Strategic management process

Strategic management functions consist of specific methods and techniques used in the different stages of the strategic management process: analysis, planning, implementation and strategic control. Summary of various management activities (functions) used in the strategic management process is presented below. See also for broader description of the methodology and detailed description of strategic management functions.

Formulating business strategy

1. Determining the purpose of company.
2. Creating a mission and vision:
   • setting the vision of future state of organization,
   • selecting the methodology for mission formulation,
   • formulation of mission statement,
   • preparation of a portfolio of projects for implementation of the mission,
   • implementation of the mission and objectives of the organization.
3. Formulation of rules defining the competitive position in the company's political, legal, economic, social, technological and natural environment:

File:Strategic management functions.png

File:Strategic management functions.png

Fig. 1. Strategic management functions

1. #* determination of reasons for the existence in business environment,
   • identification and analysis of environmental variability (i.e. using PEST analysis),
   • forecasts of future state of the environment,
   • identification of opportunities and threats,
   • determination of the company resources and its changes,
   • simplification of company policy,
   • implementation of company policies.
2. Developing a strategy for the company as a whole
   • identification of policy options,
   • deciding on the criteria for evaluation of policy options,
   • analysis and selection of optimal policy option,
   • translating policy to functional strategy of company.

Strategic market segmentation

1. Identification of the strategic segments.
2. Developing a coherent market segment strategy.
3. Creating a decentralization policy.
4. Designing and implementing policy and strategy for chosen segments.

Creating comprehensive strategic control system

1. Defining assumptions for strategic control.
2. Selection of criteria for the evaluation.
3. Implementing control methods and techniques.
4. Improving the strategic control model.

References

• Daft, R. L., & Macintosh, N. B. (1984). The nature and use of formal control systems for management control and strategy implementation. Journal of Management, 10(1), 43-66.
• Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
• Galbraith, J. R., & Kazanjian, R. K. (1986). Strategy implementation: Structure, systems, and process (Vol. 1). New York, NY: West Publishing Company.
• Hill, C., Jones, G., & Schilling, M. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
• Homburg, C., Krohmer, H., & Workman, J. P. (2004). A strategy implementation perspective of market orientation. Journal of Business Research, 57(12), 1331-1340.
• Mintzberg, H. (1990). The design school: reconsidering the basic premises of strategic management. Strategic management journal, 11(3), 171-195.
• Pearce, J. A., Robinson, R. B., & Subramanian, R. (2000). Strategic management: Formulation, implementation, and control. Columbus, OH: Irwin/McGraw-Hill.
• Porter, M. E. (1981). The contributions of industrial organization to strategic management. Academy of management review, 6(4), 609-620.