Pearce II and Robinson Jr (1997) define strategic management as “the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives”. Critical tasks:
Formulate the company’s mission including broad statements about its purpose, philosophy and goals Develop a company profile that reflects its internal conditions and capabilities Assess the company’s external environment, including both the competitive and general contextual factors Analyze the company’s options by matching its resources with the external environment Identify the most desirable options by evaluating each option in the light of the company’s mission Select a set of long-term objectives and grand strategies that will achieve the most desirable options Develop annual objectives and short-term strategies that are compatible with the selected set of long-term objectives and grand strategies Implement the strategic choices by means of budgeted resource allocations in which the matching of tasks, people, structures, technologies, and reward systems is emphasized Evaluate the success of the strategic process as an input for future decision making
Thompson and Strickland (1998) say strategic management consists of five interrelated tasks: Forming a strategic vision of what the company’s future make up will be and where the company is headed – so as to provide long term direction, delineate what kind enterprise the company is trying to become and infuse the organization with a sense of purposeful action Setting objectives – converting the strategic vision into specific performance outcomes for the organization to achieve Crafting a strategy to achieve the desired outcomes/results
Implementing and executing the chosen strategy effectively and efficiently Evaluating performance and initiating corrective adjustments to/in vision, long term direction, objectives, strategy, or implementation in the light of actual experience, changing conditions, new ideas and new opportunities. Strategy is a method or way by which an organization accomplishes its objectives. Thompson and Strickland (1998) insist that strategy making is about how: how to achieve performance targets, how to outcompete rivals, how to achieve sustainable competitive advantage, how to strengthen an enterprise’s long term business position, how to make management’s strategic vision for the organization a reality. Thompson and Strickland (1998) observe that the whole idea behind developing a strategic vision and mission statements is to set an organization apart from others in its industry and give it its own special identity, business emphasis and path for development. A vision is a clear view of what one wants to do. Criteria for effective strategy
Clear decisive objectives which if achieved ensure the continued viability and vitality of the entire organization compared to competitors High encouragement of employee initiative – it must preserve freedom of action which subsequently leads to enhanced commitment on the part of the implementing organizational members Concentration on strategically vantage points – strategy must define what will make the enterprise superior or best in class preferably world class Flexible – strategy must build in resource buffers and dimensions for flexibility. These reserved extra resources and flexibility plus repositioning allow viability of firm keeping opponents at a relative disadvantage Coordinated and committed direction leadership – specifically ensuring that each divisional or departmental head is aware of the strategy and the guiding policies and procedures through involvement in their formulation. The leader’s own interests and values must match the needs of their roles in strategy Surprise – like in the military sense a good strategy makes use of speed secrecy and intelligence to attack exposed or unprepared opponents at unexpected times. If the surprise...