Organizations develop some form of a strategic management plan to enter, maintain, or continue to enhance their position with other competitors within their industry. The primary goal of any organization is to provide a product or service to produce a profit. Though the objective remains the same regardless of the organization, the strategic management processes may vary. Prior to describing the components of a strategic management process, one must first understand the definition of strategic management.
Strategic management is “a set of managerial decisions and actions that determines the long-run performance of a corporation” (Wheelan & Hunger, 2010). The concept of strategic management allows a company to set goals in order to secure sustainability for the future. There are four steps in a strategic management plan: situation analysis, strategy formulation, strategy implementation, and strategy evaluation (Whelan & Hunger, 2010). These steps are performed in this specific order when developing a new plan of management.
Situation analysis involves reviewing the internal and external environment as well as the organizational framework of a company. When focusing on internal environment of a company one must focus on the different working relationships within the organization. To analyze the external environment would include evaluation of relationships the company has with its customers, suppliers, creditors and competitors. (Coulter, 2005). The second step in strategic management plan is strategy formulation. In this step the strategies for the company are formulated focusing on its strengths.
This includes how the strategy was executed and the effectiveness of it. In this step changes are made as necessary. For example if goals were not met the strategy should be modified (Coulter, 2005). The Internal Revenue Service began using a strategic management plan in 1985. They use the plan to fulfill the requirements of the Government Performance and Results Act of 1993. As part of the strategic management process The IRS plans and budgets, develops measures, implements the plan, and evaluates the results (http://govinfo. library. unt. edu/npr/library/studies/caseirsa. pdf).
In conclusion a strategic management plan is a continuous process and is important to the successful future of a company. Strategies will change as objectives and goals change. The use of a strategic management process is important to the sustainability and longevity of a company. References Coulter, M. (2005). Strategic Management in Action. (3rd ed. ). Upper Saddle River, NJ: Pearson Prentice Hall. http://govinfo. library. unt. edu/npr/library/studies/caseirsa. pdf Wheelen, T. L. , & Hunger, J. D. , (2010). Concepts in strategic management and business policy (12th ed. ). Upper Saddle River, NJ: Pearson Education