Strategic Management Process

Strategic Management Model

Every organization follows a strategic management model The organizational structure of the company is built on the basis of this model The model consist of four distinct steps
Defining organizational mission, objectives or goals Formulation of strategy/ strategic plan Implementation of strategies Strategy Evaluation and Control organizational competence and resources, the environment, various strategy alternatives available, strategy selection criteria etc.

A company has to consider a number of other factors like

SMP is more formal and model driven in large, well-structured organizations with many divisions, products, markets, different priorities investment

Approaches to the Strategic Management Process

Mintzberg (1973) has classified various approaches into three modes.
He call these the three modes of the strategy making process
Enterpreneurial mode Adaptive mode Planning mode

Approaches to the Strategic Management Process

Steiner and others (1982) have classified carious approaches into five form or categories
Formal Structured Approach Entrepreneurial-opportunistic approach Intuitive- anticipatory approach Incremental approach

Approaches to the Strategic Management Process (cont.)

Three modes of Mintzberg and five approaches of Steiner and others have some commonness or similarities in terms of the content
Entrepreneurial-opportunistic Formal-structured and Adaptive

Entrepreneurial-Opportunistic Approach
An entrepreneur is a creative thinker- an individual who combine the roles of an innovator and risk taker Characterized by an active search for opportunities in a generally unfriendly or unfavorable environment In this approach, the focus is on exploiting opportunities against environmental odds rather than problem solving Power rests with one person The strategy is to move forward with unusual leaps or discontinuous growth for achieving entrepreneurial success or profits

Entrepreneurial-Opportunistic Approach
The approach is suitable for organizations in which the key strategists-sometimes a single individual- are visionaries They have completed control over formulation and implementation of a strategy They lead organization front and by example Entrepreneurs/ strategists should have the right vision backed by the right vision backed by the right strategy and resources

Formal Structured Approach

In this approach, the strategic management process depends largely on the planning system Planning is based on
organizational objectives and priorities values of the top management the companys strength and weakness External opportunity and threats (including risks) Alternatives options or strategies available

The roles of planners are, therefore, very important in this approach A basic advantage of this approach is that it generated enough information and employs scientific tools of analysis which enables planners and decision makers to find solutions even in complex situations Decision making is slow Generally discourages new initiative and unconventional decision making

Adaptive Approach
The adaptive approach is essentially a balancing strategy It is more remedial and reconciliatory, and, therefore more reactive than proactive as a decision making process. Decisions are made in sequential and incremental steps necessitated by internal or environmental changes Typically suits large public sector companies, where there is greater focus on accountability than on growth The adaptive approach also suits follower companies (those companies avoid the risk of innovation and are content with producing and selling product that have already been established in the market)

Combination Approach
Many companies realize adopting a single approach exclusively may not be the most judicious course Due to these factors, the strategy management process of the company has to cope with a large number of complex variables or factors, and a single approach may not be sufficient to secure competitive advantage

Strategic Drift

The Learning Organization

Managers should not regard their experience as fixed and unalterable
They should try to develop an organization in which they continually challenge past experience and practices and strive for new, innovative ways