Strategic management is the highest level of management activity that is aimed at specifying the objectives of organization and development of planes and policies leading to the achievement of these objectives. Usually this management is performed by Chief Executive Officer.
The process of determination of the objectives should include the evaluation of the company’s recourses, environmental circumstances, core objectives, etc. It also should be appropriate to the business environment the organization has to face. Good strategy should integrate policies, goals and actions that should be taken (tactics) into the integral structure. However, it should also contain vision since excellent strategic management solely is unable to provide perfect results.
Strategic management is in fact the combination of strategy formulation and its implementation. However, the strategy should correspond to the purpose.
Strategy formulation involves fallowing:
- Micro-environmental and macro-environmental, internal and
external situation analysis;
- Setting the objectives according to this assessment,
including long term view, mission statement (the role of the organization in the society), financial and strategic business objectives, tactical objectives;
- As the result the objective analysis should suggest a strategic plan that provides the stapes how to achieve those objectives;
In other word the three step analysis is aimed at determining the current situation of the company, determining where the company what to see itself and determining the way how to get there. These steps are the essence of strategic planning.
Implementation of the strategy involves:
- Recourses allocation (technology, time, personal, finance);
- Establishing a chain of command or some alternative structure (such as cross functional teams)
- Assigning responsibility of specific tasks or processes to specific individuals or groups
- It also involves managing the process. This includes monitoring results, comparing to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, and making adjustments to the process as necessary.
- When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with (and/or conversion from) legacy processes. (Strategic management)
Strategy formulation and strategy implementation are both equally important for achieving necessary results.
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