The strategic management process involves definition and implementation of the organizational strategy. It helps different levels’ managers make strategic choices that thus enabling organizations achieve its objectives. There are five steps in the strategic management process, which include goal-setting, analysis, formulation of a strategy, implementation of the strategy, and strategy monitoring.
The goal-setting stage involves defining the objectives of the organization. The organization has then to identify the strategies to use to accomplish these objectives. Applying the concept of division of labor and specialization is the best way for achieving the set goals, which involves work allocation according to one’s areas of proficiency. The aim is to establish the organization mission and vision.
Analyzing is the second stage and involves gathering information, market research, and an in-depth study of the organization including its competitors. It is through the knowledge about the current market condition and competitors that industries understand areas and activities they have to adopt or avoid. In addition, industries have to analyze their internal strengths and weaknesses, use appropriate strategies to avoid external threats, and utilize the available opportunities.
After analysis, the management has to decide the best course of action to accomplish the objective and achieve the organizational purpose. These actions involve strategy formulation. Managers have to determine the amount of resources the organization has and the sources of extra resources the organization might need in strategy formulation. It is through conducting environment scanning that managers can formulate the business, corporate and functional strategies.
The next step involves implementing the strategy. The strategy is in this step put into action and should work as intended. The main way that management can make a strategy to succeed is through encouraging effective communication among different levels of the organization. The duties and responsibility of staff members have to be made clear. In short, strategic implementation involves designing the organization’s structure, developing decision-making process, distributing resources, managing human resources.
There is no point to formulate and implement a strategy if the management does not put the control system in place to evaluate the process. This stage presents the final step of the strategic management and involves strategic follow-up, evaluation, and control. The activities in this step include measuring performance, monitoring internal and external issues and taking corrective actions. It is through effective control of the formulated strategy that the organization meets its objectives.
Illustration of three dimensions of strategy implementation by the General Motors case under Alfred Sloan
Vertical dimension is the main dimension of strategy implementation general Motors under Alfred Sloan illustrates. When Alfred Sloan was the chairman and the president of General Motors Corporation, he used his professional management to allocate the most suitable personnel in implementing different strategies. This action motivated the staff, which made General Motors one of the most successful corporations in the world by then.
Alfred Sloan also applied horizontal dimension to realign the company’s operation and group together products and departments that had a common relationship. There was also the decentralization of operations and centralization of administration. These actions contributed a lot in the growth of the company.
General Motors under Alfred Sloan also illustrate clearly the multifunctional or multi-business dimension. Sloan strategic management made the company spread its operations to various parts of the world despite the 1940s great Depression.