Business Policy Final Exam Review
1: Strategic Management: set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation and evaluation and control. Emphasize the monitoring and evaluating of external opportunities and threats in light of a corporations strengths and weaknesses.
2: 4 phases of strategic management:
Phase 1- basic financial management- managers initiate serious planning when they are requested to propose the following years budget. Projects are proposed on the basis of very little analysis, with most information coming from within the firm. The sales force usually provides the small amount of environmental information.
Phase 2: forecast- based planning- as annual budgets become less useful at stimulating long-term planning, managers attempt to propose five-year plans. At this point they consider projects that they may take more than one year. In addition to internal information managers gather any available environmental data- usually on an ad hoc basis and extrapolate current trends five years into the future. This phase is also time consuming, often involving a full month of managerial activity to make sure all the proposed budgets fit together.
Phase 3: externally oriented planning- frustrated with highly political yet ineffectual five-year plans, top management takes contr9ol of the planning process by initiating strategic planning. The company seeks to increase its responsiveness to changing markets and competition by thinking strategically. Planning is taken out of the hands of lower-level managers and concentrated in a planning staff whose task is to develop strategic plans for the corporation.
Phase 4: strategic management- realizing that even the best plans are worthless without input and commitment of lower-level managers, top...
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