Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that
will enable an organization to achieve its objectives. (Wikipedia, 2007). The process of Strategic Management involves deciding
upon and determining the organization’s objective, careful and planned development of policies and designs in order
to achieve these objectives and distribution of resources in order to implement these plans and policies in an attempt to
achieve the outlined objectives. Strategic Management is closely related to Organization studies and is by far the highest
level of managerial activity. The Board of Directors formulates the Strategic Management and the organization’s chief
executive officer (CEO) and the executive team is required to perform.
“Strategic management is an ongoing process that assesses the business and the industries
in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential
competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented
and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors,
a new economic environment., or a new social, financial, or political environment.” (Wikipedia, 2007).
Strategic Management involves three main processes explained below:
Strategy Formulation
Strategy formulation includes performing a situation analysis, self-assessment as well as competitor
analysis. Simultaneously, objectives are specified which further includes long-term views, corporate objectives (financial
and strategic), tactical objectives and the role of the particular organization in society.
Strategic Implementation
This process involves distribution of resources (financial, personnel, time, and technology support).
The next step involves assigning tasks or responsibilities to specific individuals or groups and thereafter, monitoring the
progress and results. Careful assessment of the process, controlling for variances and making the required adjustments form
vital components of this process.
Strategy Evaluation
As the term suggests, this process includes evaluation of the efficacy of the organizational strategy
implemented.
Therefore, successful strategic management must include clearly defined objectives, careful assessment
of both the internal and external situation to formulate the strategy, implementing the strategy and making the required adjustments
as and when required.
The company must possess a clear vision of its long term plans or a clear business vision. This
also includes assessing the financial and strategic objectives. “Financial objectives involve measures such as sales
targets and earnings growth. Strategic objectives are related to the firm's business position, and may include measures such
as market share and reputation”. (quickmba, 2007). The Environmental scan includes the following elements: Internal
analysis of the firm, Analysis of the firm's industry (task environment) and External macro environment (PEST analysis).
After deriving and inferring the information from the environmental scan the company should be able
to carefully identify and address its weaknesses and external threats and evaluate its strengths. A competitive edge in the
market in the market can be based on cost or differentiation.
The stage of implementation essentially involves distribution and organization of the company’s
resources and staff motivation to achieve the set objectives or goals.
Evaluation and control includes monitoring the strategy and fine-tuning it as required.
References
QuickMBA (2007) “The Strategic Planning Process”
Available from: http://www.quickmba.com/strategy/ strategic-planning/
Accessed: 10/25/2007
Wikipedia: The Free Encyclopedia (2007) “Strategic
Management”
Available from: http://en.wikipedia.org/wiki/ Strategic_management
Accessed: 10/25/2007.
