Strategic management consists of four basic elements.
of Strategic Management
management consists of four basic elements.
1. Environmental scanning
2. Strategy formulation
3. Strategy implementation
4. Evaluation and control
Figure 2. 1 shows simply how these elements interact. Figure 2 .2 ex-pands each of these elements and serves as the model
Environmental Scanning is the
monitoring, evaluating, and dis-seminating of information from the external and
internal environments to key people within the corporation. Its purpose is to
identity strategic factors – those external and internal elements that will
determine the future of the corporation.
The external environment consists
of variables (Opportunities and Threats) that are outside the organization and
not typically within the short-run control of top management. These variables
form the con-text within which the corporation exists.
The internal environment of a
corporation consist of variables (Strengths and Weakness) that are within the
organization itself and are not usually within the short run control of top
management. These vari-ables form the context in which work is done. They
include the corpora-tion’s structure, culture, and resources. The simplest way to conduct
environmental scanning is through SWOT analysis . SWOT is an acronym used to
describe those particular Strengths, Weaknesses, Opportunities, and Threats
that are strategic fac-tors for a specific company.
Strategy formulation is the
development of long-range plans for the effective management of environmental
opportunities and threats, in light of corporate strengths and weaknesses. It
includes defining the corporate mission, specifying achievable objectives,
developing strate-gies and setting policy guidelines. Strategy
Implementation is the process by which
strategies and polices are put into
action through the development of programs, budgets and procedures. This
process might involve changes within the overall cul-ture, structure, and/or
management system of the entire organization. Most of the times strategy
implementation is carried out by middle and lower level managers with top
management’s review. Some times refer-eed to as operational planning, strategy
implementation often involves day-to-day decisions in resource allocation. It
includes programs, budg-ets and procedures. Evaluation and control is the process in which
corporate activities and performance results are monitored so that actual
performance can be compared with desired performance. Managers at all levels
use the re-sulting information to take corrective action and resolve problems.
Al-though evaluation and control is the final major element of strategic
management, it also can pinpoint weaknesses in previously implemented strategic
plans and thus stimulate the entire process to begin again.
Tags : Strategic Management - Concept Of Corporate Strategy
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