Page 15 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 1: Introduction to Strategic Management

8. Delegating strategic planning to a consultant rather than involving all managers Notes
9. Failing to involve key employees in all phases of planning
10. Failing to create a collaborative climate supportive of change
11. Viewing planning to be unnecessary or unimportant

12. Becoming so engrossed in current problems that insufficient or no planning is done
13. Being so formal in planning that flexibility and creativity are stifled.

Task Name a few companies that went down due to poor strategic management.
What went wrong with them?

1.7 Strategic Management Process

Developing an organisational strategy involves four main elements – strategic analysis, strategic
choice, strategy implementation and strategy evaluation and control. Each of these contains
further steps, corresponding to a series of decisions and actions, that form the basis of strategic
management process.
1. Strategic Analysis: The foundation of strategy is a definition of organisational purpose.
This defines the business of an organisation and what type of organisation it wants to be.
Many organisations develop broad statements of purpose, in the form of vision and
mission statements. These form the spring – boards for the development of more specific
objectives and the choice of strategies to achieve them.
Environmental analysis – assessing both the external and internal environments is the
next step in the strategy process. Managers need to assess the opportunities and threats of
the external environment in the light of the organisation’s strengths and weaknesses
keeping in view the expectations of the stakeholders.
This analysis allows the organisation to set more specific goals or objectives which might
specify where people are expected to focus their efforts. With a more specific set of objectives
in hand, managers can then plan how to achieve them.
2. Strategic Choice: The analysis stage provides the basis for strategic choice. It allows
managers to consider what the organisation could do given the mission, environment and
capabilities – a choice which also reflects the values of managers and other stakeholders.
(Dobson et al. 2004). These choices are about the overall scope and direction of the business.
Since managers usually face several strategic options, they often need to analyze these in
terms of their feasibility, suitability and acceptability before finally deciding on their
direction.

3. Strategy Implementation: Implementation depends on ensuring that the organisation has
a suitable structure, the right resources and competencies (skills, finance, technology etc.),
right leadership and culture. Strategy implementation depends on operational factors
being put into place.

4. Strategy Evaluation and Control: Organisations set up appropriate monitoring and control
systems, develop standards and targets to judge performance.

LOVELY PROFESSIONAL UNIVERSITY 9