learning Officer’s main job is to grow an organization by developing a process of learning. This role continues to change, morph, and evolve as things change such as the overall econonmy, increase in globalization, and growth of technology. This evolution requires organizations to learn faster or face the reality of not being able to survive. Companies that implement ongoing learning objectives are able to reinvent themselves and adapt to change proactively, while stagnant organizations are often reactive in strategy and are unable to catch up or adjust to the changing environment. Learning needs to happen quickly, affordable, and clearly in order for a company to get a competitive advantage over others. Companies need to be able to learn from success and failures in order to manage change and turn these oppurtunities into improvement. Some common themes of learning companies include knowledge or data being continuously transferred, stored, and Continue reading
Greiner’s Model of Organizational Growth – Phases of Organizational Growth and Crisis
All organizations pass through various stages of growth and at each stage the organization is required to solve some specific problems. A very useful model of organizational growth has been developed by Larry E. Greiner. In his 1998 Harvard Business Review article entitled “Evolution and Revolution as Organizations Grow,” Greiner outlined five phases of growth punctuated by what he termed “revolutions” that shook up the status quo and ushered in the successive stage. Greiner’s Model of organizational growth is based on certain assumptions about the organization which are as under: First assumption is organisations are rigid, bureaucratic, control-centric, and centralized entities. Second, organisations fail to see that the future success of an organisation lie within their own organisation, and also fail to assess their evolving states of development. Therefore inability of a management to understand its organisation development problems can result in organisation becoming frozen in its present stage of Continue reading
Role of Social Responsibility in Managing Stakeholder Relationships
Why do companies feel social responsibility is so important in running a business? Social responsibility is defined as volunteering to manage the company’s operations and what they do with stakeholders to have a good impact on the community where the company works. Companies have many responsibilities and one of them is helping out the community to show that the company cares about other things besides making a great profit. Social responsibility increases company’s reputations and makes the company look good, and these companies get rewarded with customer satisfaction. If these companies show poor social responsibility it can ruin revenue and stakeholders may go to another company. Social responsibility is very important because it shows that companies can treat customers, employees and investors fairly. One example of social responsibility is when a car manufacturer doesn’t put a stop on a bad product. First the car manufacturer claimed that it was not Continue reading