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Tuesday, April 7, 2015

Strategic Management | Describe the strategic management process and identify the six stages in the process






Describe the strategic management process and identify the six stages in the process.



Robbins / Coulter, MANAGEMENT, 12th edition, Pearson, 2014


This is a guidance answer ... your actual answer during the exam should be longer than this answer ...

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  1. The strategic management process is a six-step process that encompasses strategy planning, implementation, and evaluation. The first four steps describe the planning that must take place.

    Step 1: Identifying the Organization's Current Mission, Goals, and Strategies - Every organization needs a mission—a statement of its purpose. Defining the mission forces managers to identify what it's in business to do. These statements provide clues to what these organizations see as their purpose.

    Step 2: Doing an External Analysis: Managers do an external analysis so they know, for instance, what the competition is doing, what pending legislation might affect the organization, or what the labor supply is like in locations where it operates. In an external analysis, managers should examine the economic, demographic, political/legal, sociocultural, technological, and global components to see the trends and changes. Once they have analyzed the environment, managers need to pinpoint opportunities that the organization can exploit and threats that it must counteract or buffer against. Opportunities are positive trends in the external environment; threats are negative trends.

    Step 3: Doing an Internal Analysis - This provides important information about an organization's specific resources and capabilities. After completing an internal analysis, managers should be able to identify organizational strengths and weaknesses. Any activities the organization does well or any unique resources that it has are called strengths. Weaknesses are activities the organization does not do well or resources it needs but does not possess.

    The combined external and internal analyses are called the SWOT analysis, which is an analysis of the organization's strengths, weaknesses, opportunities, and threats. After completing the SWOT analysis, managers are ready to formulate appropriate strategies—that is, strategies that (1) exploit an organization's strengths and external opportunities, (2) buffer or protect the organization from external threats, or (3) correct critical weaknesses.

    Step 4: Formulating Strategies - As managers formulate strategies, they should consider the realities of the external environment and their available resources and capabilities in order to design strategies that will help an organization achieve its goals. The three main types of strategies managers will formulate include corporate, competitive, and functional.

    Step 5: Implementing Strategies - Once strategies are formulated, they must be implemented. No matter how effectively an organization has planned its strategies, performance will suffer if the strategies are not implemented properly.

    Step 6: Evaluating Results - The final step in the strategic management process is evaluating results.

    Robbins / Coulter, MANAGEMENT, 12th edition, Pearson, 2014
    www.pearson.co.uk

    This is a guidance answer ... your actual answer during the exam should be longer than this answer ...

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  2. Strategies Helps Managers to plan properly by guiding them to make operational decisions.

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