Strategic Management Process

STRATEGIC MANAGEMENT 7

StrategicManagement Process

Thestrategic management process entails defining the organization`sstrategy. It explicates the process by which managers make a choiceof a set of strategies for the firm that will create a path for it toattain better results (Hill &amp Jones, 2010). SM is a continuousprocess that evaluates the business environment and industries inwhich the firm operates, appraising competitors and formulating goalsto have an edge on all current and future competitors andre-evaluating the strategy to keep pace with changing circumstances(Hill &amp Jones, 2010). SMP encompasses more than just a set ofrules that the organization ought to follow. It is a theoreticalapproach to business. The top executives must think strategically andthen apply that thought to a process. The upper management must makedeliberate efforts to see o it that everyone in the organizationunderstands the strategy so that it is easier to implement (Hill &ampJones, 2010). The five main stages of the SMP are goal setting,analysis, strategy formulation, strategy execution and resultevaluation.

StrategicManagement Process

Goal-Setting

Themain aim of goal setting is to clarify the mission and vision of theorganization. The goal setting stage entails identifying three mainaspects: identifying and defining both long term and short termobjectives, identifying the process of how the stated objectivesshall be accomplished and designating tasks to staff members based ontheir skills and competence. The goals should be detailed, pragmaticand match with the values of the vision. The last step in this phaseis to write the mission statement that clearly communicates theorganizations goals to the workforce and the shareholders (Hill &ampJones, 2010).

Analysisof Internal and External Environment

Thisis one of the most important stages of the strategic managementprocess because the information acquired in this phase will shape thenext two stages. An immense amount of data and information isgathered to help attain the organizations vision (Hill &amp Jones,2010. The analysis is done to understand the needs of theorganization, establishing initiatives hat will support the growth ofbusiness, and identifying strategic direction. The internal andexternal aspects are examined thoroughly to make sure the strengthsand weakness of the business are identified as well as theopportunities and threats.

Environmentalscanning forms a key element of the analysis stage. The managementcan know what is happening in the industry, what the economics lookslike, what the competitors are doing and any other issue thatconstitute the business environment. Environmental scanning is madeup of a number of facets that assist the firm or management tounderstand what is happening in the real world (Hill &amp Jones,2010). Normally, environmental scanning encompasses areas such as

Politicalfactors

  • Political stability

  • Taxation policy

  • Unemployment policy

Economicalfactors

  • Purchasing power of consumers

  • Inflation

  • Disposal income standards

  • Stability of domestic currency

  • Exchange rates

Technologicalfactors

  • Social media

  • Internet

  • Electronic commerce

Legalfactors

  • Unemployment regulations

  • Health

  • Taxes

  • Product safety

Socio-culturalfactors

  • Income levels

  • Demographics

  • Education levels

Environmentalfactors

  • Pollution control

  • Competitive advantage

  • Waste disposal

Environmentalscanning helps the management research particular areas of businessworld to understand the current operating environment and what islikely to happen in future (Hill &amp Jones, 2010).

StrategyFormulation

Thisstage entails assembling a strategy. All the data and informationgathered in the analysis stage are used to assemble a strategy thatwill give direction on the course of action. The resources that theorganization possesses are evaluated to determine how theorganization will attain the defined goals and objectives.Alternative approaches that can help the organization attain thetarget set are formulated. It is important to note that the approachused is shaped by the knowledge acquired after scanning the businessenvironment (Hill &amp Jones, 2010).

StrategyImplementation

Thisis the stage where the strategies formulated are put into action. The top management is supposed to communicate the strategies to theemployee so that they can execute business activities that will yielddesired results (Hill &amp Jones, 2010). Implementing strategiesentails setting up a framework for execution, establishing businessethics, business structures, culture and setting up control andmonitoring programs to correct mistakes. The following are some ofthe key steps in the implementation stage:

  • Implementation framework: the upper managers convert strategies into actionable outcomes.

  • Ethics: practices that are accepted and not acceptable in the organizational are developed. They are also communicated to everyone in the firm to attain positive outcomes.

  • Structure: To be in a position to act on the strategies the workforce must understand their roles in the firm and how they all interconnect.

  • Culture: attitudes and values of the firm, how employees interact with one another and the way in which tasks are completed. The organizational culture must be considered when executing strategies

  • Controls: evaluating the strategies executed and monitoring performance. In case there are problems, alteration or improvements are made.

Inaddition any resource for the business should be secured at thisjuncture, and once everything is in place and the workforce is ready,the plan should be executed (Hill &amp Jones, 2010).

Evaluation

Inthis stage, the performance is measured and external, and internalissues are monitored to establish whether the plan is working. Ifthere the desire outcomes are not attained, corrective measures areundertaken. This process begins by defining the parameters to be usedin the measuring the outcomes. If it is established that the strategyis not yielding the desired results, and any action is notsuccessful, then the whole process is repeated (Hill &amp Jones,2010).

References

Hill,C. W. L., &amp Jones, G. R. (2010). Strategicmanagement theory: An integrated approach.Boston, MA: Houghton Mifflin.