Strategic Management – questions and answers

1. Define strategic management.

· Strategic management is the process where managers establish an organization’s long-term direction, set the specific performance objectives, develop strategies to achieve these objectives and undertake to execute the chosen action plans.

2. Define the strategy

· Strategy is a blueprint of all the important entrepreneurial, competitive and functional area actions that are to be taken in pursuing organizational objectives and positioning the organization for sustained success and reveals how the targeted results will be accomplished.

3. Enumerate some characteristics of strategic management.

· it is a combination of strategy formulation and strategy implementation;
· it is the highest level of managerial activity;
· it is performed by an organization’s CEO (Chief Executive Officer) and executive team;
· it provides overall direction to the enterprise.

4. What specific entrepreneurial aspects include the strategy formation process?

· searching actively for innovative ways the organization can improve on what it is already doing;
· ferreting out new opportunities for the organization to pursue;
· developing ways to increase the firm’s competitive strength and put it in a stronger position to cope with competitive forces;
· devising ways to built and maintain a competitive advantage;
· deciding how to meet threatening external developments;
· encouraging individuals throughout the organization to put forth innovative proposals and championing those that have promise;
· directing resources away from areas of low or diminishing results toward areas of high or increasing results;
· deciding when and how to diversify;
· choosing which businesses (or products) to abandon, which of the continuing ones to emphasizes, and which new ones to enter or add.

5. What involves the strategic management function?

· The strategic management function directly involves all managers with line authority at the corporate, line-of-business, functional area, and major operating department levels.

6. Which are the steps of strategic management?

· specifying an organization’s objectives;
· developing policies an plans to achieve these objectives;
· allocating resources to implement the policies.

7. How is strategy formulation process referred sometimes?

· determining where you are now;
· determining where you want to go,
· determining how you get there.

8. What involves the strategy implementation?

· allocation of sufficient resources (financial, personnel, time, technology support),
· establishing a chain of command or some alternative structure,
· assigning responsibility of specific tasks or processes to specific individuals groups,
· it also involves managing the process (monitoring results, comparing to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, making adjustments to the process as necessary),
· implementing specific programs, meaning acquiring the requisite resources, developing the process, training, process testing, documentation and integration with legacy process.

9. Which are the components of strategic management?

· defining the organization’s business and developing a strategic mission,
· establishing strategic objectives and performance targets,
· formulating a strategy to achieve the objectives,
· implementing an executing the chosen strategic plan,
· evaluating strategic performance and making corrective adjustments.

10. What is a strategic mission?

· the management’s view of what the organization seek to do and to become over the long-term is the organization’s strategic management.

11. What is formulating a strategy reveal?

· Formulating a strategy reveals how the targeted results will be accomplished – a detailed action plan is necessary to achieve both short-run and long-run results.

12. What means strategy implementation and execution?

· Strategy implementation and execution means putting the strategy into place and getting individuals and organizational subunits to go all out in executing their tasks in the next step. The leadership’s challenge is to so stimulate the enthusiasm, pride and commitment of managers and employees in order to carry out the chosen strategy and to achieve the targeted results.

13. Enumerate the most important strategic objectives.

· the market position and competitive standing the organization aims to achieve;
· the annual profitability targets;
· key financial and operating results to be achieved through the chosen activities;
· any other milestones by which strategic success will be measured.

14. What does strategy formulation involve?

· Strategy formulation involves doing a situation analysis: both internal and external; both micro-environmental and macro-environmental, setting the objectives by crafting vision statements, mission statements, overall corporate objectives, strategic business unit objectives and tactical objectives that suggest the strategic plan.

15. Which are the characteristics of the strategic management process?

· mangers do not necessarily go through the sequence in rigorous lock-step fashion,
· the tasks involved in strategic management are never isolated from everything else that falls a manager’s purview,
· the demands that strategy management puts on the manager’s time are irregular,
· formulating and implementing strategy must be regarded as something that is ongoing and that evolves.