MAN4720 MDC Lesson 1 MOD1 CH4 Nature of Strategic Management Report What new insight this you gain after completing this module? What were the most importa

MAN4720 MDC Lesson 1 MOD1 CH4 Nature of Strategic Management Report What new insight this you gain after completing this module?
What were the most important lessons learned in this module?
What was the most difficult point or concept in this lesson?
How will you apply the lessons learned in this module in your professional life?
MODULE 1 (LESSON 1 LESSON 2 LESSON 3 AND LESSON 4)

Lesson 1 – The Nature of Strategic Management

Have you ever played football or soccer? No? OK, how about dodgeball? Dominoes? Chess? Come on ….. Monopoly? If you have played any of these games you should know how important having a good game plan is to your success or to the success of any athletic team. Well, having a good game plan is just as important to a business. If a business is to succeed it must have a game plan, i.e., a strategic plan. A good strategic plan must be based on factual, specific, underlying key internal and external factors, not vague pieces of information. Similarly, as you complete case analyses throughout this course, your responses should not be based on opinion, general statements or intuition, but facts (you will learn more about these facts as you go through this course). As Demining said, “In God We Trust, All Others Bring the Data”.

This chapter provides an overview of strategic management. This chapter introduces the basic terms in strategic management and presents the comprehensive model for strategic planning that appears in each subsequent chapter. The chapter provides a unifying, logical flow for the entire textbook. The benefits of doing strategic planning, the drawbacks of not doing strategic planning, and the pitfalls of doing strategic planning incorrectly are also described.

Lesson 2 – The Business Vision and Mission

Chapter 2 describes the nature and role of vision and mission statements in strategic planning and provides specific guidelines on how to develop these statements. Both characteristics and components that should be included in these statements are provided, as are numerous examples. In this course, you should become proficient at devising and improving vision and mission statement documents, and this chapter provides the foundation for that knowledge. Everything a company or organization does should be vision and mission-driven, so the language in these statements is vitally important – the statements are not just “feel good” platitudes.

Lesson 3 – External Assessment

Chapter 3

This chapter describes how to perform an external strategic-management audit, including what variables to access, where to find information, how to assimilate external information so that it may provide a foundation for formulating strategies. Chapter 3 also details how to develop a Competitive Profile Matrix and an External Factor Evaluation (EFE) Matrix , two widely utilized strategic planning tools. You will learn about special, free sources of external strategic information on the Internet.

It is vital for companies and organizations to identify and prioritize the relative importance of key external opportunities and threats facing the firm, so the firm can deploy assets/resources to exploit the opportunities and avoid or mitigate the threats. Survival of the firm can hinge on this part of strategic planning being done well, so Chapter 3 is very important. This part of strategic planning requires that an engineering hunt for the facts be conducted, to avoid a strategic plan being based on vague generalities, which is detrimental both to companies and students performing case analysis.

Lesson 4 – The Internal Assessment

Chapter 4

This chapter explains how to conduct an internal strategic management audit to provide an excellent foundation for formulating strategies. Key aspects of the basic business functions (management, marketing, finance, production/operations, R&D, and MIS) are reviewed along with value chain analysis, benchmarking, breakeven analysis, and cost/benefit analysis. This chapter reveals how to identify and prioritize internal strengths and weaknesses that provide a basis for strategies formulated. Chapter 4 explains how to develop an Internal Factor Evaluation (IFE) Matrix, an important strategic planning tool.

It is vital for companies and organizations to identify and prioritize the relative importance of key internal strengths and weaknesses that characterize the firm, so the firm can deploy assets/resources to capitalize on the strengths and improve upon the threats. Survival of the firm can hinge on this part of strategic planning being done well, so Chapter 4 is very important.

This part of strategic planning requires concrete facts. Remember, a strategic plan cannot be based on vague generalities. This is detrimental both to companies and students performing case analysis. Asset Page Steps in the Risk Management Process
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Steps in the Risk Management Process
Read It
What are the major steps in the risk management process and how do they
interconnect within the project management lifecycle?
The steps for proper risk management are both 7exible and useful to project managers. Operation
order is critical as it allows for a systematic approach to risk management.
Step 1: Risk Identi=cation
Risk IdentiBcations looks at events and/or actions that, when triggered, cause project problems.
Risk effects every phase so it is wise to look at each one in depth. Control (either phase or function
to project management) is also open to risk.
Two areas to look at when identifying risk include:
Source Analysis: Identifying risk by internal or external sources.
Problem Analysis: Identifying risk by speciBc actions, concepts, or threats.
Risk identiBcation is challenging due to differing projects. Using lessons learned along with best
practices, allows project managers to make a list of reasonable and expected risks within any given
project.
Step 2: Risk Assessment
Assessing risks takes identiBed risks and ranking their level of affect. This requires a top down
review of risks and their place in the project management life cycle. Many risks effect more than
one phase and a cascading effect is normal. Unattended risk in one phase will cause continued
(and larger) problems later on in the project. Assessing risks must also look beyond the project.
After close out, unaddressed risks can cause continual problems. Upon a project audit, looking at
how the risks were managed can assess failure.
Risk assessment gets as detailed as the requirements of the project. Depending on the number of
risks, project managers cross-reference these risks to one another, creating a risk management
plan. This addresses identiBed risks, severity, assigned solutions (including back up plans), required
resources, and a communication plan.
No plan covers all known risks. Everyone involved in a project should understand risk is inherent to
the process. What a risk management plan does is show [a] risk is considered and planned for, and
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Asset Page Steps in the Risk Management Process
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[b] risk management exists to avoid project delays that might occur if it was not.
Step 3: Risk Management
Risk management implements not just when a risk occurs but also as a precursor to avoiding risks.
This may seem obvious but several considerations are made when implementing risk management.
First, not every risk may occur. Assigning resources to risks that never happen may seem like
useless management. However, it is a case of better safe than sorry. Project managers brief
stakeholders that lack of risk management is detrimental to project success.
Second, risk management must be 7exible. Even identiBed risks rarely play out as expected. Risk
management cannot be so strict that solutions are short sided and only Bx part of the risk (or
worse, creating more risk). Allocated resources must handle the risk as it appears. In project
management, no problem has a single solution.
Finally, risk management moves forward with the big picture in mind. Risks are speciBc situations
but they interconnect with the project’s vision, goals, and implementations. Risk management might
solve a single problem, but when actually implementing, project managers and personnel must
understand that Bxing a single risk does not come at the expense of the entire project.
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Benefits of Risk Management
What are the main benefits of risk management?
Risk management should create value to the project by being a foundational
part of the project management life cycle. Along with a charter, communication
plan, and other important documents, a risk management plan showcases that
it is handling its responsibilities focused on project success.
Because it requires special resources, risk management benefits projects by
being part of executive management process. Having stakeholders know
the why, what, where, when, and how of project risks lets them know what to
expect and manage accordingly. Honest and explicit risk management provides
great value. Project managers should never shy away from addressing risk. It
is better to plan for it than to have emergencies that stop a project dead in its
tracks. Honesty in risk discussions benefits every project.
Risk management is the closest thing to predicting unknowns. While not every
risk is predictable, risk management sets a mentality. This lets all know risk is
acknowledged and addressed. Sometimes having a good plan puts high-level
stakeholders at ease.
Risk management is able to consider human behaviors. Emotions run high on
projects. Risk management acknowledges these and sets trust and
communication. Nothing kills projects more than negative morale. Risk
management’s benefit is that it can help ease these concerns. By being
dynamic and transparent, risk management can help any project in its
implementations and eventual success.
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Impact of Not Managing Risk
What is the impact of not managing risk?
Without a plan, failure (or the very least limited implementation) is the only
logical result. Risk management is critical because it focuses on project
variables that cause maximum damage. With scheduling, resources, and scope,
accommodations can be managed.
Risk poses different challenges because it is unpredictable. For stakeholders,
this means forgoing any risk management, a decision with numerous
consequences, all generally negative. It is not a matter of addressing impact
when risk lacks management. It is a matter of putting the entire project, its
goals, resources, and stakeholders, at the greatest risk, failure.
To ignore risk management places the project into uncertainty. Project
managers take projects from planning to inception to closure. Conversely, if
organizations will be different and lacking risk management, results will most
likely be negative. Not managing risk negatively impacts any project.
Resource limitations should never justify not using risk management. Because
risks may or may not occur, risk avoidance moves management to something
more tangible. This is incorrect because without resources, occurring risks very
quickly move beyond scope creep, sometimes becoming showstoppers.
Considering process, benefits, and importance, a lack of risk management
highlights serious misunderstandings. Risk management mirrors overall project
depth. Wasted resources come from a lack of risk management. Project
managers cannot plan all risks, but without a plan they are at an immediate
disadvantage. Successful project managers understand risk is a part of projects
and requires planning and management to create success completion.
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Importance of Conducting Risk Management
What do many see as the importance of conducting proper risk management?
The important elements differ from project to project, but the underlying
value should be focused on project success. Anything else makes risk
management worthless and sometimes negative to project management.
Another importance risk management has less technical, focuses on
psychological aspects of project management. Project management concerns
itself with change, a difficult concept for organizations to grasp. Risk
management acknowledging this. Some general ideas include the following:
Risk avoidance: This occurs when nothing happens that is caused by
the risks inherent to the actions the project wishes to implement. Risk
management acknowledges risks and sets steps to negotiate
applicable solutions.
Risk reduction: The importance comes from the planning. By
optimizing resources, risk management effectively plans for
unknowns. While not foolproof, reducing risk is important to project
success.
Risk sharing: Another important behavior, sharing risks lessens their
effects. Setting up a sharing plan allows lower risks and the
engagement of all participants. Sharing is not the same as
transferring. Whereas sharing is cooperation, transferring is a move.
Risk retention: This is also known as risk acceptance, or at the very
least, the acceptance that risk exists and needs management. This
focuses on procedures and techniques enabling project managers to
properly manage risk.
It is important for project managers to handle technical aspects. Risk
management’s importance comes from looking into human factors. By
addressing avoidance, reduction, sharing, and retention, project managers
can show risk management as important and vital to the project’s success.
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Introduction to Risk and Risk Management
Defining Risk
Defining risk is difficult because numerous project differences change the
meaning of the term. This comes from the changing nature of both risk and
project management. Risk considerations must be made for persons, groups,
and organizations. Add outside influences such as financial and information
technology, and suddenly risk is an even broader expression.
Triple Constraint
In general, risk focuses on uncertainty, including scope, resources, and
schedule, or what is known as the triple constraint. For project management,
risk must start with the triple constraint. The triple constraint provides
boundaries even when it is acknowledged that risk takes on multiple facets
within project management.
Scope Creep
Because of strong urges of avoidance (if not outright denial), risk tends to go
unnoticed until palpable problems occur. Risk becomes the main driver for
scope creep, or the deviation from a project’s objectives. There are multiple
examples of project failure because of the mismanagement of risk. For
project managers, this scheme is unacceptable. Not acknowledging risk sets
one up for failure.
Managing Risk
Interesting enough, in project management, risk is inherent to the process.
The very nature of project management is to change the status quo of the
organization. This is risk. As technology and the global market trend forward,
risk becomes part of every operation.
The solution is risk management. Unlike other aspects of project
management, risk management contends with concepts that will never be
fully known. It is impossible to predict all risks, but to not attempt to plan for
major identifiable risks is inconceivable.
Risk management looks at identifying, assessing, and prioritizing risks. It sets
up plans to implement solutions mediating the effects of risks. This includes
monitoring the risks, minimizing their effect on project tasks, and (in bestcase scenarios) controlling the probability of risk occurring. The latter is a
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Introduction to Risk and Risk Management
best-case solution and is rarely successful.
Goal of Risk Management
The goal of risk management is to manage the impact of risk in project
management. This acknowledges risk’s existence and looks at the different
sources of risk, such as financial, legal, and natural areas. It is important for
project managers to understand that risk is an everyday part of project
management.
Standards of Risk Management
Even with the vagueness of defining risk, risk management standards do
exist. Several organizations that deal with project management as a discipline
tend to agree on the importance of risk management, its utilization, and
benefits. Differences come from the variety of risks, management styles,
technologies, and industries.
In Conclusion
In conclusion, risk management presents a special challenge to project
managers. They are expected to manage something they can never fully
understand. By contesting risk, they set themselves up for failure. This
balance tests any manager’s knowledge, skills, and abilities. By utilizing
sound techniques and process, risk management is not only feasible, but a
positive and vital part of any project’s success.
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