STRATEGIC MANAGEMENT PROCESS

Strategic Management Process

Strategic Management Process

Strategic management is the art, science and craft of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. It is the process of specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. (Pearce, Robinson, 2003)

Three ongoing process- analysis, decisions, and actions-that are central to strategic management. In practice, these three process-often referred to as strategy analysis, strategy formulation, and strategy implementation-are highly interdependent. Further, these three processes do not take place one after the other in a sequential fashion in most companies. Henry Mintzberg, a very influential management scholar at McGill University, argues that conceptualizing the strategic management process as one in which analysis is followed by optimal decisions and their subsequent meticulous implementation neither describes the strategic management process accurately nor prescribes ideal practice. In his view, the business environment is far from predictable, thus limiting our ability for analysis. Further, decisions in an organization are seldom based on optimal rationality alone, given the political processes that occur in all organizations. Taking into consideration the limitations discussed above, Mintzberg (Pettigrew, 1996)proposed an alternative model of strategy development. For a variety of reasons, the intended strategy rarely survives in its original form. Unforeseen environmental developments, unanticipated resource constraints, or changes in managerial preferences may result in at least some parts of the intended strategy remaining unrealized. On the other hand, good managers will want to take advantage of new opportunity presented by the environment even if it was not part of the original set of intentions. 

Developing A Strategic Vision

Leadership must first decide on a vision for the organization that focuses on where they want the organization to be five to ten years down the road. The idea is to give the company a strong identity, provide a sense of purpose for the company's activities, and define who they are and what they do. A big first step in developing the strategic vision is to create a mission statement. (Johnson, Scholes, 1993, )

The mission statement should define what an organization's purpose is and what it hopes to accomplish in the future. The corporate identity begins to take shape when the mission statement captures the strategic vision of leadership. A good mission statement should include three things: - Core purpose: what the company is in the business of. - Core values: what the company stands for. - Visionary goals: where the company is headed.

While historically, companies have had short, one line mission statements, many companies are using longer statements in an attempt to make their mission statement more than just a catch-phrase. They use longer statements that actually convey more about ...