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Strategic management and business policy

I TWELFTH EDITION Business Policy Thomas L. Wheelen Formerly with University of Virginia Trinity College, Dublin Ireland J. David Hunger Iowa State University St. John’s University 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 Preface 29 PART ONE CHAPTER 1 Introduction to Strategic Management and Business Policy Basic Concepts of Strategic Management 50 1. The Study of Strategic Management Phases of Strategic Management Benefits of Strategic Management 53 54 53 49 1. 2 Globalization and Environmental Sustainability: Challenges to Strategic Management 55 Impact of Globalization 56 56 57 60 Impact of Environmental Sustainability Global Issue: REGIONAL TRADE ASSOCIATIONS REPLACE NATIONAL TRADE BARRIERS Environmental Sustainability Issue: PROJECTED EFFECTS OF CLIMATE CHANGE 1. 3 Theories of Organizational Adaptation 1. 4 Creating a Learning Organization 61 60 1. 5 Basic Model of Strategic Management Environmental Scanning Strategy Formulation 65 64 2 Strategy Highlight 1. 1: DO YOU HAVE A GOOD MISSION STATEMENT? 66 Strategy Implementation Evaluation and Control 69 70 71 71 72 Feedback/Learning Process 1. 6 Initiation of Strategy: Triggering Events 1. 7 Strategic Decision Making 73 73 Strategy Highlight 1. 2: TRIGGERING EVENT AT UNILEVER What Makes a Decision Strategic Mintzberg’s Modes of Strategic Decision Making 73 75 76 Strategic Decision-Making Process: Aid to Better Decisions 1. 8 The Strategic Audit: Aid to Strategic Decision-Making 1. 9 End of Chapter Summary 77 82

APPENDIX 1. A Strategic Audit of a Corporation CONTENTS CHAPTER 2 Corporate Governance 90 93 93 96 2. 1 Role of the Board of Directors Responsibilities of the Board Members of a Board of Directors Strategy Highlight 2. 1: AGENCY THEORY VERSUS STEWARDSHIP THEORY IN CORPORATE GOVERNANCE 98 Nomination and Election of Board Members Organization of the Board 102 101 Impact of the Sarbanes-Oxley Act on U. S. Corporate Governance 103 104 Global Issue: CORPORATE GOVERNANCE IMPROVEMENTS THROUGHOUT THE WORLD Trends in Corporate Governance 2. The Role of Top Management 105 106 Responsibilities of Top Management 106 Environmental Sustainability Issue: CONFLICT AT THE BODY SHOP 107 2. 3 End of Chapter Summary CHAPTER 3 110 118 120 – Social Responsibility and Ethics in Strategic Management 3. 1 Social Responsibilities of Strategic Decision Makers Responsibilities of a Business Firm 120 123 Sustainability: More Than Environmental? Corporate Stakeholders 123 Environmental Sustainability issue: THE DOW JONES SUSTAINABILITY INDEX 124 Strategy Highlight 3. 1: JOHNSON & JOHNSON CREDO 126 3. Ethical Decision Making 127 127 Some Reasons for Unethical Behavior Strategy Highlight 3. 2: UNETHICAL PRACTICES AT ENRON AND WORLDCOM EXPOSED BY “ WHISTLE-BLOWERS” 128 Global Issue: HOW RULE-BASED AND RELATIONSHIP-BASED GOVERNANCE SYSTEMS AFFECT ETHICAL BEHAVIOR 129 Encouraging Ethical Behavior 3. 3 End of Chapter Summary 134 131 Ending Case for Part One: BLOOD BANANAS 138 PARTJWO____Scanning_the Environment CHAPTER 4 141 142 146 Environmental Scanning and Industry Analysis 4. 1 Environmental Scanning 146 Identifying External Environmental Variables

CONTENTS ||||||| v% Environmental Sustainability Issue: MEASURING AND SHRINKING YOUR PERSONAL CARBON FOOTPRINT 148 Global Issue: IDENTIFYING POTENTIAL MARKETS IN DEVELOPING NATIONS Identifying External Strategic Factors 156 155 4. 2 Industry Analysis: Analyzing the Task Environment Porter’s Approach to Industry Analysis Industry Evolution 162 162 158 157 Categorizing International Industries International Risk Assessment Strategic Groups Strategic Types Hypercompetition 163 165 165 163 Using Key Success Factors to Create an Industry Matrix 4. Competitive Intelligence 168 169 170 166 166 Strategy Highlight 4. 1: MICROSOFT IN A HYPERCOMPETITIVE INDUSTRY Sources of Competitive Intelligence Strategy Highlight 4. 2: EVALUATING COMPETITIVE INTELLIGENCE 170 Monitoring Competitors for Strategic Planning 4. 4 Forecasting 171 171 172 173 Danger of Assumptions Useful Forecasting Techniques 4. 5 The Strategic Audit: A Checklist for Environmental Scanning 4. 6 Synthesis of External Factors—EFAS 4. 7 End of Chapter Summary 175 181 APPENDIX 4. A Competitive Analysis Techniques 174

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