Crisis management in business environment requires pro-activeness and anticipation. Instead of spending a great deal of money, time and energy to react to unforeseen changes, organizations need to develop strategic planning skills to deal with immediate problems, but mostly to prepare for future challenges.
Strategic management is an ongoing activity of successful organizations determining where an organization will be in the future and how it’s going to get there. The process addresses three fundamental requirements on strategic thinking: a crystal-clear purpose, a thorough understanding of the environmental forces that relate to that purpose and originality in developing effective responses to those forces. Continually posing the question “Are we doing the right thing?” strategic management entails readiness to review the organization’s current practices, while paying attention to the “big picture” in the future. In addition, by providing increased awareness of future trends and needs, it helps the smooth adaptation of the organization to changing circumstances. In that way, strategic management forces organizations to look into the future, while offering the opportunity to influence the future assuming a proactive attitude.
The process is typically used to determine organizational mission, vision, values, and goals and objectives and includes several major steps in the process. These include:
1/ Start-up phase
The start-up phase focuses on the formation of the planning team. The team should identify the key products and services and the principal markets the firm should operate in, collect historical data and projected information in regards to environmental factors, technology, regulations and competition and identify possible constraints to conducting the strategic planning process.
2/ Diagnosis phase
The diagnosis phase focuses on thoroughly investigating environmental issues and trends by performing an external and internal audit. The external audit focuses on business threats and opportunities such as direct/indirect competition, outsourcing, and niche markets, while the internal audit examines the organization’s strengths and weaknesses in terms of products, employees, skills, resources and needs. In addition, the diagnosis phase establishes a clear understanding of the business situation and identifies key issues and challenges to address.
3/ Strategy formulation & implementation Phase
The strategy formulation & implementation phase focuses on the development of appropriate strategies to produce products and services to best respond to the issues and challenges identified in the diagnosis phase. In this phase of strategic management, strategies are integrated into a clear organizational vision that defines the action plan and performance indices.
After these phases are completed and strategic plans are crafted, organizations focus on customer satisfaction and profitable operations. In this context, the creation of a new corporate mission assists to the deployment of available resources to implement the competitive strategies. Moreover, this proactive posture provides organizations with a sense of direction and stability, while employing effective recruitment and leadership patterns.
The most successful organizations recognize strategic management to be vital to their ongoing success. In an ever changing business environment, strategic plans need ongoing attention based on technological change, governmental regulations, industrialization and globalization. In this context, strategic management develops precise and considerable actions and directions to meet the organizational objectives. In addition, being the foundation that assists an organization to jointly and cooperatively gain control of the future by putting all organizational members into the system, strategic management provides standards of accountability for people, programs, and allocated resources.
Watch the video related to strategic management
This lecture by Dr Ian Mackechnie is an excellent presentation on strategic management. It is part of the modules that are offered by the MBA at www.stamfordonline.com.my. At www.stamfordonline.com.my, we have introduced the system of blended learning to obtain your MBA. You will complete coursework through electronic forums, video seminars, textbooks, tutor support and face to face seminars. You will receive your lecture notes and assignments from your lecturers online. This method of …
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