The Strategic Management Process

In the current business environment, knowledge evolves rapidly and the useful life span of organizational skills is decreasing, which means survival and competitiveness of an organization is linked to its ability to learn and include its findings in their strategic management process. Having cited the criticality of strategic management on the survival of today's business, it is of paramount importance that in this weeks issue I deal on the subject of Strategic Management Process.Key Definitions I would like to start by defining some key words and phrases that are associated with the strategic management process. A Strategy is a company's long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage. Strategic management is the process of identifying and executing the organization's mission by matching its capabilities with the demands of its environment.Strategic planning is the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future (Goodliest, teal, 1992). This definition takes us away from the notion that strategic landing is a staff Job and focuses us more on process that requires senior leaders of an organization to set its strategic direction. Strategic plans are important because strategic planning to a few elite in an organization, it should be noted that there different levels of strategic planning.These are corporate level strategies, business level strategies and functional level strategies. The concept of strategic management builds on the definition of strategic planning, recognizing that although planning is the prelude of strategic management, it is not sufficient if it is not followed by the plowmen and implementation of the plan and the evaluation of the plan in action. Strategic management is therefore a systems approach to identifying and making the neces sary changes and measuring the organization's performance as it moves toward its vision.It is the process where managers establish an organization's long term direction, set specific performance objectives; develop strategies to achieve these objectives in light of all the relevant internal and external circumstances, and undertake to execute the chosen direction. The strategic management process is Hereford a series of steps that formulates the strategic planning, implementation and evaluation. This process is depicted by many model/drawings which basically depict the strategic management steps. Most of these models only differ in to the extent to which they simplify the process but they generally agree on major elements.Strategic Management Process Model Fig. 1 It can be seen from fig 1 above that strategic management process is an iterative process as depicted by the arrows. Strategic planning comprises (see Figure 3-1) the first 5 of 7 strategic management tasks: (1) Defining th e business and developing a session, (2) Evaluating the firm's internal and external strengths, weaknesses, opportunities, and Threats, (3) formulating a new business statement, (4) translating the mission into strategic goals, and (5) formulating strategies or courses of action.The entire 7- Step 1: Define the Current Business Every company must choose the terrain on which it will compete?in particular, what products it will sell, where it will sell them, and how its products or services will differ from its competitors'. Therefore, the most basic strategic decisions managers make involve deciding â€Å"what business† their firms should be in: For instance, in terms of the products or services they'll sell the geographic locales in which they'll sell them, and how they'll distinguish their products or services from competitors'.They ask, â€Å"Where are we now in terms of the business we're in, and what business do we want to be in, given our company's opportunities and thr eats, and its strengths and weaknesses? † Managers then choose strategy to drive the company to achieve the vision. This may be better enshrined in a vision statement as a sort of shorthand to married how they see the business down the road. The company's vision is a general statement of its intended direction that shows, in broad terms, â€Å"what they want to become. Two management gurus, Warren Bennie and Bert Mans say, To choose a direction, a leader must first have developed a mental image of a possible and desirable future state for the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or mission statement. The critical point is that a vision articulates a view of a realistic, credible, attractive future or the organization, a condition that is better in some important ways than what now exists.Visions are usually in longer terms, broader images; managers also formulate mission statements to communicate the purpose of t heir (company) present existence. Whereas visions usually lay out in very broad terms what the business should be, the mission lays out in broad terms what their main tasks are now. The mission statement of the company that I work for is; ‘To be the preferred supplier of electricity regionally and abroad. ‘ The mission statement is, to bring convenience to our valued customers through provision of electricity and related services. ‘ Step 2: Perform External and Internal Audits (Environmental scanning).Strategic planning starts by methodically analyzing external and internal situations. The strategic plan should provide a direction for the firm that makes sense, in terms of the external opportunities and threats the firm faces and the internal strengths and weaknesses it possesses. To facilitate this strategic external/internal audit or environmental scanning, we use SOOT analysis. This involves using a SOOT chart to impel and organize the process of identifying com pany Strengths, Weaknesses, Opportunities, and Threats. When doing internal audits or scan companies should check for their strength and weakness.They should capitalist on their strength to create a competitive advantage in their industry, strengths can be in the form of a hardworking organizational culture which they can ride upon in order to have an edge over other like firms. However companies should also not turn a blind eye on their weaknesses. Weakness doesn't mean that one is incapable but being aware of them calls for a decision to avert them. Weakness can be in the form of lake of strategic objectives that are meant to reduce the effects of the weaknesses. External audits scan for Opportunities and Threats.These can be at micro and macro levels. At macro level businesses should look into the Political, Economic, Social, Technical, Environmental and Legal (PESTLE) environment for threats and opportunities. Step 3: Formulate New Business and Mission Statements In light of the situation analysis (environmental scanning), leaders/managers should determine what their new business should be, in terms of what products it will sell, here it will sell them, and how its products or services will differ from its competitors? This may call for establishing or crafting new Mission and Vision statements to stir the company.Step 4: Translate the Mission into Strategic Goals Saying the mission is â€Å"to provide electricity' is one thing; implementing that mission for your managers is another. The firm's managers need strategic goals. What exactly does that mission mean, for each department, in terms of how we'll boost electricity supply? The Government of Zanzibar has recently adopted a new appraisal system or all parallels, government ministries and institution under its new economic blueprint called JIM-ASSET. The system is called Integrated Results Based Management System.Under this system organizational missions are translated into tangible short-term, mid-ter m and long-term goals which are measurable and specific. Strategic goals are the steps to the envisioned future. Not having them is like sitting for a meeting and coming up with no resolutions or action items. Step 5: Formulate Strategies to Achieve the Strategic Goals Again, a strategy is a course of action. It shows how the enterprise will move from the business it is in now to the business it wants to be in (as laid out by its vision, mission, and strategic goals), given the firm's opportunities, threats, strengths, and weaknesses.The strategies bridge where the company is now, with where it wants to be tomorrow. The best strategies are concise enough for the manager to express in an easily communicated phrase that resonates with employees. These are best described as strategic objectives. Keeping the strategy clear and concise helps ensure that employees all hare that strategy and so make decisions that are consistent with it. Specific performance targets are needed in all areas affecting the survival and success of a company, and they are needed at all levels of management.The act of establishing formal objectives not only converts the direction the company is headed into specific performance targets to be achieved but also guards against drift, aimless activity, confusion over what to accomplish and loss of purpose. Step 6: Implement the Strategies â€Å"What we think, know or believe in is, in the end of little consequence. The only consequence is†¦. What we do. (Hands, 1995). Strategy implementation means translating the strategies into actions and results?by actually hiring (or firing) lines.Strategy implementation involves drawing on and applying all the management functions: planning, organizing, leading, and controlling (POOL). According to Tom Peters and Robert Waterman, a model termed the Seven â€Å"S† Model provides a framework of implementation of a strategic change. Structure changes may have to be made to cope with strategic cha nges, while systems may need also with the new strategic direction. Skills may need to be upgraded or reshuffled properly. Style or culture of management may need also to be readjusted accordingly.All these have their energy directed to achieve the strategic goals (Vision) as depicted on fig 2 above. Step 7: Evaluate Performance Strategies don't always succeed. For example, TN-Holdings failed when it massively rolled out its Subs across the nation in order to be closer to where its customers are. The strategy failed dismally in the following year because of a huge liquidity crunch that is currently bedeviling our economy?because of evaluation management quickly re-strategists and came up with a new business model. Managing strategy is an ongoing process.