November 3, 2018
Strategic management refers to a branch of management that deals with an organization’s strategic objectives. This may include the development of the organization’s vision, outlining its operational objectives and coming up with and implementing the organization’s strategies. It may also include the formulation and application of deviation corrective measures where necessary. Strategic management process should not be confused with strategic planning process, a related but completely different branch of management. This article seeks to answer the question “what is strategic management process” Before venturing deeper, first let us define strategic management process.
The Philosophy of the Strategic Management Process
To define the strategic management process, look at it as a philosophical approach to doing business. This is a blanket terminology that refers to a process by which managers come up with, and implement an operational strategy that grants the organization a competitive advantage. The upper management of an organization must first use data analytics to think strategically, then use the strategic management process to put the thought into action.
So, what is strategic management process?
Strategic management process is a continuous culture of appraisal that a business adopts to outdo the competitors. Simple as it may sound, this is a complex process that also covers formulating the organization’s overall vision for present and future objectives.
The way different organizations create and realize their management strategies differ. As a result, there are different models of SMP that the organization can adopt. The right model depends on various factors including:
- The existing culture of the organization.
- Market dominance of the organization.
- Leadership style.
- The organization’s experience in creating and implementing SMPs.
- Industry and competition.
Why is Strategic Management Process Important?
The primary purpose of strategic management process is to help the organization achieve a sustainable strategic competition in the market. When properly conceived and implemented, SMP creates value for the organization by focusing on and assessing opportunities and threats, then leveraging its strengths and weaknesses to help it survive, grow, and expand. Strategic management process can help a business achieve this by:
- Acting as the reference for any major decisions of the organization.
- Guiding the business to chart its future and move in that direction. SMP involves formulating the organization’s goals, fixing realistic and achievable objectives, and ensuring that they are all aligned with the company’s vision.
- Assisting the business to become proactive, not reactive. With the SMP, the business can analyze the competitor’s actions vis-à-vis market trends and come up with the steps that must be taken to compete and succeed in the market.
- Preparing the organization for any potential challenges and explore possible opportunities that the business must pioneer in. The strategic management process steps also involve identifying the best ways to overcome the challenges and exploiting new opportunities.
- Ensuring that the organizations copes with the competition in a dynamic environment and survives in an uncertain market.
- Helping in the identification and maximization of the organization’s competitive advantages and core competencies. These are responsible for the business’ survival and future growth.
Steps of Strategic Management Process
There are five strategic management process steps that must be followed in their chronological order.
- Goal setting
This is essentially clarifying the organization’s vision. The vision will include short-term and long-term objectives, the processes by which they can be accomplished, and the persons responsible for implementing each task that culminates in the set goals.
- Analysis
Analysis involves gathering the data and information that is relevant to accomplishing the set goals. It also covers understanding the needs of the business in the market and examining any internal and external data that may affect the organization’s goals.
- Strategy Formulation
A business will only succeed if it has the resources required to reach the goals set in the first step. The process of formulating a strategy to achieve this may involve identifying which external resources the business needs to succeed, and which goals must be prioritized.
- Strategy Implementation
Since the purpose of strategic management process is to propel an organization to its objectives, an implementation plan must be put in place before the process is considered viable. Everyone in the organization must understand the process and know what their duties and responsibilities are in order to fit in with the organization’s overall goal.
- Evaluation and Control
The evaluation and control actions for the strategic management process include performance appraisal as well constant review of both internal and external issues. Where necessary, the management of the organization can implement corrective actions to ensure success of the SMP.
In order for a business’ efforts to have the most impact on a business’ bottom line, strategic management process must be employed. This will also go a long way in helping a business to survive stiff competition in the market.
