Description
Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a prerequisite to attempting to manage others.
Phases of Strategic Management
Strategic management is not a static concept, but an ongoing process. The strategic management process encompasses four distinct phases. In order to succeed, a strategy must succeed in each phase. It is important, therefore, that anyone planning a business's strategy understands these four phases and the roles that they play
1. Formulation
Strategic management begins with the formulation phase, where the firm's management develops an overall strategy for achieving the firm's objectives. Objectives may include, for example, increasing market share or reducing costs. The top management team typically is saddled with the responsibility of developing the firm's overall strategy. They may, however, seek the input of line managers and front-line workers as they develop their strategy.
2. Implementation
With a clear strategy formulated, managers can then go about implementing it. Strategies are usually implemented from the top down. To begin with, the top management team will inform line managers about the strategic changes, and line managers will, in turn, pass this information on to their subordinates. Many strategies fail due to poor implementation, but managers can avoid this by carefully introducing the new strategy and listening to any employee concerns about the changes.
3. Evaluation
When a strategy is implemented, it will hopefully be successful, but managers cannot assume that every strategy will be. They will, therefore, need to measure the success of a strategy. To measure this success, the strategy must be evaluated against the firm's goals. A gap analysis is a useful tool for evaluating the success of a strategy. This measures the gap that exists between the desired results and a firm's actual results.
4. Modification
Sometimes, strategies are successful on the first attempt, but more often than not, there is room for improvement. If the evaluation of the strategy shows that the firm has not achieved all its desired goals, then it is necessary to modify the strategy. For example, if the firm used a costleadership strategy to increase sales, but the sales actually decreased, then the firm would need to modify this strategy, perhaps using a premium-pricing strategy instead.
doc_301838855.docx
Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a prerequisite to attempting to manage others.
Phases of Strategic Management
Strategic management is not a static concept, but an ongoing process. The strategic management process encompasses four distinct phases. In order to succeed, a strategy must succeed in each phase. It is important, therefore, that anyone planning a business's strategy understands these four phases and the roles that they play
1. Formulation
Strategic management begins with the formulation phase, where the firm's management develops an overall strategy for achieving the firm's objectives. Objectives may include, for example, increasing market share or reducing costs. The top management team typically is saddled with the responsibility of developing the firm's overall strategy. They may, however, seek the input of line managers and front-line workers as they develop their strategy.
2. Implementation
With a clear strategy formulated, managers can then go about implementing it. Strategies are usually implemented from the top down. To begin with, the top management team will inform line managers about the strategic changes, and line managers will, in turn, pass this information on to their subordinates. Many strategies fail due to poor implementation, but managers can avoid this by carefully introducing the new strategy and listening to any employee concerns about the changes.
3. Evaluation
When a strategy is implemented, it will hopefully be successful, but managers cannot assume that every strategy will be. They will, therefore, need to measure the success of a strategy. To measure this success, the strategy must be evaluated against the firm's goals. A gap analysis is a useful tool for evaluating the success of a strategy. This measures the gap that exists between the desired results and a firm's actual results.
4. Modification
Sometimes, strategies are successful on the first attempt, but more often than not, there is room for improvement. If the evaluation of the strategy shows that the firm has not achieved all its desired goals, then it is necessary to modify the strategy. For example, if the firm used a costleadership strategy to increase sales, but the sales actually decreased, then the firm would need to modify this strategy, perhaps using a premium-pricing strategy instead.
doc_301838855.docx