HCSM 511 Strategic Management Lesson 1

Study Notes

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 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.

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.

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.

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.

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.