Literature Review on Strategic Management

Process -:

Wheelen and Hunger (1987) say that strategic management is a set of managerial
decisions and actions that determines the long-run performance of an organization. It
includes environmental scanning (both external and internal) strategy formulation
(strategic or long- range planning), strategy implementation and evaluation and control.
The study of strategic management emphasizes the monitoring and evaluation of external
opportunities and threats in light of an organization's strengths and weaknesses.

Kenneth(1999)
The strategy of an organization consists of the moves and approaches made by
management to produce successful performance of an organization. Strategy is
management’s game plan for the business. Management develops strategies to guide how
an organization conducts its business and how it will achieve its target objectives.
Without a strategy, there is no cohesive action plan to produce the intended results. Core
management functions are crafting and implementing a strategy for the business. Good
management is exhibited by good strategy and good implementation. Powerful execution
of a powerful strategy is a proven recipe for business success. The standards for judging
whether an organization is well managed are based on good strategy-making combined
with good strategy execution.

Key Words: environmental scanning, strategy, monitoring, strategic planning,

evaluation, implementation.

Michael Porter Porters(2004) Theories as Applied in Current Decision Making Introduction

The single most important intellectual asset in any company outside of its employees is its
strategy. Leaders are defined by the strategies they create and hard work can disintegrate when
strategic plans are not properly implemented. Developing consistency in strategy is very
important to proper implementation of the core elements. Ultimately the strategy must become
centrally integrated and externally oriented in order to define how the business will achieve its
objectives.
 Five tasks of Strategic Management
Figure I

1 2 3 4 5
Defining Setting Crafting a Implementing Evaluating
the Objectives strategy to and executing performance
business achieve the the strategy and
and performance initiating
developing Objectives corrective
a mission adjustments

Arnold and Majluf (2007) say that none of the previous four tasks are one-time
exercises. New circumstances always crop up that make corrective adjustments desirable.
Long-term range or plans may need to be altered, the business redefined and
management’s vision of the organization's future course narrowed or broadened.
Performance targets may need raising or lowering in light of past experience and future
prospects. Strategy may need to be modified because of shifts in long-term direction.,
because new objectives have been set or because of changing conditions in the
environment.

The search for even better strategy is also continuous. Sometimes an aspect of
implementation does not go as well, as intended and changes have to be made. Progress
typically proceeds unevenly-faster in some areas and slower in others. Some tasks get
done easily; others prove nettlesome; implementation occurs through the pooling effect of
many administrative decisions about how to do things and how to create stronger fittings
between strategy and internal operating practices. Budget revisions, policy changes,
reorganization, personnel changes and revised compensation practices are typical ways of
trying to make the chosen strategy work better. A company’s mission, objectives, strategy
or approach to strategy implementation is never final. Evaluating performance, reviewing
changes in the surrounding environment and making adjustments, are normal and
necessary parts of the strategic management process.

Hosiery, Chambermaids, Onerous, & Saudi (2010). Strategy is largely defined by adaptation
to a constantly changing marketplace which seems to get more and more complex. True strategy
is about making complex bets and following up with hard choices. Historically stable markets
allowed managers to rely on complex strategies that were built on future predictions. But in the
current fast moving marketplace and with the rise of the millennial billionaires, opportunity
seizure may require a different approach.
Eisenhower and Soul (2011)

contend that to survive in a complicated high velocity market space, managers should choose
simple rules over complicated plans. The simple rules will allow the managers to move quickly
in order to capture opportunities more quickly. Customers will spend their money with the
company that has the superior value proposition. Martin (2014) rule two is strategies do not have
to be perfect. There should be some risk in the strategy and boards should not prevent
management from taking risks in setting strategy. This actually weakens the strategy. And the
final rule is to test the logic of your thinking.

Write down the desired outcome when setting strategy. The logic should be compared to real life
events in order to identify areas of improvement along the way. Despite the criticality of strategic
management o an organization’s success, a McKinney survey found that most executives are not
happy with their strategic planning process. And companies that have formal strategic planning
processes have the highest level of satisfaction with corporate strategy development

Peter (2014) noted that the firm must acknowledge and respond to the external opportunities and
threats to survive. The contemporary school focuses on understanding the internal firm.
Collaboration and differentiation are important to winning with a contemporary strategy.
Multicast (2009) provides an interesting perspective on strategic management and its relationship
to time. Strategic planning is most often thought of in terms of planning for the long term future
of the firm. The author encourages management to also consider history, the present, and the near
future in making strategic planning decisions.

When new management enters a firm, history is often seen as a negative since historical
perspectives are sometimes viewed as a hindrance to instituting change. But in reality, history
can be an asset to strategic planners. For example, if he company has a culture of continuous
improvement, good employee loyalty and commitment, and good learning ability, then this is a
sustainable competitive advantage that should be retained. If new management is not aware of
the firm’s culture then they may make decisions like terminating senior employees therefore
damaging the firms culture and competitiveness.

Passage of time can also be a weakness if management has become complacent and they are not
questioning the way their firm operates or making suggestions for efficiency gains. Improving
the learning capabities.
Why is strategic management an ongoing process?

Because each one of the five tasks of strategic management requires, constant evaluation
and a decision with things as they are or to, make changes - the process of managing
strategy is ongoing. Nothing is final as all prior actions are subject to modification as
conditions in the surrounding environment change and ways for improvement emerge.
Strategic management is a process filled with constant motion. Changes in the
organization's situation, either from inside or outside or both, constantly drive strategic
adjustments.

The task of evaluating performance and initiating corrective adjustments are found in
both the end and the beginning of strategic management cycle. The match of external and
internal events guarantees revision in the four previous components as this will be
imperative sooner or later.

The advantages of strategy management include: -

• Providing better guidance to the entire organization on the crucial point of what it
is we are trying to do and what to achieve;
• Making managers more alert to the minds of change, new opportunities and
threatening developments;
• Providing managers with a rationale to evaluate competing budget requests for
investment capital and new staff rationale that argues strongly for steering
resources into strategy - supportive, results - producing areas;
• Helping to unify the numerous strategy-related decisions by managers across the
• organization;
• Creating a more proactive management posture and counter-acting tendencies for
• decisions to be reactive and defensive.

Conclusion-:

Business history shows that high performing enterprises often initiate and lead, not just
react and defend. They launch strategic offensive to secure sustainable competitive
advantage and then use their market edge to achieve superior financial performance.
Aggressive pursuit of a creative, opportunistic strategy can propel a firm into a leadership
position, paving the way for its goods and services to become the industry standard.

In a dynamic and uncertain environment, strategic management is important because it

can provide managers with a systematic and comprehensive means for analyzing the
environment assessing their organization's strengths and weakness and identifying
opportunities for which they could develop and exploit a competitive advantage. The
strategic management process includes eight steps – identifying the organization's current
mission, objectives and strategies, analyzing the environment, identifying opportunities
and threats in the environment, analyzing the organization's resources, identifying the
organization's strengths and weaknesses, formulating strategies, implementing strategies
and evaluating results.
 References-:

• Andrews K.R. 1987. The Concept of Corporate Strategy. Richard D. Irwin.

• Gluck F.W. 1985 A Fresh Look at Strategic Management. Journal of Business

Strategy, 6 No. 2 pp 4 - 21.

• Hax A.C, 1991. The Strategic Concept and Process: A Pragmatic Approach.
Prentice Hall.

• Eisenhower and Soul (2011) Strategies for Change: Logical Incrementalism. Richard D
Irwin.

• Peter (2014) Successful Electronic Changeovers Depend on Daring, Springfield

Business Journal No. 15.