Strategic Management Process Models(David’s model)

By: Muhammad Waseem

Strategic management process

According to David

◦ the art and science of formulating, implementing, and evaluating cross-functional decisions that

enable an organization to achieve its objectives

Stages of Strategic Management

Strategy formulatio

n

Strategy implementatio

n

Strategy evaluation

Stages of Strategic ManagementStrategy formulation

◦ includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue

Strategy implementation ◦ requires a firm to establish annual objectives, devise policies, motivate employees, and allocate

resources so that formulated strategies can be executed◦ often called the action stage

Stages of Strategic Management

Strategy evaluation

◦ reviewing external and internal factors that are the bases for current strategies, measuring

performance, and taking corrective actions

Steps of Strategic ManagementoDevelop vision and missionoSwot analysisoEstablish long term objectiveoGenerate, evaluate and choose strategiesoImplement strategiesoMeasure and evaluate performance

Develop vision and mission A vision statement tells people

◦ Where we want to go◦ What we want to become◦ What we want to accomplish◦ Why it is important

And a mission expresses the organization’s:◦ Purpose - the needs we exist to address◦ Business - what are we doing to address these ◦ Values - what principles or beliefs guide our work

Swot analysis A SWOT analysis (alternatively SWOT matrix) is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. Strengths: characteristics of the business or project that give it an advantage over others.

Weaknesses: characteristics that place the business or project at a disadvantage relative to others.

Opportunities: elements that the project could exploit to its advantage. Threats: elements in the environment that could cause trouble for the business or project.

Establish long term objective An objective is defined as the end results of planned activity. In other words, it means that objective is referred to as the outcomes that a company wish to achieve from the activities planned. An objective should state on the activities that are needed to be completed and the timeline on when it should be accomplished. Some of the focus areas for a company when setting their objectives include profitability, efficiency, growth, shareholder wealth, utilization of company resources, reputation, market share, etc. An organization is considered to be successful in achieving its corporate objectives when the company manage to fulfill its missions.

Establish long term objective For instance, Toyota US has set a definite objective to improve the quality of its

products, enhance efficiency, minimize the cost of production, and increase its

productivity to cater to the different customer needs in its market. Toyota US has

invested on research and development activities to produce high quality cars.

Besides that, the company also emphasis on the importance of human resource

as the company believes that satisfied employees will produce high quality

products.

Generate, evaluate and choose strategies

corporate strategy describes company's direction in terms of its general attitude

towards growth and the management of its various businesses and product

lines. From the definition, we can say that corporate strategy is the company

mission and objectives that must be accomplish such as profit maximization

from the product or service. Corporate strategies typically fit within the three

main categories of stability, growth and retrenchment.

Implement strategies strategy implementation is defined as the process by which strategies and

policies are put into action through the development of programs, budgets, and

procedures. In other words, it means that strategy implementation is the

process of carrying out the strategy which has been formulated.

Measure and evaluate performance

evaluation and control is defined as the process in which corporate activities and

performance results are monitored so that actual performance can be compared

with desired performance. In other words, evaluation and control is the

evaluation made to compare the strategy that a company applied is success or

not to determine the company performance levels.

Strategic Management Process Models

MUHAMMAD WASEEM

 Glueck's Model

William F. Glueck developed several models of strategic management based on the general decision-making process.The phases of this model are as follows:* Strategic managements elements: "...to determine mission, goals, and values of the firm and the key decision makers."* Analysis and diagnosis: " ...to search the environment and diagnose the impact of the threats and opportunities."

* Choice: ...to consider various alternatives and assure that the appropriate strategy is chosen."

* Implementation: "...to match plans, policies, resources, structure, and administrative style with the strategy."* Evaluation: "...to ensure strategy and implementation will meet objectives."

As major contribution to the strategic management process, Glueck considered two elements: "enterprise objectives" (the mission and objectives of the enterprise," and "enterprise strategists" (who are involved in the process).

Moreover, Glueck broke down the planning process into analysis and diagnosis, choice, implementation, and evaluation functions. This model also treats leadership, policy, and organizational factors.

However, Glueck omitted the important medium- and short-range planning activities of strategy implementation.

The Schendel And Hofer Model

Dan Schendel and Charles Hofer developed a strategic management model, incorporating both planning and control functions.Their model consists of several basic steps:(1) goal formulation,(2) environmental analysis,(3) strategy formulation,(4) strategy evaluation,(5) strategy implementation, and(6) strategic control.

According to Schendel and Hofer, the formulation portion of strategic management consists of at least three subprocesses:

- environmental analysis,

- resources analysis,

- and value analysis.

Resource and value analyses are not specifically shown, but are considered to be included under other items (strategy formulation).

The Thompson And Strickland ModelThompson and Strickland developed several models of strategic management.According to Thompson and Strickland strategic management is an ongoing process: "nothing is final and all prior actions and decisions are subject to future modification."This process consists of five major five ever-present tasks:1. Developing a concept of the business and forming a vision of where the organization needs to be headed.2. Converting the mission into specific performance objectives.3. Crafting a strategy to achieve the targeted performance.4. Implementing and executing the chosen strategy efficiently and effectively.5. Evaluating performance, reviewing the situation, and initiating corrective adjustments in mission, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities.

Thompson and Strickland suggest that the firm's mission and objectives combine to

define "What is our business and what will it be?" and "what to do now" to achieve

organization's goals. How the objectives will be achieved refers to the strategy of firm.

In general, this model highlights the relationships between the organization's mission, its

long- and short-range objectives, and its strategy.

Korey's Model

Modern theorist and writer, Jerzy Korey-Krzeczowski, founder and President Canadian School of Management, have proposed an integrated model of strategic management.Korey's model consists of three discrete major phases:(1) preliminary analysis phase,(2) strategic planning phase,(3) strategic management phase.Further, Korey states that the systematic planning consists of at least four continuous sub-processes:(1) planning studies, (2) review and control, (3) feasibility studies, and (4) feasibility studies.The planning is ongoing process, thus all these subprocesses are integrated and they are interacted each other; creating the fully dynamic model.

Korey's model incorporates both planning and control functions. Moreover, it describes not only long-range strategic planning process, but also includes elements of medium and short range planning.

Korey's model is based on existing models; but it differs in content, emphasis, and process.

This model adds several facets to the planning process that the reader has not seen in other models. Some of these are: development of educational philosophy, analysis of the

value systems, review of community orientation and social responsibilities, definition of

planning parameters, planning studies, and feasibility studies.

Using Kory's model for strategic planning provides both new direction and new energy to the organization

Schematic ModelAs an aid in envisioning the strategic management process in this paper.This model was developed by Peter Wright, Charles Pringle and Mark Kroll(1994). It consists of five stages:1. Analyze the environmental opportunities and threats. 2. Analyze the organization's internal strengths and weaknesses. 3. Establish the organizational direction: mission and goals. 4. Strategy formulation. 5. Strategy Implementation. 6. Strategic Control. The model begins with an analysis of environmental opportunities and threats. The organization is affected by environmental forces; but the organization can also have an impact upon its environment.The organization's mission and goals are linked to the environment by a dual arrow. This means that the mission and goals are set in the context of environmental opportunities and threats.

The next arrow depicts the idea that strategy formulation sets strategy implementation in

motion. Specifically, strategy is implemented through the organization's structure, its

leadership, and its culture.

Then, the final downward arrow indicates that the actual strategic performance of the

organization is evaluated.

The control stage is demonstrated by the feedback line that connects strategic control to

the other parts of the model.