MGT/498 – Strategic Management Process
Successful decision makers in business use a strategic management process as a way to identify and evaluate the performance of a company.
Strategic management serves as a roadmap of sorts and usually consists of four primary components that include environmental scanning, strategy formulation, strategy implementation, and evaluation and control.
Environmental scanning is commonly achieved by conducting a thorough SWOT analysis to understand the strengths, weaknesses, opportunities, and threats that the company is currently facing. Strategy formulation can then blossom from the information gained from the environmental scanning.
Strategy formulation is focused on long-term goals and objectives that management decides upon, and becomes the mission for the company. Strategy implementation is accomplished by putting into place new processes, changing organizational structure, re-allocating budgets, or any other requirements needed in order to bridge the gap between where the company is at and where the new strategy wants to the company to be.
Evaluation and control is necessary in order to successfully determine if the new strategic goals have been met. If the strategy has been implemented successfully, it is important to have measurable results that can be maintained over time and become a permanent part of the new company culture or way of doing business (Wheelen & Hunger, 2010).
Importance of Strategic Management
It is important for businesses to use a strategic management process for several reasons. Many times the decisions made by upper management can become politicized and lack the proper scrutiny, resulting in poor decisions being lauded by yes men.
Strategic management can alleviate this problem by allowing for a more scientific analysis to determine if a decision to move in a certain direction is actually a good idea and allows for decision makers to look before they leap.
“Strategic management has evolved over the last few decades and has become a critical approach for all businesses across all industries” (Buhler, 2008). Globalization of the economy has prompted the need for businesses to be more flexible and have the ability to adapt to changing conditions more rapidly than in the past.
Utilizing a strategic management process is a vital tool in helping decision makers react to these changes in their environment (Wheelen & Hunger, 2010).
Strategic Management Process at Target
The management at Target Corporation utilizes an eight step strategic decision-making process in order to remain an industry leader. Target begins the process by evaluating current performance results and measures key indicators against stated objectives.
The company reviews top management and corporate governance. Strategic factors that revolve around new opportunities or incoming threats are analyzed. The company then looks inwards to assess internal strengths and weaknesses. Target then looks to see what needs to be done to meet new conditions that are determined by the reviewed objectives.
When all the important factors have been determined and the gap analysis is complete, then new strategies are developed in order to accomplish the new goals or objectives needed to close the gap. These new strategies are then implemented and finally evaluated and controlled to ensure the plan of attack has been successful (Wheelen & Hunger, 2010).
Buhler, P. M. (2008). managing in the new millennium: the use of dashboards in the strategic management process. Supervision, 69(11), 19.
Wheelen, T. L., & Hunger, J. D. (2010). Concepts in Strategic Management and Business Policy (14th Edition) by Pearson
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