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strategic management

Extracts from this essay...

Introduction

"Compare and contrast different perspectives of strategic management, and how and why is 'context' important?" 1. Introduction The assignment is written to provide argument over the statement mentioned above. To understand this statement fully it is crucial to understand the meaning of strategic management. Therefore, this assignment, first of all presented the definition of strategic management and its elaboration. Later, different perspectives of strategic management are discussed in the assignment. Final section elaborates on the importance of 'Context' for strategic management. 2. Strategic Management Johnson and Scholes (2005) stated that strategic management is the set of decisions and actions resulting in formulation and implementation of strategies designed to achieve the objective of an organization. It involves attention to no less than nine critical areas: 1. Determining the mission of the company, including broad statements about its purpose, philosophy, and goals. 2. Developing a company profile that reflects internal conditions and capabilities. 3. Assessment of the company's external environment, in terms of both competitive and general contextual factors. 4. Analysis of possible options uncovered in the matching of the company profile with the external environment. 5. Identifying the desired options uncovered when possibilities are considered in light of the company mission. 6. Strategic choice of a particular set of long-term objectives and grand strategic needed to achieve the desired options. 7. Development of annual objectives and short-term objectives and grand strategies needed to achieve the desired options. 8. Implementing strategic choice decisions based on budgeted resource allocations and emphasizing the matching of tasks, people, structures, technologies, and reward systems.

Middle

It has spun off its parts division under the name Visteon. Its prestige brands, with the exception of Lincoln, are managed through its Premier Automotive Group (www.answers.com, 2005). ii. Issue-Based (or Goal-Based) Planning/Model As per Dobson et. al. (2004), those organizations that start with this "basic" planning approach generally adapt to more thorough and more effective type of planning. The planning process is as under: a. "SWOT" analysis (Strengths and Weaknesses and Opportunities and Threats) so as to measures the performance. b. Strategic analysis to spot main objectives and goals c. Devise major strategies (or plans) to achieve goals. d. Design/update vision, missions and image of the organization. e. Formulate action plans to achieve objectives. What resources are needed and roles and responsibilities for implementation) f. Account for issues, targets, strategies and programs, updated task and vision, and plans of actions in a Strategic Plan document attaching SWOT, etc. g. Make the yearly Operating Plan document (from year one of the multi-year strategic plan) h. Make and plan the Budget for year one (allocation of funds needed to fund year one) i. Manage the organization's year-one operations j. Regular monitoring, evaluation, reviewing and updating of the Strategic Plan document For example, Nirula's, a fast food chain of India, has high levels of international focus in their current activities. Nirula's wants to expand to other countries, for this purpose the company has to conduct a more detailed study that will contain detailed analysis of the target countries.

Conclusion

The models generally describe the logical or analytical steps many businesses actually use in their strategic activities. However, it does not describe the procedures or routines necessary to carry out each step. As a result, no model should be seen as providing a prescription for the way strategic planning should be done. Therefore, when the strategic management model is used it should be remembered that the model builders are recommending the general approach they believe will provide a sound basis for strategic planning, not a model they are certain will lead to the best results (Johnson and Scholes, 2005). The strategic management process undergoes continual assessment and subtle updating. While elements in the basic model rarely change, the relative emphasis each element receives varies with decision-makers and the environments of their companies. 6. Conclusion The complexity and sophistication of business decision making requires strategic management. Managing various internal activities according to the external environment is only part of the modern executive's responsibilities. Strategic management only helps to achieve the goals of the business entity. Different strategic models discussed above are only the tools in the hands of the business executives to determine mission, vision, goals, objectives and the ways to achieve these. No single model is completely suitable for a particular business entity. To deal effectively with all decision making problems and to affect the ability of a company to increase profitability, the executives design strategic management processes that will facilitate the optimal positioning of the firm in its competitive environment. Such positioning is possible because these strategic processes allow more accurate anticipation of environmental changes. Different strategic approaches are to be mixed to gain maximum.

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