Please go thru following article on Strategic Management. I hope it will useful for all.
Strategic Management Strategic or institutional management is the conduct of drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. It is the process of specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency". Srategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." “Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” Strategy formulation
Strategic formulation is a combination of three main processes which are as follows: - Performing a situation analysis, self-evaluation and competitor analysis : both internal and external; both micro-environmental and macro-environmental. -Concurrent with this assessment, objectives are set. These objectives should be parallel to a timeline; some are in the short-term and others on the long-term. This involves crafting vision statements (long term view of a possible future), mission statements (the role that the organization gives itself in society), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives. -These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to achieve these objectives. Evaluation of marketing action plan
- Allocation and management of sufficient resources (financial, personnel, operational support, time, technology support) - 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. Thus, when the strategy implementation processes, there have been many problems arising such as human relations and/or the employee-communication. At this stage, the greatest implementation problem usually involves marketing strategy, with emphasis on the appropriate timing of new products. An organization, with a effective management, should try to implement its plans without signaling the fact to its competitors. In order for a policy to work, there must be a level of consistency from every person in an organization, including from the management. This is what needs to occur on the tactical level of management as well as strategic. Strategy evaluation - Measuring the effectiveness of the organizational strategy, it's extremely important to conduct a SWOT analysis to figure out the strengths, weaknesses, opportunities and threats (both internal and external) of the entity in question. This may require to take certain precautionary measures or even to change the entire strategy. In corporate strategy, Strategic options are evaluated against three key success criteria: - Suitability (would it work?) - Feasibility (can it be made to work?) - Acceptability (will they work it?) Suitability
Suitability deals with the overall rationale of the strategy. The key point to consider is whether the strategy would address the key strategic issues underlined by the organisation's strategic position. - Does it make economic sense? - Would the organization obtain economies of scale, economies of scope or experience economy? - Would it be suitable in terms of environment and capabilities? To evaluate suitability include: - Ranking strategic options - Decision trees - What-if analysis Feasibility Feasibility is concerned with the resources required to implement the strategy are available, can be developed or obtained. Resources include funding, people, time and information. To evaluate suitability include: - cash flow analysis and forecasting - break-even analysis - resource deployment analysis Acceptability
Acceptability is concerned with the expectations of the identified stakeholders (mainly shareholders, employees and customers) with the expected performance outcomes, which can be return, risk and stakeholder reactions. - Return deals with the benefits expected by the stakeholders (financial and non-financial). For example, shareholders would expect the increase of their wealth, employees would expect improvement in their careers and customers would expect better value for money. - Risk deals with the probability and consequences of failure of a strategy (financial and non-financial). - Stakeholder reactions deals with anticipating the likely reaction of stakeholders. Shareholders could oppose the issuing of new shares, employees and unions could oppose outsourcing for fear of losing their jobs, customers could have concerns over a merger with regards to quality and support. To evaluate suitability include: - what-if analysis - stakeholder mapping
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Its a very broad topic and mission statements are used for attaining short term objectives and swot is very old and not used for evaluation it is used in strategy formulation right now we use PESTEL. You should read srategy safari the whole of it. It will broaden your horizons quite a lot.
From India, Delhi
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