DEFINING STRATEGIC MANAGEMENT
The term strategic management is used in many colleges and
universities as the subtitle of the fundamental course in business
administration, Business Policy, which when adopted in an entrepreneurial
course becomes Enterprise Policy.
Strategic Management can be defined as the
art and science of
formulating, implementing, and evaluating cross-functional decisions that
enable an organization to achieve its objectives
. As this definition implies,
strategic management focuses on integrating management, marketing,
finance/accounting, production/operations, research and development, and
computer information systems to achieve organizational success.
STAGES OF STRATEGIC MANAGEMENT
The strategic management process consists of three stages: strategy
formulation, strategy implementation, and strategy evaluation.
organization’s external opportunities and threats, determining internal
strengths and weaknesses, establishing long-term objectives, generating
alternative strategies, and choosing particular strategies to pursue. Strategy
formulation issues include deciding what new businesses to enter, what
businesses to abandon, how to allocate resources, whether to expand
operations or diversify, whether to enter international markets, whether to
merge or form a joint venture, and how to avoid a hostile takeover.
Because no organization has unlimited resources, strategists must decide
which alternative strategies will benefit the firm most. Strategy formulation
decisions commit an organization to specific products, markets, resources, and
technologies over an extended period of time. Strategies determine long-term
competitive advantages. For better or worse, strategic decisions have major
multifunctional consequences and enduring effects on an organization. Top