344034: Strategic ManagementIntroductionIn this paper we propose to critically analyse some significant elements of strategic management and the role and importance of environmental tools in successfully implementing the functional constituents of ‘strategic management’. In the course of our analysis we shall consider the practical use of environmental scanning; whether the tools used for such scanning can be distinguished in terms of the use made of the information that they produce; and the circumstances under which particular tools are to be used. It is proposed to bring the whole gamut of strategic management under the scrutiny of ‘environmental scanning’.
As a necessary prelude to an examination of the topic in this manner, we begin with an in-depth analysis of the concept and elements of strategic management. Strategic Management – what it is To begin with, a ‘definition’ of strategic management can be that it is a ‘managerial course of action’; “a process through which the Chief Executive Officer (CEO) and the executive team of officers specify the organization’s objectives, calibrate policies and plans to achieve these objectives, allocate resources in order to implement them and give the necessary direction to the organization to carry out its activities effectively and efficiently”.
In short, strategic management can be ‘defined’ as a “combination of strategy formulation and strategy implementation. ” (see www. webarticles. com/Business/Management/Strategic-management). Formulating strategy is the function of strategic planning. The plan should incorporate the objectives of the enterprise and the ways of achieving the objectives. The objectives may have a time dimension, in that some objectives are to be achieved in the long term, some in the medium term and some others in the short term.
The long term objectives are spelled out in the ‘vision statement’, the medium term objectives in the ‘mission statement’ and the short term objectives in an analytical ‘current situation’ statement. Additionally the plan should provide an environmental-situation analysis which should cover both internal and external environment as well as the micro and macro aspects of the different elements in the environment. A strategic management plan would incorporate an appropriate and feasible course of action after assessing the present situation of the enterprise in the light of it past history and experience in order to enable it to reap benefits in the future.
Strategic management recalibrates “traditional management activities such as budgeting, planning, monitoring, marketing, reporting, and controlling into a broader context, taking into account the external environment, internal organizational capabilities, and the organization’s overall purpose and direction” (Morrison and Wilson). Elements of Strategic ManagementAccording to Morrison and Wilson, 1996, the following diagram (reproduced from their article) depicts “the building blocks of for a comprehensive strategic management model – external analysis, internal assessment, strategic direction, strategic plans, implementation, and performance evaluation” (Morrison and Wilson).
They emphasize that an important “principle of strategic management is that plans must be made on the basis of what has happened, is happening, and will happen in the world outside the organization with a focus on the threats and opportunities these external changes present to the organization”. The external environment includes political, economic, social, technological, and environmental trends and developments outside the organization,