CHAPTER 1: INTRODUCING THE CONCEPTSStrategy Management in ActionBy: Mary CoulterTeam 1MGT 4380 – 003Patrick Morales, William Turner, Becky Alvarado, Christopher Mathis, Jared Stowe

Chapter 1 Contents

1.1 – Why strategic management is important

1.2 – What strategic management is1.3 – Who’s involved with strategic

management1.4 – Three important factors impacting

strategic management today

American Apparel

Founded in 1987 Largest U.S.

based clothing manufacturer

Headquarters in Los Angeles, CA

Started as strictly wholesale. Now have 260+ retail operations worldwide

Why is Strategic Management Important?

Assumption: EVERYONE in an organization plays a role in managing strategically

4 reasons strategic management is important

1. Allows you to be effective in your position and have your work valued and recognized

2. Strategic management makes a difference in how well an organization performs

- The bottom line, profits, etc.

4 reasons strategic management is important

3. Organizations face continually changing situations both externally and internally.

4. The various divisions, departments, and work activities of the company need to be coordinated and focused on achieving the organization’s goals.

Strategic Management Definitions

Strategy

Strategic Management Process

Organizational Strategies

Corporate

Competitive

Functional

American Apparel: Strategy at Work

Vertically integrated company

Controls both production and distribution of its product

Leverages art, design and technology

Strategy In Action

You must think of how a strategy is to be implemented while it is being formulated

If the strategy doesn’t meet specific goals or expectations it isn’t effective

Strategic management usually deals with adjustments to current strategies already in place

Strategic Management’s Past Rooted in the historical decision’s made by

leaders of military organizations

Figuring out what your opponent is doing and taking actions based on that information

Literature from the 1960’s created modern views and the academic discipline of Strategic Management

American Apparel: Environmental Strategy

Low-impact dyeing Reduces 70% of

chemical waste Cleaner Cotton

Campaign Buys cotton from

farmers who use reduce chemical use in cultivation

Renewable Energy 15% of power at the

manufacturing plant is drawn from solar panels

Who’s Involved in Strategic Management?

People in all organizational levels play a role in developing, implementing, and changing strategy. The difference lies with the scope of each individual’s strategic actions

For example, the bank teller is more concerned with functional strategies while the Vice-President of commercial loans is more concerned with corporate strategies

Who’s Involved in Strategic Management?

Three main groups playing key roles in the strategic management process:

Board of Directors Top Managers Other managers and

organizational employees

Strategy at the Top

The board of directors is an elected group that represents a company’s shareholders

It is empowered to act on the shareholders’ behalf in overseeing the management of the company and plays a significant role in corporate governance

Initiates strategies and oversees implementation

Strategy at the Top

An organization’s top manager is typically the chief executive officer (CEO)

Traditionally, the role of the CEO is that of a chief strategist, structural architect, and visionary leader

Strategic leadership is a common quality among top CEO’s

Managers and Strategy

Managers and employees in other levels of the organization are primarily tasked with implementation

Top managers create the vision and middle managers put the strategies into action

They are in the best position to evaluate whether the strategies are effective, providing valuable input.

American Apparel: Corporate Structure

American Apparel is a publicly traded company that is governed by a board of directors, top managers, and lower-level managers

Every organizational level has some degree of influence on the overall strategy

They differ in that they have a strong sense of corporate responsibility

Globalization and The Global Economy

Challenges and advantages to doing global business

Organizations to promote international business

American Apparel’s international business

Corporate Governance

The Sarbanes-Oxley Act

Role of the Board of Directors

Financial Reporting

E-Business

What is E-commerce?

E-Business Strategies E-Business Enhanced Organization E-Business Enabled Organization Total E-Business Organization

American Apparel: E-commerce website

Conclusion

No matter where you are in an organization, you will need to be apart of strategic management - Understanding the process and planning is

critical to success