STRATEGIC MANAGEMENT PROCESS

Taxonomy related to the Strategic Management Process

Taxonomy related to the Strategic Management Process

A Brief Overview of the Important Concepts and Components

The term strategic management process refers to the means by which critical human, technical, financial, and informational resources are obtained, combined, and discarded so that an organization can survive and prosper. Cummings & Wilson (2003) mentions typically, upper-echelon managers take responsibility for this process, but progressive managers involve the entire organization as much as possible in this process. Because there are many misconceptions about this process, it is helpful to examine what it is not before further exploring what it is.

Strategic management is an externally oriented philosophy of managing an organization that links strategic thinking and analysis to organizational action (Cummings & Wilson, 2003). As a continuous, explicit philosophy of managing an organization, strategic management

* Provides a framework for thinking about the “business”

* Creates a fit between the organization and its external environment

* Provides a process of coping with change and organizational renewal

* Fosters anticipation, innovation, and excellence

* Facilitates consistent decision making

* Creates organizational focus

* Represents the process of organizational leadership

Strategic management provides an ongoing philosophy for developing and managing the plans and actions of the organization. It seeks to orchestrate a fit between the organization's external environment (political, regulatory, economic, technological, social, and competitive forces) and its internal situation (culture, organization structure, resources, products and services, and so on) (Pettigrew, 2003). In some cases orchestrating the fit may mean responding to external forces, whereas in other cases the organization may attempt to actually shape its environment (change the rules for success). Change in health care has been quite dramatic and often disruptive. When change occurs, new opportunities and threats emerge. Strategic management is an organization's mechanism for understanding and constructively managing change. It is the leadership process for reinventing or renewing the organization.

How the Theories Apply To the Topic of Strategic Management

There are many theories of strategic management. Strategic management is seen to have been founded in the 1950s and 1960s in the United States. It is there that the Ford and Carnegie reports on the standardization of business school curricula recommended a capstone course in “business policy” that would consider how the many functional activities of a firm could be best organized as a whole. And it is there that the first strategic management experts or gurus were identified (Pettigrew, 2003).

Alfred Chandler's Strategy and Structure is ...