Mgt 498 - Strategic Management Process

Strategic Management Process

Student

July 4, 2011

MGT498

Instructor

Strategic Management Process

Strategic management is necessary for an organization to become profitable and remain successful in the long term as managerial decisions and actions direct the performance of a company. The strategic management process is responsible for carrying out the functions of developing and monitoring goals and objectives, creating time tables for implementation and completion of stated goals, and providing clear, concise direction to employees.

Strategic Management Process Components

The process components of strategic management consist of four basic elements: environmental scanning, strategy formulation, strategy implementation, and evaluation and control (Wheelen & Hunger, 2010). A SWOT analysis, reviewing internal strengths and weaknesses and external opportunities and threats, is the simplest way to conduct environmental scanning. Environmental variables include the internal environment, the industry environment, and the societal environment (Wheelen & Hunger, 2010). Developing long-term plans "includes defining the corporate mission, specifying achievable objectives, developing strategies, and setting policy guidelines (Wheelen & Hunger, 2010, p. 17). A company's mission statement defines in the simplest terms what the company's purpose is; objectives state what is to be accomplished and when; strategies advise how the objectives will be achieved and include corporate, business, and functional strategies; and policy guidelines assist employees when making decisions or taking actions "that support the corporation's mission, objectives, and strategies" (Wheelen & Hunger, 2010, p. 21).

Strategy implementation is the process whereby an organization defines its direction to ensure that its resources, both capital and human, are appropriately allocated. The development of budgets, programs, and procedures assist in implementing strategy regardless of the level of the business. The evaluation and control process monitors the company's performance against its desired results. This step within the strategic management process requires the participation of all levels of management; actions plans, corrective actions, and problem resolution are necessary to ensure that the workforce is performing up to specified standards. Evaluation and control also determines the effectiveness of the company's strategies, measuring actual performance against the desired results stated in the mission statement. "Based on performance results, management may need to make adjustments in its strategy formulation, in implementation, or in both"