Strategic Management Process
What are the components of strategic management process and a company that uses strategic management?
Strategic management can be defined as the decision-making process based on a company’s mission, vision, and corporate values. Leading organizations must conduct a plethora of activities to remain on track with strategic objectives and evolve with internal and external forces. The overriding goal of strategic management is intended to monitor the performance of strategic activities and make changes when necessary. Corporate executives must have a strong skill set in this field to respond to challenges that arise in highly competitive business environments. Using Hewlett-Packard as an example, this essay will describe the strategic management process and highlight its importance for multinational companies.
The strategic management process begins by establishing a mission, vision, and values for a company. These fundamental components will influence decisions of managers at all levels of the company. In particular, top-level managers will need to participate in this process because their decisions have the most widespread impact on organizational culture. The management philosophy adopted by executives will be highly influential to all other managers as well. The second component of the strategic management process is the evaluation of the internal and external environment of the company. Internal factors include issues surrounding human resources, corporate culture, and the availability of resources. External factors include both global and domestic issues a company faces from competitors, regulations, and the economy.
Once the environment has been analyzed, it is necessary to implement functional tactics that will help the firm gain a competitive advantage in the market. These tactics are specific projects will make measurable progress towards strategic goals, such as advertising campaigns, staff restructuring, etc. Finally, it is necessary for managers to monitor the outcome of functional tactics and adapt to unexpected outcomes. Managers must be able to think on their feet and change functional tactics as necessary.
Strategic Management at Hewlett Packard
Hewlett-Packard (HP) is a firm that has come under significant scrutiny over the past several years as a result of declining earnings performance. Recently, the company hired CEO Meg Whitman to lead the company back into industry dominance by using a strategy of revenue stabilization. Rather than seek ambitious growth figures, as many Silicon Valley companies do, HP is entering a phase of staff reduction and cost cutting. Managers at all levels of the company must use strategic management to achieve the goal of becoming a more lean organization. This means department leaders will need to find ways to utilize resources more efficiently and avoid projects that present high levels of risk. Meg Whitman has taken a conservative approach to achieving these goals and has created a 5-year timetable before the company reaches its specific performance targets (Kelleher 2013).
In conclusion, strategic management can be separated in several distinct steps that include the organizational mission, environmental analysis, functional tactics, and control. This process is crucial for companies because it allows large firms to collaborate in a highly dynamic fashion. In the case of HP, these steps are being utilized to increase the overall efficiency of the firm. The strategic management process makes it possible for managers to make sound business decisions in highly complex competitive situations.
Wheelen, T.L., & Hunger, J.D. (2010). Concepts in Strategic Management and Business Policy (12th ed.). Upper Saddle River, NJ: Pearson Education.
Kelleher, K. (2013). Hewlett-Packard Is Not the Lost Cause Everybody Thinks It IS
- Student: D Smith
- Textbook: N/A
- Course: MGT/498