Strategic management is the process that organizations use to define their strategies and execute them to achieve their goals. The strategic management process comprises various steps that define how organizations assess their current situation, devise their strategies, and implement them. Without a well-defined strategic management process, organizations can suffer from fragmented and uncoordinated efforts that fail to meet their strategic objectives.
Evaluation of the External Environment
The first step in the strategic management process is to evaluate the external environment. Organizations must evaluate the industry they operate in and the broader macroeconomic factors that affect their operations. This evaluation provides insight into the opportunities and threats that organizations face and the major trends that might impact their performance.
Evaluation of the Internal Environment
Organizations must also evaluate their internal environment to determine their strengths and weaknesses. This evaluation must cover all aspects of the organization, including operations, employees, and culture. Understanding the organization’s internal strengths and weaknesses helps set actionable goals and objectives that align with the organization’s vision.
Formulation of Strategy
With a clear understanding of its external and internal environment, an organization can then formulate its strategy. The strategy must align with the organization’s values and its mission and vision statements. The strategy must also be specific, measurable, achievable, relevant, and time-bound.
Development of Tactical Plans
Once the strategy is in place, the organization must develop tactical plans that outline specific actions that will be taken to implement the strategy. The tactical plans must be specific and actionable, and they should define clear timelines, assignments, and budgets for each task.
Implementation of Plans
With the tactical plan in place, the organization can then begin to implement the plans. This stage involves executing the tasks outlined in the tactical plans and managing the resources required to complete them.
Monitoring of Progress
During the implementation phase, it’s essential to monitor progress continually. This stage involves tracking execution against the predefined timelines and measuring performance against the defined metrics. Monitoring progress helps identify opportunities for improvement and ensures that the organization remains on track to meet its strategic objectives.
Evaluation of Performance
Once the plan is complete, the organization can then evaluate its performance. This stage involves reviewing the entire strategic management process, from the evaluation of the external and internal environment to the implementation of the tactical plans. The goal is to determine whether the organization achieved its goals and objectives and whether any improvements could be made.
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Adaptation and Modification
If the evaluation of performance reveals areas for improvement, the organization must adapt and modify its strategies and plans accordingly. This stage involves revisiting the entire strategic management process and refining it to better align with the organization’s objectives.
The strategic management process is essential for any organization that wants to achieve its goals and objectives. The process involves evaluating the external and internal environment, formulating a strategy, developing tactical plans, implementing the plans, monitoring progress, evaluating performance, and adapting and modifying the process as needed. Following this process helps ensure that the organization remains focused on its goals and stays on track to achieve them.