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Components of strategic management process. An extensive environmental analysis is the first step in the four-part process of strategic management (Alkhafaji, & Nelson, 2013). It requires a thorough examination of internal and external variables that may have a significant impact on important choices. The study includes all the objective and subjective data necessary to guide operations. To evaluate an organization's capabilities, a SWOT analysis (STRENGTHS WEAKNESSES OPPORTUNITIES AND THREATS) is conducted (Babatunde & Adebisi, 2012).
How the organization will attain its objectives is addressed in the strategy formulation process. The mission, which outlines the organization's overarching purpose, and the vision, which outlines the business and the culture it upholds, are both culture that it embraces are stipulated. The company sets out the short term and the long terms goals through prioritization of available resources. Policies and guidelines are drawn out to guide the day to day operations. The concept of the formulation is fundamental as it forms the basis for the growth of the organization on a local and on a global level (Karami, 2016).
Implementation of the strategy is the next step that entails execution of the vision, the mission and the goals formulated. It is a level that requires utilizing the resources of the entity and in particular the workforce to grow. It requires creating an environment that motivates and drives the efforts of the employees in various organization departments towards a common goal (Karami, 2016).
The final concept that is fundamental is evaluation and control of operations to guarantee that the company is headed towards achieving their targets. A comparison is made between the actual results against the set targets. Karami, (2016) emphasizes the importance of evaluation as current success does not warrant long-term success. It is fundamental to have performance indicators that will drive people towards improving their abilities and bringing more value. An evaluation of the environment highlights changes that would provide opportunities that would call for re-strategizing the direction of the entity.
Internal and External Analysis
The internal and external review calls for the performance of a SWOT analysis. Strengths look into inherent abilities that an entity possesses such as innovative employees. Weakness are internal disadvantages that limit the ability of the entity to achieve its maximum potential such as limited funds. Opportunities indicate external factors that bring advantage to the entity such as brand loyalty by customer while threats are external factors that exist that could limit its competitive advantage. They analysis is fundamental in keeping up with competitive advantage and with the volatility of the market today, the importance of fundamental analysis cannot be downplayed during strategic management (Babatunde & Adebisi, 2012).
Responsibilities and duties of a strategic manager
The strategic manager is the leader of the team engaged in the role of driving the company towards accomplishing its mission. They collaborate the efforts of the team in the formulation and implementation of the strategy. They stay informed on the progress and challenges experienced. The information enables them to keep to the schedules and advice on change of plans due to inevitable situations (Alkhafaji, & Nelson, 2013). Managers are the persons that sell the vision of the company not only to employees but also to the external parties. Strategic managers are required to evaluate and monitor the progress made in implementing strategies. Through their monitoring, they can advise on deviations and the impact that it has and the changes that would be necessary.
Importance of strategic management planning
Strategic management planning enables companies to stay focused on the long-term goals. They do not stay stuck on current issues and forget their ultimate reason for existence that would lead to the probable downfall of the organization. Innovative ideas are derived by understanding the environment that the company is operating. Environmental analysis continually allows the entity to understand the nature of the market and never to underestimate the abilities of their competitors. The entity can respond to changes in the market as they had been foreseen through active engagement as opposed to reacting to a situation when it occurs. In a market, with high volatility and uncertainty, the value of strategic planning cannot be downplayed in a bid for companies to become market leaders and keep up with competition (Nedelea, & Paun, 2009).
Alkhafaji, A., & Nelson, R. (2013). Strategic Management (1st ed.). Hoboken: Taylor and Francis.
Babatunde, B., & Adebisi, A. (2012). Strategic Environmental Scanning and Organization Performance in a Competitive Business Environment. Strategic Environmental Economic Insights – Trends And Challenges, 64(1), 24-34.
Karami, A. (2016). Strategy formulation in entrepreneurial firms (1st ed.). London: Routledge.
Nedelea, S., & Paun, L. (2009). The Importance of the Strategic Management Process in the Knowledge-Based Economy. Review Of International Comparative Management, 10(1), 95-105.
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