Definition
Strategic management process entails defining a company’s strategy. It is additionally the procedure by which managers make a decision of set of strategies for the company that will enable it attain better performance.
Components
Environmental Scanning: Refers to a procedure of collecting, scrutinizing, and providing data for strategic purposes. The process helps in the evaluation and analysis of external and internal factors influencing a company.
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Strategy Formulation: The process of choosing the best action for attaining organizational goals and hence attaining organizational purpose ( Hill & Jones, 2010). After completing environmental scanning, leaders corporate and formulate functional and business strategies.
Strategic Implementation: Entails making the strategy functional as planned, or commencing the plans of the particular strategy. The process includes designing the company’s structure, resource distribution, management of human resources, and formulating decision making process.
Strategy Evaluation: The final step under this category that includes appraising external and internal factors, that are root to the current strategies, measurement of performance, and instigating remedial actions ( Seker, 2013). Evaluation ensures implementation of the corporate strategy meets its objectives.
Importance
All companies and organizations need a strategic management process to appraise the industries and business in which the firm is involved ( Analoui & Karami, 2003). The process is useful since it appraises a company’s competitors and fixes objectives and goals to meet all the future and present rivals as well the reassessment of all the present strategies.
Company Analysis
There are approaches with respect to strategic management procedure: The industrial organizational approach as well as the sociological approach. In this case, a company, for instance, a company like Google prefers the latter rather than the former. The sociological approach operates primarily with human interactions and is founded on conjectures of bounded rationality, profit sub-optimality, as well as satisfying traits. The industrial organizational approach favors the economic theory and deals with matters like resource allocation, competitive rivalry, and economies of scale ( Hill & Jones, 2010). This approach makes use of suppositions of individual discipline, rationality, and maximization of revenue.
References
Analoui, F., & Karami, A. (2003). Strategic management in small and medium enterprises . London [u.a.: Thomson.
Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach . Boston, MA: Houghton Mifflin.
Seker, Y. (2013). Role of mission and its position within the strategic management process . Place of publication not identified: Grin Verlag.
