STRATEGIC MANAGEMENT PROCESS 39

Establishing Strategy Strategy

strategic intent Strategic control
formulation implementation
FIGURE 2.1: Elements of
strategic management process
Thus, strategic management has four elements with each element having relevant sub-
elements or activities. These elements and thcir rclevant activities are as followS:
1. Establishing strategic intent
A. Creating vision
B. Formulating mission
C. Setting objectivecs
2. Strategy formulation
A. Environmental analysis
B. Organizational analysis
C. Identification of alternative
strategies
D. Choice of strategy
3. Strategy implementation
A. Activating strategy
B. Structural implementation
C. Behavioural implementation
D. Functional implementation
4. Strategic control
A. Setting control criteria
B. Exercising control
For developing more understanding about strategic management process, we can go
through models of strategic management process.

Models of Strategic Management Process

A model is an abstract representation that illustrates the components ofa phenomenon and
their relationships. From this point of view, a model of strategic management process shows
its various components and their relationships. We are presenting here two models of
strategic management process, one relevant for single-business firms and another relevant
tor multi-business firms. Figure 2.2 presents the model relevant for a single-business firm.
In the case of strategic management process relevant to multi-business firms, the model
of strategic management process given in Figure 2.2 has to be adjusted so that the model
incorporates both corporate-level as well as business-level strategies, as these firms insert
business-level strategy between corporate-level and functional-level strategies as discussed
in the previous chapter. Such firms adopt the model of strategic management process as
shown in
Figure 2.3.
Thus, the model of strategic management process contains the following elements:
establishing strategic intent, environmental analysis, organizational analysis, identifiecation
ot strategic alternatives, choice of strategy, implementation of strategy. and strategic control.
A bricf discussion of these elements is presented here while their details will be presented
in different chapters.

Establishing Strategic Intent. Since organizations are deliberate creations, they have
Some gispecific intent, that is, what they will achieve in future and why they will achieve it. In
dnagement, this is known as strategic intent and consists of three major
 40 STRATEGIC MANAGE
elements vision, mission. and objectives arranged in a hierarchy in that order
represents what an organization would be in future. Mission of an organization S
fundamental unique purpose that sets it apart from other organizations and identifhe
scope of its operations in product and market terms. It also prescribes how the organi the
will deal with its various stakeholders.
are the end results which an
Objectives orBanatie
strives to achieve in future. Strategic intent will be discussed in Chapter 3. rganizatioOn
Establishing strateglc
intent

Environnnental
analysis Organizational
analysis
Setting long-term
Reset if
objectives
required
Identifying alternative
strategies

Reformulate if
required Choice of strategy

Reimplement if
required Implementationa
of strategy

Strategic control

Feedback
FIGURE 2.2: Model of
strategic management process for
2.
Environmental Analysis. The
a
single-business firm
second
management process is the environmental important aspect of the model of
it
operates within the analysis. Since an strategic
competitors, technology, environment which consists of organization is a social system,
legal framework, political many factors such as
organization has to interact framework, and cultural society,
organization has to relate itself continuously
with these factors. In this framework.
have dual effect in interaction
with the
environment. Various factors interaction process, An
of the the
organization process with the
on the
and are also
affected by its organization;
working. owever, the they affect the environment
organlzation rather than effect of working of the
or threats to an otherwise. The
interaction environment is more
organization depending on the
situation. process provides
discussed opportunities
'This will be
3.
Organizational Analysis. What in
and how the
orgganization can takc opportunities or threats
are pased by the
Chanter
ter 4
strengths and
weaknesses. advantages will
depend greatly environment
weaknesses. Through Organizational analysis identifies on the
arco
organizational
weaknesscs so that it can relate analysis, the organization these stren uon's
itself by evaluates its stren
emphasizing its
strengths and
and
overcomi d
its
 41
STRATEGIC MANAGEMENT PROCESS

Business level
Corporate level

SBUs
Establishing strategic Organizational
objectives
intent long-term
objectives

Environmental Environmental

analysis for present analysis for SBUs

and potential SBUs

Organizational and Analysis of SBUs

SBU analysis

Alternative strategies
Alternative strategies

Choice of strategy
Choice of strategy

Implementation
Implementation
of strateg
of strategy

Evaluation of Evaluation of
organization and SBUs' results
SBU results

Feedback
Feedback
multi-business firm
FIGURE 2.3: Model of strategic management process for a

weaknesses also help in identifying the relevant

weaknesses. Organizational strengths and and threats
environmental factors taken for
detailed analysis. Thus, strategic opportunities
both environment analysis as well as organizational analysis.
are determined on the basis of
This will be discussed in Chapter 5.
Alternatives. Interaction of organization
with its environment
4. Identification of Strategic alternatives. This
weaknesses will result in various strategic
in the light of its strengths and
which an organization can relate
number of alternatives through
process may result in large even if all of them
all alternatives cannot be chosen
itself to the environment. However, limit themselves to the serious
managers may like to
produce the same results. Obviously,
alternatives so that they are saved from unnecessary
consideration of some of the strategic the light of strategic
alternatives should be identified in
exercise. Therefore, the strategic analysis,
opportunities and threats generated
through environmental analysis, organizational
discussed in Chapters 6-8.
and organizational strategic
intent. This will be
alternatives leads to the level
identification of various strategic
5. Choice of Strategy. The
some alternatives seriously
and may choose one of the most
where managers can consider
42 STRATEGIC MANAGEMENT
aceeptable. This is the sMage of strategie decision process and all factors relevant for decisin
111.aking are relevant here. Since the particular strategy attempts to affect the organizational
eration in s o n e
predetermined manner, the choice process systematically considers ho.
ach alteTnatire strategy allects the various crilical factors of the
organizational
Huther. the chosen alternative should be acceptable in the light of organizationallunctioning
objectivees
Thus, it
nccessary that the chosen alternative is the best one. In the choice process
is not

pat o m the various

organizational and environmental factors. personal factors play
considerable role becausc strategy reflects the personal values and
This wil be diseussed in Chapter 9.
aspirations of a strategist.

6. Implementation ofStrategy. Once the creative and analytical aspect of strategy

forulation has been settled, the
organization tries to convert the strategy into something
operationally eltective. To bring the result, the strategy should be put to action because mere
choice ot eren the soundest
strategy will not affect organizational activities and achievement
of its objectives. In
strategy implementation, various activities involved are design of
Organization structure to suit the chosen
strategy, effective leadership, development of
funetional policies. development and allocation of
resources, development of effective
information system, etc. This will be discussed in Chapters 10-13.
7. Strategic Control.
Strategic control (also called as strategy evaluation and control) may
be treated a s the last
stage of strategic management process. However, this is an
process and strategic evaluation and control should be taken as ongoing
of action. For effective
the process for future course
implementation
and, consequently, achievement of
organizational
objectives, it is necessary that there is continuous
strateg so that suitable action is taken whenever monitoring of the implementation of the

Models of strategic
something goes wrong.
management depict feedback. Every open system has feedback
mechanism through which it measures its performance on continuous
suitable adjustment in actions for its basis and makes
continuous survival. An
management is applied is an open system. Therefore, organization in which strategic
feedback mechanism. strategic management should have
Strategic control works as feedback mechanism in
management. This will be discussed in Chapter 14. strategic
Implications of Strategic Management as a Processs
Taking strategic management as a process has a number of
taken into account by implications which must be
strategists while going through this process. These implications are as
follows:
1. All the elements of the
process can be thought of in sequential nature. It
cach step must be undertaken in a implies that
sequence, at least for a new strategic action. In
the case of an
existing organization and existing strategic action, these elements
not be put in a very strict may
sequence because the action may be repetitive. For
formulation of strategy, its implementation, and control example,
may go in continuity. Thus,
this becomes a continuous process.
2. The various clements of the proccss are interrelated. The
interrelatedness suggests
cffcct of each factor on others. Thus, there may be lwo-way impact of a
factor; each
affecting others and, in turn, being affected by others. However, the relative force of
this impact may differ for various elements. It may be major in some cases but
minor in other cascs depending on the nature of various external and internal factors.
Further, many such relationships may not be direct but may be indirect.