To deal effectively with the wide array of factors affecting the ability of a business to grow and prosper, managers need advanced processes they feel will facilitate the optimal positioning of the business in its competitive environment. Such positioning is possible with strategic management because this process improves preparedness for unexpected internal or competitive demands. Therefore, strategic management is an all-encompassing approach for formulating, implementing and evaluating managerial decisions in a way that permits the business to reach its objectives. For a strategic management plan to be successful, however, every manager should:
Clearly see the need for change
Be firmly committed to the idea of changing the business planning process
Assure that the strategic management process has credibility with everyone involved
Make sure that final plans are realistic and reflect actual resources and capabilities
Train all participants in the procedures essential to the strategic management process
Develop concise and well-organized plans
One of the world's best performing natural resources companies created a unique organizational structure that combines the advantages of small business units with "virtual structures" - groupings of these business units - that can address different strategic issues and competitive environments.
The formality of the strategic management process varies widely. Formality refers to the degree to which membership, responsibilities, authority and discretion in decision making are specified. It is an important consideration in the study and application of strategic management because the degree of formality is usually positively correlated with the cost, comprehensiveness, accuracy and success of planning. The requirements for small business indicate the need for a moderate degree of formality. This is consistent with the ability to communicate face-to-face (size) and the need for flexibility (changing demands). The important issue is involvement with the process, not generating reams of paperwork (Camerer, 195-219). Resistance to change should be reduced. Businesses vary in the processes they use to formulate and direct their strategic management activities. Many using sophisticated planning techniques have developed more detailed processes than similarly sized, less formal planners. Small businesses that rely on the strategy formulation skills and limited time of an entrepreneur typically exhibit very basic planning concerns when contrasted with larger firms in their industries (Harrison, St. John, 44-59). Understandably, organizations with diverse operations due to multiple products, markets or technologies also tend to use more complex strategic management systems. Despite differences in detail and degree of formalization, the basic components of the models used to analyze strategic management operations are very similar. The strategic management process is based on the belief that businesses should continually monitor internal and external events so timely changes can be made. To survive, firms must be able to identify and adapt to change. This involves timely planning, directing, organizing and controlling of the strategy-related decisions and actions of the firm (Camerer, 195-219). The strategic management process is sometimes improperly perceived as a unidirectional flow of objectives, strategies and decision parameters from management to the employees. In fact, the process should be highly interactive since it is designed to stimulate input from creative, skilled and knowledgeable people working at every level of the business.
Tools Used in Strategy Development
This section very briefly describes several key tools that can be used during the course of strategy development and strategic planning. The list is not intended to be comprehensive but to illustrate the types of tools that are available.
Please join StudyMode to read the full document