Let us examine exactly what a strategic management process is all about. This is a process that seeks to define the entire strategic approach of an entire organization. People also describe it as a process that upper level managers will choose to be the group of strategies that their organization will follow. In addition, the strategies that are believed to achieve better performance are also selected.
Another goal of strategic management is to set up a continuous process that evaluates the industries and business in which their company is currently involved. For instance, the process will automatically appraise all of its competitors, and then assign goals to maximize business and market share. And it will also seek to forecast future trends to maximize ongoing business and meet market needs well into the future. These goals are being reassessed and evaluated periodically to ensure optimization occurs.
Strategic Management Process contains these 4 Steps:
- Environmental Scanning- Environmental scanning is referring to the activities of gathering, scrutinizing and submitting data for strategic purposes. It assists in evaluating all external and internal factors that influence their organization. After an environmental analysis is executed, then upper management will assess the results on a constant basis and look for opportunities to improve and optimize them.
- Strategy Formulation– Strategy formulation is when decisions are made to decide the most effective plan of action to accomplish the goal of the organization, and to achieve organizational purpose. After environment scanning is completed, managers will gather formulate strategies on the business, corporate, and functional levels.
- Strategy Implementation– Strategy implementation is the process of making chosen strategies operate as intended or putting the strategies that were chosen by organization into action. Strategy implementation often includes the design of the organization’s distributing resources, structure, creating the decision making process, and also the management of human resources.
- Strategy Evaluation– Strategy evaluation is the last step of the strategy management process. The major strategy evaluation functions are: the appraisal of external and internal factors that are the basis of existing strategies, measuring and evaluating performance, and then taking proper remedial and corrective actions. Evaluation will ensure that organizational strategies as well as the implementation of those strategies will meet the organizational goals.
All of the components listed above are very critical steps that are to be carried out, in a chronological sequence, whenever a brand new strategic management plan is created and implemented. All existing businesses that already have a solid strategic management plan can actually revert to the steps listed above, depending on the existing situation and their requirements. Then essential changes can be made as necessary.
Getting Results from the Management Process
The act of strategic management should be an ongoing process in any business or organization. Thus, it needs to be understood that every single component needs to interact seamlessly with all the other components in the system. When all components are singing in a beautiful chorus together and providing optimal results, that is when the strategic management process is working as intended.