In order for companies to be successful in a constantly changing environment a strategic management plan will need to be developed which consists of four phases: basic financial planning, forecast planning, externally oriented (strategic) planning, and strategic management.
"Strategic management is a set of managerial decisions and actions that determine the long-run performance of a corporation" (Wheelen & Hunger, 2006, p.3). The benefits of strategic management helps the firm focus on the objectives and develop the steps involved in obtaining the vision and financial wealth of the organization. An effective strategic management plan should include the following three questions: (1) Where is the organization now? (2) If no changes are made, where will the organization be in 1 year? 2 years? 5 years? 10 years? Are the answers acceptable? and (3) If the answers are not acceptable, what specific actions should management undertake? What are the risks and payoffs involved? (Wheelen & Hunger, 2006). With these things in mind I can proceed with reading "The Wallace Group," Case 2 in the text.
After reviewing "The Wallace Group," Case 2 I was able to determine that there are several problems occurring within this company. However, the most important problem facing the Wallace Group is improper management largely due to Harold Wallace's "one track mind" focused on the bottom line which lacks vision and direction. The Wallace group is comprised of three groups: plastics, chemicals and electronics. The program of diversification resulted in the acquisition of the chemical and plastics division in which Harold Wallace maintained the majority of the stock and decision making power. The problem with his diversification plan is the lack of vision as he continued to run the electronic group while others managed the plastic and chemical groups as if they were separate entities. This idea was doomed to fail before it began as the managers put in place to run the...
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