In six months you are to present a complete business plan for Able Corporation to the Strategic Officers Steering Committee (SOS-C). Able Corporation is a US manufacturing company located in Tennessee that builds power tools, lawn mowers, lawn furniture, micowaves, and ranges. All products are manufactured locally and sold through large retailers like Sears, Best Buy, and Wal-Mart. They have sale papers inserted in every Wednesday and Sunday paper. Although they have a thriving business in the US and Canada, Able is trying to break into the global marketplace.
You are to provide a mission statement, operating principles, market analysis, company strengths and weaknesses analysis, one-year, five-year and ten-year strategic objectives, sales forecasts, financial and operational objectives, and pro forma financials.
As a preliminary step in the preparation of the business plan, brainstorm the major elements of the strategic management process. Using the questions below as a guide, provide several bullet points for each major step in the process. These can include insights, issues that need to be addressed, questions that need to be asked, etc.
How would you go about defining the identity of Able Corporation and creating its mission statement? Where would you look for the information? What do you already know about Able that can help?
What principle would you use in order to prioritize the implementation steps needed to accomplish the strategic objectives?
What post implementation and feedback mechanisms would you have in place to evaluate the effectiveness of the process? What measures would you use?
What legal or ethical issues, if any, need to be considered?
MAJOR ELEMENTS OF THE STRATEGIC MANAGEMENT PROCESS
Strategic management is a technique you can use to create a favorable future and help your organization to prosper. To create this favorable future, you must involve your organization's stakeholders (i.e., anyone with a vested interest in achieving your organization's goals) in envisioning the most desirable future and then in working together to make this vision a reality. The key to strategic management is to understand that people communicating and working together will create this future, not some words written down on paper.
Strategic management does not replace traditional management activities such as budgeting, planning, monitoring, marketing, reporting, and controlling. Rather, it integrates them into a broader context, taking into account the external environment, internal organizational capabilities, and your organization's overall purpose and direction.
Strategic management is congruent with the quality movement's emphasis on continuous improvement. Indeed, the emphasis on anticipating the needs of stakeholders is a critical component of external analysis. Certainly organizations that adopt a total quality management philosophy will be better prepared to meet the challenge of competing in the global economic marketplace.
Each organization's experience with strategic management is unique, reflecting the organization's distinct culture, environment, resources, structure, management style, and other organizational features. However, our experience in working with leaders and managers in a variety of organizations indicates that similar questions and concerns develop as organizations implement strategic management. Leaders who have addressed these questions and concerns have developed a common basis of experience that is valuable for those just beginning a strategic management process. This section summarizes some of the things we have learned in working with a variety of organizations. First, let's contrast strategic planning with strategic management.
Strategic planning marks the transition from operational planning to choosing a direction for the organization. Organizations that use a strategic planning model do so because they are sensitive to volatility in the external environment. With strategic planning, the planning focus goes beyond forecasting population shifts and concentrates on understanding changing stakeholder needs, technological developments, competitive position, and competitor initiatives. Decisions, then, are better attuned to the external world. Managers use strategic planning as a management function to allocate resources to programmed activities calculated to achieve a set of goals in a dynamic, competitive environment.
Strategic planning was pioneered by General Electric in the 1960s, widely adopted in the corporate world in the 1970s, and introduced to educational organizations in the early 80s. In the 1970s, however, when strategic planning was being widely applied, external events were still viewed as relatively stable, and planning was typically retrospective, or, at best, present oriented. Times were still good for businesses and other organizations. There was often a tendency for staff to prepare strategic plans--and for management to put them on the shelf. Strategy did not pervade day-to-day operations.
In contrast, strategic management not only creates plans attuned to assumptions about the future, but also focuses on using these plans as a blueprint for daily activities. The chief executive of a strategically managed organization must be able to imbue the organization with a strategic vision so that the organization's members are able to think big (institutionalized strategic thinking) and act big (institutionalized courage). The chief executive must be able to deal with the uncertainty of contemporary events and turn these events to the organization's advantage. Managers must be superb at continually adjusting competitive strategy, organizational structure, and modus operandi as the marketplace demands. In a strategically managed organization, top managers accept change as a permanent condition.
The Strategic Management Model
A key premise of strategic management is that plans must be made on the basis of what has happened, is happening, and will happen in the world outside the organization with a focus on the threats and opportunities these external changes present to the organization. The external environment includes ...