My last blog, I spoke on ,”creativity” and “innovation.” This blog goes hand in hand with the previous blog and should give you some ideas on how to take your business, be it small or large, in a direction of importance. From time to time you will see me jump from topic to topic, but I will always revisit these topics to add to them from time to time. I will give an introduction to “Strategic Management,” and the importance of such critical thinking and the impact it could have on your firm.This a multiple part posting in which I will update.
Strategic Management as far as we are concerned, is defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives. It comprises nine critical tasks:
- Formulate the company’s mission, including broad statements about its purpose, philosophy, and goals.
- Conduct an analysis that reflects the company’s internal conditions and capabilities.
- Assess the company’s external environment, including both the competitive and the general contextual factors.
- Analyze the company’s options by matching its resources with the external
- Identify the most desirable options by evaluating each option in light of the company’s mission.
- Select a set of long-term objectives and grand strategies that will achieve the most desirable options.
- Develop annual objectives and short-term strategies that are compatible with the selected set of long-term objectives and grand strategies.
- Implement the strategic choices by means of budgeted resource allocations in which the matching of tasks, people, structures, technologies, and reward systems is emphasized.
- Evaluate the success of the strategic process as an input for future decision making. (see reference at the end).
Strategic management, is really a way to ensure your long-term success in your current markets. In other words, cover your A! Keep in mind that these elements take are analyzed by the highest of management in any structure. A modern executive needs to be always aware of long-term success and what the can possibly do to increase survivability (Pierce & Robinson, 2009).
A Single business entity will have different levels in which strategy is formulated and implemented as opposed to multiple business firms.Corporate-level strategic managers attempt to exploit their firm’s distinctive competencies by adopting a portfolio approach to the management of its businesses and by developing long-term plans, typically for a three- to five-year period (Pierce & Robinson, 2009).
In the middle of the decision-making hierarchy is the business level, composed principally of business and corporate managers. These managers must translate the statements of direction and intent generated at the corporate level into concrete objectives and strategies for individual business divisions, or SBUs (Pierce & Robinson, 2009).
At the bottom of the decision-making hierarchy is the functional level, composed principally of managers of product, geographic, and functional areas. They develop annual objectives and short-term strategies in such areas as production, operations, research and development, finance and accounting, marketing, and human relations (Pierce & Robinson, 2009).
These three strategic levels are found in single or multiple business entities. Though the layers in implementation may seem more layered.
Join me in the next Blog entitled Strategic Management II continued soon!
Pearce & Robinson (2009). Strategic Management: Formulation, Implementation and Control (11th ed).