Strategic well as adapt to the “rapidly changing
Strategic Management Process With the continual evolution within the business market, it is apparent that companies need to develop and improve their strategies to remain afloat. Lager companies typically pay competitive salaries to hire a Chief Executive Officer who will develop a plan to accomplish its goals. This plan is commonly referred to as “strategic management. ” According to Wheelen and Hunger (2010), strategic management refers to decisions and actions taken to establish the long term performance of a company (p.
3). Undoubtedly, without a well formulated strategy any company will set to fail.This short paper will list the primary components of strategic management process and importance.
In addition, it will provide a real-life example to describe the process. Components and importance Strategic management includes four primary components. Said components are environmental scanning, strategy formulations, strategy implementation, evaluation, and control. The process begins with environmental scanning as its purpose is to “identify strategic factors” within internal and external environments (Wheelen and Hunger, 2010, p. 16).A common and simple method to prepare an environmental scanning is through an SWOT analysis of the company.
With the SWOT analysis set into place, strategy formulation follows as the second step in the process. Strategy formulation “is the development of long-range plans” that include “defining the corporate mission, specifying achievable objectives, developing strategies, and setting policy guidelines” (Wheelen and Hunger, 2010, p. 17). Strategy implementation is the “day-to-day decision in resource allocation” and often conducted by “middle- and lower-level mangers” (Wheelen and Hunger, 2010, p.
7). Evaluation and control are tools to monitor current versus desired performance. Although the aforementioned simplified the main components of strategic management process in actuality it is more complex. Nonetheless, its importance is huge as it yields several benefits for the company. Benefits include providing a “clearer sense of strategic vision for the firm” (Wheelen and Hunger, 2010, p.
6). Also it helps companies remain focus on what is most clearly important and forecast as well as adapt to the “rapidly changing environment” (Wheelen and Hunger, 2010, p. 6).
In addition, strategic management and its process improves the company and helps obtain desired goals. Citigroup and its process In 2007, Citigroup’s CEO at the time, Charles Prince, announced that the company will be restructured (Coyne, 2007). After performing an environmental scanning, the CEO realized that the current processes in place were simply not working. Therefore, Prince formed a new team composed of different people and formulated a new strategy.
In conjunction with this new team, they realized that using different processes for different purposes was more effective than applying a standard process for all.The new plan was rolled out and implemented; said plan included cutting approx 17,000 jobs and $2 billion in expenses. From 2007 to date, Citigroup continues to evaluate and control performance. Monitoring methods include scorecards completed in a monthly basis and three performance reviews completed yearly (Citi, 2011). The aforesaid demonstrates that it is fundamental for companies to develop a strong strategic management process. Not only for the quantifiable benefits but also qualitative. The business market is becoming more competitive as time goes by and so should companies.
References Citi (2011). CitiGroup Inc. Corporate Governance Guidelines .
Retrieved from www. securedsite. citigroup/employeeportal Wheelen, T. L. , & Hunger, J. D. (2010).
Concepts In Strategic Management and Business Policy (12th ed. ). Retrieved from The University of Phoenix eBook Collection database.
entry. Coyne, K. P.
(2007, April). Strategic Planning Vs. Citi Planning. Forbes, (April 2007), 1. Retrieved from http://www.
forbes. com/2007/04/11/coyne-citi-planning-oped-cx_kpc_0412coyne. html