The
strategic management process means defining the organization’s strategy. It is
also defined as the process by which managers make a choice of a set of
strategies for the organization that will enable it to achieve better
performance.
Strategic
management is a continuous process that appraises the business and industries
in which the organization is involved; appraises it’s competitors; and fixes
goals to meet all the present and future competitor’s and then reassesses each
strategy.
Strategic management
process has following four steps:
- Environmental Scanning: Environmental scanning
refers to a process of collecting, scrutinizing and providing information
for strategic purposes. It helps in analyzing the internal and external
factors influencing an organization. After executing the environmental
analysis process, management should evaluate it on a continuous basis and
strive to improve it.
- Strategy
Formulation: Strategy formulation is the
process of deciding best course of action for accomplishing organizational
objectives and hence achieving organizational purpose. After conducting
environment scanning, managers formulate corporate, business and
functional strategies.
- Strategy Implementation: Strategy
implementation implies making the strategy work as intended or putting the
organization’s chosen strategy into action. Strategy implementation
includes designing the organization’s structure, distributing resources,
developing decision making process, and managing human resources.
- Strategy
Evaluation: Strategy evaluation is the
final step of strategy management process. The key strategy evaluation
activities are: appraising internal and external factors that are the root
of present strategies, measuring performance, and taking remedial /
corrective actions. Evaluation makes sure that the organizational strategy
as well as it’s implementation meets the organizational objectives.
These components
are steps that are carried, in chronological order, when creating a new strategic
management plan. Present businesses that have already created a strategic
management plan will revert to these steps as per the situation’s requirement,
so as to make essential changes.
Components of Strategic Management Process
Strategic management is
an ongoing process. Therefore, it must be realized that each component
interacts with the other components and that this interaction often happens in
chorus.
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