The Three Step Process of Strategic Management
In order to sustain in competitive times, a company needs to focus on three areas analysis, decisions and actions. These three ongoing activities in any organisation form a part of strategic management. These steps of strategic management are described as below:
1. Analysis: It consists of analyzing the goals and environment (internal as well as external) in which a company exists. This process of strategic management involves the involvement of top leaders of a company. Under this process, the leaders make a competitive comparison of industries to set a realistic goal.
2. Decision Making: Analysis under strategic management, leads to the next step which is about taking sound decisions which can lay the foundation of growth for the company.
3. Taking Actions: The second step of decision making is incomplete if the decisions are not acted on. Necessary actions are always required to implement the strategies. Actions are implemented with the help of resources which are allocated to different uses.
The three process of strategic management as described above are on-going. In addition to these steps, the process of strategic management, also consist of finding answers to some fundamental questions which relate to setting the vision and mission of the company. For an example, one of the most fundamental questions for which a company must seek answer is that how should an organisation position itself in the market? Should it position itself as a producer of low cost good or an innovative firm or in any other way which confirms with the vision and mission of the organisation? The answers to these questions help the company to have some competitive advantage.
Strategic management is not about operational effectiveness i.e. performing same activities that the competitors are performing, even if your company performs them in a better way. Strategy means being different than others, it implies performing the activities in a different way than the rivals. Strategic management leads to better focus of employee’s effort and thus align the performance of employees with the mission of the company. The focussed performance can also be rewarded by sound performance appraisal, which serves as a motivation for your employees to do better.
The strategic management and performance appraisal however; can be done only by professionals. If you and the leaders in your organisation posses a good work experience than you can set the right goals for your company. However; if you are a start up with little experience in corporate world, than you can take the help of companies who can assist you in drawing your business goals and objectives. Such companies also undertake the activities to coach your managers and prepare them to meet the goals so set with accuracy.
Strategic business planning, setting KPI’s and sound performance appraisal system can help you manage the goals of the company and make it lead the competition.
1. Analysis: It consists of analyzing the goals and environment (internal as well as external) in which a company exists. This process of strategic management involves the involvement of top leaders of a company. Under this process, the leaders make a competitive comparison of industries to set a realistic goal.
2. Decision Making: Analysis under strategic management, leads to the next step which is about taking sound decisions which can lay the foundation of growth for the company.
3. Taking Actions: The second step of decision making is incomplete if the decisions are not acted on. Necessary actions are always required to implement the strategies. Actions are implemented with the help of resources which are allocated to different uses.
The three process of strategic management as described above are on-going. In addition to these steps, the process of strategic management, also consist of finding answers to some fundamental questions which relate to setting the vision and mission of the company. For an example, one of the most fundamental questions for which a company must seek answer is that how should an organisation position itself in the market? Should it position itself as a producer of low cost good or an innovative firm or in any other way which confirms with the vision and mission of the organisation? The answers to these questions help the company to have some competitive advantage.
Strategic management is not about operational effectiveness i.e. performing same activities that the competitors are performing, even if your company performs them in a better way. Strategy means being different than others, it implies performing the activities in a different way than the rivals. Strategic management leads to better focus of employee’s effort and thus align the performance of employees with the mission of the company. The focussed performance can also be rewarded by sound performance appraisal, which serves as a motivation for your employees to do better.
The strategic management and performance appraisal however; can be done only by professionals. If you and the leaders in your organisation posses a good work experience than you can set the right goals for your company. However; if you are a start up with little experience in corporate world, than you can take the help of companies who can assist you in drawing your business goals and objectives. Such companies also undertake the activities to coach your managers and prepare them to meet the goals so set with accuracy.
Strategic business planning, setting KPI’s and sound performance appraisal system can help you manage the goals of the company and make it lead the competition.
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