Strategic Management/Strategy Formulation

Topics: Strategic management, Strategic planning, Mission statement Pages: 18 (4749 words) Published: March 2, 2005
What aspects of strategy formulation do you think requires the most time? Why?

"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 formulation issues include deciding what new businesses to enter, what businesses to abandon, how to allocate resources, whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover. Strategy implementation often is called the action stage of strategic management. Implementing strategy means mobilizing employees and managers to put formulated strategies into action. Often considered to be the most difficult stage in strategic management, strategy implementation requires personal discipline, commitment, and sacrifice."

Why is strategy implementation often considered the most difficult stage in the strategic-management process?

"Strategy implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed. Often considered to be the most difficult state in strategic management, strategy implementation requires personal discipline, commitment, and sacrifice. Successful strategy implementation hinges upon managers' ability to motivate employees, which is more an art than a science."

Why is it so important to integrate intuition and analysis in strategic management?

"The strategic-management process can be described as an objective, logical, systematic approach for making major decisions in an organization. Yet strategic management is not a pure science that lends itself to a nice, neat, one-two-three approach. Based on past experiences, judgment, and feelings, most people recognize that intuition is essential to making good strategic decisions. Intuition is particularly useful for making decisions in situations of great uncertainty or little precedent. Analytical thinking and intuitive thinking complement each other."

Discuss relationships among objectives, strategies, and polices.

"Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities. Strategies are the means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures. Policies are the means by which annual objectives will be achieved. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives. Policies are guides to decision making and address repetitive or recurring situations."

Discuss the importance of feedback in the strategic-management model.

A good strategic management process emphasizes feedback as much or more than passage of the plan from top to bottom. The performance of your business depends upon the performance of each team and each individual staff member. Feedback is an essential part of the strategic-management model. Feedback enables significant improvements in performance. "Communication is a key to successful strategic management. Through involvement in the process, managers and employees become committed to supporting the organization. Dialogue and participation are essential ingredients.

Would strategic-management concepts and techniques benefit foreign businesses as much as domestic firms? Justify your answer.

Yes, I believe...
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