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Stages of Strategic Management: Strategy Formulaton

Strategic management is the art and science of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives. It involves three main stages: strategy formulation, implementation, and evaluation. Strategy formulation develops a vision and mission, identifies external opportunities and threats, determines internal strengths and weaknesses, and establishes long-term objectives. Strategy implementation establishes annual objectives, motivates employees, and allocates resources. Strategy evaluation reviews performance and takes corrective actions. Strategic management allows organizations to be proactive, initiate activities, and use a systematic approach to decision-making.

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44 views3 pages

Stages of Strategic Management: Strategy Formulaton

Strategic management is the art and science of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives. It involves three main stages: strategy formulation, implementation, and evaluation. Strategy formulation develops a vision and mission, identifies external opportunities and threats, determines internal strengths and weaknesses, and establishes long-term objectives. Strategy implementation establishes annual objectives, motivates employees, and allocates resources. Strategy evaluation reviews performance and takes corrective actions. Strategic management allows organizations to be proactive, initiate activities, and use a systematic approach to decision-making.

Uploaded by

Eliy Nazira
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER 1

DEFINITION OF STRATEGIC MANAGEMENT

 The art and science of formulating, implementing, and evaluating cross-functional decisions
that enable an organization to achieve its objectives.
 Focus on integrating management, marketing, finance & accounting, and more.

STRATEGY EVALUATION
STRATEGY FORMULATON
 Final stage in strategic
Developing a vision & STAGES OF STRATEGIC management.
mission, identify
organization’s external MANAGEMENT  Activities: Reviewing
opportunities & threats, internal and external
determine strength and factor, measuring
weakness, establish long performance, taking
term objectives and more. corrective actions.

STRATEGY IMPLEMENTATION
 Establish annual objectives, motivate employees and
allocate resources.
 Called as “action stage that mobilizing employees and
managers to put a strategies into action.

KEY TERMS IN STRATEGIC MANAGEMENT.

Competitive Advantage

 Any activity a firm does especially well compared to activities done by rival firms or any
resources a firm possesses that rival firm desire.
Strategists
 Individuals most responsible for the success and failure of an organization.
 Help organizations gather, analyse, and organize information.

Vision and Mission Statements


 Vision statement is the answer for a question “what do we want to become”
 It is the first step in strategic planning.
 Mission statement are “enduring statements of purposes that distinguish one business from
other firms.
 It identifies the scope of firm’s operations in product and market term.

External Opportunities and Threats


 It refers to economic, social, cultural, demographic, technological, level and others that can
benefit or harm an organization.
Internal Strengths and Weaknesses

 An organization controllable activities that are performed well or not.


 Arise in management, marketing, finance, R&D and more.
 It determined relative to competitors.

Long Term Objectives


 Specific result that an organization seeks to achieve in pursuing its basic mission that is more
than one year.
 To provide direction and aid in evaluation of a firm.

Strategies

 Long term objectives will be achieved.


 It is a potential actions that require top management decisions and large amounts of the
firm’s resources.

Annual Objectives

 Short term milestones that organization must achieve to reach long term objectives.
 Should be measurable, quantitative, challenging, realistic and more.

Policies

 It is a guidelines, rules, procedures established to support efforts to achieve objectives.


 It guide to decision making and address repetitive or recurring situations.
 They outline an organizations expectations of its employees and managers.

STRATEGIC MANAGEMENT MODEL


BENEFITS OF ENGAGING IN STRATEGIC MANAGEMENT

Allows an organization to be more proactive in shaping their future.


Allows an organization to initiate and influence activities.
To help the organization formulate better strategies through the use of more
systematic, logical, rational approach for decision making.
Through dialogue and participation, employees become committed to support the
organization.

DEEPER/IMPROVED GREATER COMMITMENT


ENHANCED UNDERSTANDING RESULT
- To achieve objectives
COMMUNICATION - Of other’s views ALL MANAGERS AND
- To implement strategies EMPLOYEES ON A
- Dialogue - Of what the firm is
- To work hard MISSION TO HELP THE
- Participation doing/planning and why
FIRM SUCCEED

FINANCIAL BENEFITS

NONFINANCIAL BENEFITS
 Enhanced awareness of external threats
 Improved understanding of competitors strategies
 Increase employee productivity
 Reduced resistance to change
 Clearer understanding of performance-reward relationship

Why some firms Do No Strategic


Pitfalls In Strategic Planning
Planning
Overconfident Use SP to gain control over
View planning as a waste of time decisions and resources.
Laziness Only to satisfy regulatory
No formal training in strategic requirements
management Viewing planning as unnecessary

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