Strategic management is when you identify and develop strategies developing strategies for employees to follow in order to perform better and achieve a competitive edge. If the profitability of the company is higher than before and other companies, then it means that you have achieved a competitive edge. Today, we’ll discuss what is a strategic management process in detail.
What is a strategic management process?
We’ve already discussed strategic management in detail, you can check it out. It’s time to discuss what is a strategic management process. Anyways, the strategic management process outlines the strategy of the company. It is such a process that allows employees and managers to choose a set of strategies for the company that would help you to perform better.
It’s important to keep in mind that strategic management is a gradual process where you have to evaluate the performance of the company with competitors, and keeping fixing the goals and objectives in order to achieve a competitive edge.
Most importantly, the strategic management process offers a wider perspective to the managers and employees of the company. They learn that how they can comprehend and fit their job into the organizational plan and how it would be relevant to the employees. However, it’s the art of developing a link between the organizational objectives and their personal goals. They should feel that meeting the company’s objectives is improving their personal abilities.
When employees could see the correlation between their personal goals and the company’s objectives, then it would increase their satisfaction, commitment level, and trustworthiness. When it happens, then they can see the impact of environmental changes in their job, and the reaction and response of the company in terms of strategic management.
Steps of Strategic Management Process
Some of the main steps of the strategic management process are as follows;
Strategic Mission & Goals
First of all, the management asses company’s market position relevant to its mission and goals. The mission and vision statement outlines the direction, aspiration, and value of the company that the senior management has set and leading it. However, goals and objectives are the desired end results that the company plans to achieve through operations and procedures. The goals of the mission statement could be short-term or long-term. Usually, they’re measurable and short-term.
Environmental analysis is the process of gather data, scanning and scrutinizing the data, and delivering the information to the management for strategic purposes. It would help the company to analyze various internal and external factors that are impacting the company. After launching the process, the management should continually scan the process in order to make improvements.
Strategy formulation is when you choose the best course of action for the company to follow in order to meet its objectives. After carefully conducting the environmental analysis, the management creates functional, business, and corporate-level strategies. Some of the main steps in the strategy formation stage are as follows;
- Developing the company’s mission statement
- Scanning the external environment
- Analyzing the industry
- Conducting the internal analysis of the company
- Alternative strategies
- Strategic options
Here the company implements the strategy which it has chosen at the formulation stage. The implementation process comprises designing, structuring, allocating resources, managing human resources, and devising the decision-making process. Some of the main steps of implementing the strategy are as follows;
- Determining annual objectives
- Developing functional strategies
- Developing policies
The company should have an institutional culture, leadership, and structure.
Evaluation & Control
The evaluation step in the strategic management process evaluating the company’s performance, assessing internal and external steps, and applying corrective actions if need. It makes sure that the company has achieved its objecting by implementing the company’s strategy.
Problems of Strategic Implementation Process
It’s difficult to implement strategic management, that’s why the strategy implementation process fails. Some of the main problems of the strategic implementation process are as follows;
The teamwork outlines goals, KPIs, and other project details. It means no one takes ownership of the goals and project and it creates confusion. Ultimately, there’s no person there to take the responsibility.
Poor Reporting System
The reporting system is very inconsistent in the process. It requires you to conduct meeting regularly throughout the organization and brings their attention to the goals.
Low availability of Data
A common phrase heard is “it’s difficult to collect data,” it’s more of an excuse than a problem. If you properly use the human resources and sufficient tools, then you would have access to the data to evaluate your performance and make a decision.
No Link b/w Reward & Success
The linkage between a company’s goals and rewards is very important because it motivates them to perform better in their jobs and daily tasks.
Conclusion: What is a Strategic management process?
After an in-depth study of what is a strategic management process, we’ve concluded that the strategic management process plays a significant role in helping the company of achieving its objectives.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.