2. Strategic management process
According to David
◦ the art and science of formulating, implementing, and evaluating cross-functional decisions that
enable an organization to achieve its objectives
4. Stages of Strategic Management
Strategy formulation
◦ includes developing a vision and mission, identifying an organization’s external opportunities
and threats, determining internal strengths and weaknesses, establishing long-term objectives,
generating alternative strategies, and choosing particular strategies to pursue
Strategy implementation
◦ requires a firm to establish annual objectives, devise policies, motivate employees, and allocate
resources so that formulated strategies can be executed
◦ often called the action stage
5. Stages of Strategic Management
Strategy evaluation
◦ reviewing external and internal factors that are the bases for current strategies, measuring
performance, and taking corrective actions
6. Steps of Strategic Management
oDevelop vision and mission
oSwot analysis
oEstablish long term objective
oGenerate, evaluate and choose strategies
oImplement strategies
oMeasure and evaluate performance
7. Develop vision and mission
A vision statement tells people
◦ Where we want to go
◦ What we want to become
◦ What we want to accomplish
◦ Why it is important
And a mission expresses the organization’s:
◦ Purpose - the needs we exist to address
◦ Business - what are we doing to address these
◦ Values - what principles or beliefs guide our work
8. Swot analysis
A SWOT analysis (alternatively SWOT matrix) is a structured planning method
used to evaluate the strengths, weaknesses, opportunities and threats involved
in a project or in a business venture. Strengths: characteristics of the business or
project that give it an advantage over others.
Weaknesses: characteristics that place the business or project at a disadvantage
relative to others.
Opportunities: elements that the project could exploit to its advantage.
Threats: elements in the environment that could cause trouble for the business
or project.
9. Establish long term objective
An objective is defined as the end results of planned activity. In other words, it
means that objective is referred to as the outcomes that a company wish to
achieve from the activities planned. An objective should state on the activities
that are needed to be completed and the timeline on when it should be
accomplished. Some of the focus areas for a company when setting their
objectives include profitability, efficiency, growth, shareholder wealth, utilization
of company resources, reputation, market share, etc. An organization is
considered to be successful in achieving its corporate objectives when the
company manage to fulfill its missions.
10. Establish long term objective
For instance, Toyota US has set a definite objective to improve the quality of its
products, enhance efficiency, minimize the cost of production, and increase its
productivity to cater to the different customer needs in its market. Toyota US has
invested on research and development activities to produce high quality cars.
Besides that, the company also emphasis on the importance of human resource
as the company believes that satisfied employees will produce high quality
products.
11. Generate, evaluate and choose strategies
corporate strategy describes company's direction in terms of its general attitude
towards growth and the management of its various businesses and product
lines. From the definition, we can say that corporate strategy is the company
mission and objectives that must be accomplish such as profit maximization
from the product or service. Corporate strategies typically fit within the three
main categories of stability, growth and retrenchment.
12. Implement strategies
strategy implementation is defined as the process by which strategies and
policies are put into action through the development of programs, budgets, and
procedures. In other words, it means that strategy implementation is the
process of carrying out the strategy which has been formulated.
13. Measure and evaluate performance
evaluation and control is defined as the process in which corporate activities and
performance results are monitored so that actual performance can be compared
with desired performance. In other words, evaluation and control is the
evaluation made to compare the strategy that a company applied is success or
not to determine the company performance levels.
15. Glueck's Model
William F. Glueck developed several models of strategic management based on the general
decision-making process.
The phases of this model are as follows:
* Strategic managements elements: "...to determine mission, goals, and values of the firm
and the key decision makers."
* Analysis and diagnosis: " ...to search the environment and diagnose the impact of the
threats and opportunities."
* Choice: ...to consider various alternatives and assure that the appropriate strategy is
chosen."
* Implementation: "...to match plans, policies, resources, structure, and administrative style
with the strategy."
* Evaluation: "...to ensure strategy and implementation will meet objectives."
16. As major contribution to the strategic management process, Glueck considered two
elements: "enterprise objectives" (the mission and objectives of the enterprise," and
"enterprise strategists" (who are involved in the process).
Moreover, Glueck broke down the planning process into analysis and diagnosis, choice,
implementation, and evaluation functions. This model also treats leadership, policy, and
organizational factors.
However, Glueck omitted the important medium- and short-range planning activities of
strategy implementation.
17. The Schendel And Hofer Model
Dan Schendel and Charles Hofer developed a strategic management model, incorporating
both planning and control functions.
Their model consists of several basic steps:
(1) goal formulation,
(2) environmental analysis,
(3) strategy formulation,
(4) strategy evaluation,
(5) strategy implementation, and
(6) strategic control.
18. According to Schendel and Hofer, the formulation portion of strategic management consists
of at least three subprocesses:
- environmental analysis,
- resources analysis,
- and value analysis.
Resource and value analyses are not specifically shown, but are considered to be included
under other items (strategy formulation).
19. The Thompson And Strickland Model
Thompson and Strickland developed several models of strategic management.
According to Thompson and Strickland strategic management is an ongoing process:
"nothing is final and all prior actions and decisions are subject to future
modification."
This process consists of five major five ever-present tasks:
1. Developing a concept of the business and forming a vision of where the organization
needs to be headed.
2. Converting the mission into specific performance objectives.
3. Crafting a strategy to achieve the targeted performance.
4. Implementing and executing the chosen strategy efficiently and effectively.
5. Evaluating performance, reviewing the situation, and initiating corrective adjustments in
mission, objectives, strategy, or implementation in light of actual experience, changing
conditions, new ideas, and new opportunities.
20. Thompson and Strickland suggest that the firm's mission and objectives combine to
define "What is our business and what will it be?" and "what to do now" to achieve
organization's goals. How the objectives will be achieved refers to the strategy of firm.
In general, this model highlights the relationships between the organization's mission, its
long- and short-range objectives, and its strategy.
21. Korey's Model
Modern theorist and writer, Jerzy Korey-Krzeczowski, founder and President Canadian
School of Management, have proposed an integrated model of strategic management.
Korey's model consists of three discrete major phases:
(1) preliminary analysis phase,
(2) strategic planning phase,
(3) strategic management phase.
Further, Korey states that the systematic planning consists of at least four continuous sub-
processes:
(1) planning studies,
(2) review and control,
(3) feasibility studies, and
(4) feasibility studies.
The planning is ongoing process, thus all these subprocesses are integrated and they are
interacted each other; creating the fully dynamic model.
22. Korey's model incorporates both planning and control functions. Moreover, it describes not
only long-range strategic planning process, but also includes elements of medium and
short range planning.
Korey's model is based on existing models; but it differs in content, emphasis, and process.
This model adds several facets to the planning process that the reader has not seen in
other models. Some of these are: development of educational philosophy, analysis of the
value systems, review of community orientation and social responsibilities, definition of
planning parameters, planning studies, and feasibility studies.
Using Kory's model for strategic planning provides both new direction and new
energy to the organization
23. Schematic Model
As an aid in envisioning the strategic management process in this paper.
This model was developed by Peter Wright, Charles Pringle and Mark Kroll(1994). It consists of
five stages:
1. Analyze the environmental opportunities and threats.
2. Analyze the organization's internal strengths and weaknesses.
3. Establish the organizational direction: mission and goals.
4. Strategy formulation.
5. Strategy Implementation.
6. Strategic Control.
The model begins with an analysis of environmental opportunities and threats. The
organization is affected by environmental forces; but the organization can also have an impact
upon its environment.
The organization's mission and goals are linked to the environment by a dual arrow. This
means that the mission and goals are set in the context of environmental opportunities and
threats.
24. The next arrow depicts the idea that strategy formulation sets strategy implementation in
motion. Specifically, strategy is implemented through the organization's structure, its
leadership, and its culture.
Then, the final downward arrow indicates that the actual strategic performance of the
organization is evaluated.
The control stage is demonstrated by the feedback line that connects strategic control to
the other parts of the model.
