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CHAPTER 1 • THE NATURE OF STRATEGIC MANAGEMENT 23
excerpts from The Art of War. As you read through the table, consider which of the prin-
ciples of war apply to business strategy as companies today compete aggressively to
survive and grow.

Conclusion
All firms have a strategy, even if it is informal, unstructured, and sporadic. All organiza-
tions are heading somewhere, but unfortunately some organizations do not know where
they are going. The old saying “If you do not know where you are going, then any road
will lead you there!” accents the need for organizations to use strategic-management con-
cepts and techniques. The strategic-management process is becoming more widely used by
small firms, large companies, nonprofit institutions, governmental organizations, and
multinational conglomerates alike. The process of empowering managers and employees
has almost limitless benefits.
Organizations should take a proactive rather than a reactive approach in their
industry, and they should strive to influence, anticipate, and initiate rather than just
respond to events. The strategic-management process embodies this approach to deci-
sion making. It represents a logical, systematic, and objective approach for determin-
ing an enterprise’s future direction. The stakes are generally too high for strategists to
use intuition alone in choosing among alternative courses of action. Successful strate-
gists take the time to think about their businesses, where they are with their busi-
nesses, and what they want to be as organizations—and then they implement programs
and policies to get from where they are to where they want to be in a reasonable period
of time.
It is a known and accepted fact that people and organizations that plan ahead are much
more likely to become what they want to become than those that do not plan at all. A good
strategist plans and controls his or her plans, whereas a bad strategist never plans and then
tries to control people! This textbook is devoted to providing you with the tools necessary
to be a good strategist.

Key Terms and Concepts

Annual Objectives (p. 13) Retreats (p. 16)
Competitive Advantage (p. 9) Strategic Management (p. 6)
Empowerment (p. 17) Strategic-Management Model (p. 14)
Environmental Scanning (p. 12) Strategic-Management Process (p. 6)
External Opportunities (p. 11) Strategic Planning (p. 6)
External Threats (p. 11) Strategies (p. 13)
Internal Strengths (p. 12) Strategists (p. 10)
Internal Weaknesses (p. 12) Strategy Evaluation (p. 7)
Intuition (p. 7) Strategy Formulation (p. 6)
Long-Range Planning (p. 6) Strategy Implementation (p. 6)
Long-Term Objectives (p. 13) Sustained Competitive Advantage (p. 9)
Mission Statements (p. 11) Vision Statement (p. 11)
Policies (p. 14)

Issues for Review and Discussion

1. Distinguish between long-range planning and strategic planning.
2. Compare a company’s strategic plan with a football team’s game plan.
3. Describe the three activities that comprise strategy evaluation.