5 Questions
Which managerial function receives preferential attention in strategic management?
Planning
Strategic management involves managers at all levels of the organization.
True
Define 'Business Policy' in the context of strategic management.
Business policy refers to the process of defining the long-term goals of a company as determined by the top-level management.
Strategic management emphasizes the monitoring and evaluation of external opportunities and threats in light of a company's strengths and weaknesses for gaining __________ advantage.
competitive
Match the stages of strategic management with their descriptions:
Strategy formulation = Development of long-term goals and objectives after analyzing the external forces Strategy implementation = Putting plans into action aligned with business programs and budget Strategy evaluation and control = Monitoring and evaluating company's operating performance
Study Notes
Nature of Strategic Management
- Strategic Management is considered the capstone course of all management and business subjects.
- SM is made up of various business courses and gives preferential attention to planning.
- Strategic managers spend more time and effort on planning as compared to other managerial functions.
- Planning starts and ends at the top level, where top-level management sets and defines the overall direction of the company.
- Middle and lower-level managers define their plans and directions according to the overall direction of top-level management.
Business Policy and Strategic Management
- Business policy refers to the process of defining the long-term goals of a company as determined by top-level management.
- Business policy and SM are similar, but SM evaluates forces from both internal and external environments when defining long-term goals.
Definition of Strategic Management
- Strategic Management is a set of managerial decisions and actions that determine the long-run performance of a company, including environmental scanning, strategy formulation, strategy implementation, and evaluation and control.
- Strategic Management operationally refers to a management's continuous rational process of defining the long-term direction of a company after critically evaluating the different competing forces surrounding and within it to gain competitive advantage.
Stages of Strategic Management
- Strategy Formulation: development of long-term goals and objectives of a company after conducting a thorough analysis on the various forces comprising its environment.
- Strategy Implementation: putting plans into action and aligning them with defined business programs, procedures, and budget.
- Strategy Evaluation and Control: monitoring and evaluating the operating performance of a company and taking remedial action.
Evolutionary Phases of Strategic Management
- Short-term Financial Planning Phase: top-level managers require different departments to prepare budgets and targets based on internal information.
- Medium-term Planning Phase: top-level management extends the time period of planning from one year to five years, using internal information and simple analysis.
- Strategic Planning Phase: the planning process is assigned to selected staff, using consultants and internal information to develop a five-year plan.
- Strategic Management Phase: planning involves various inputs and participation from different levels of management, units, and departments, using internal and external information.
Importance and Purpose of Strategic Management
- It provides a clear overall direction, helps overcome competition, achieves a competitive advantage, and attains superior business performance.
- The purpose of Strategic Management is to exploit business opportunities, identify priorities, assist in reducing business risks, and continuously define and redefine direction.
Benefits of Strategic Management
- A clearer sense of strategic vision for the company
- A sharper focus on what is strategically important
- An improved understanding of a rapidly changing environment
- Readily aligned resources for optimal results
- Easier implementation of risk control measures to minimize uncertainty
Learn about the nature of strategic management, its definition, stages, evolutionary phases, and purposes and benefits. This quiz covers the fundamentals of strategic management.
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