PART A: Advantages of a Strategic Audit A strategic audit measures the quantitative and qualitative aspects of the performance of a firm based on its past performance. This information will be important to the management in regard to the making of strategic business decisions (Victoria, 2010). Strategic auditing has many advantages. First, strategic auditing fosters quality decisions resulting from a conceptual understanding of the decisions that has brought the company to its current positions. This facilitates the management to embark on “success decisions” without forgetting the “failure decisions”. Secondly, strategic audit facilitates the evaluation of the internal controls by enabling the business to effectively evaluate value-addition of important business processes to the firm at large. Again, it will be through strategic audit that the effectiveness of the controls will be measured (Great Britain, 2005). Thirdly, strategic audit promotes a strong portfolio by focusing on the attention of the management in regard to opportunities in terms of market and various business units. By concentrating on attractive markets, a balanced business portfolio will be achieved. Fourthly, Strategic audit will help in risk minimization by shielding the company against risks resulting from uninformed decisions (Victoria, 2010).
PART B: Need Filled by Strategic Audit First, strategic audit is needed for the formulation of informed decisions, especially by the stakeholders as they will know the happenings in and outside the business. Secondly, strategic audit will be required to take care of the demands of the shareholders (Scotland, 2006). This can be done by assuring them that their investments are put into use in the right activities and resources. Thirdly, strategic audit will be needed in the independent establishment of the business’s state of affairs (Great Britain, 2005). Through audit
References: Albert, K. J. (1983). The Strategic management handbook. New York: McGraw-Hill. Scotland. (2006). The Futures Project: The strategic audit 2006. Edinburgh: Scottish Executive. Wheelen, T. L., & Hunger, J. D. (2006). Strategic management and business policy: Concepts and cases. Upper Saddle River, NJ: Pearson Prentice Hall.