Strategic Management is a discipline that deals with the long-term development of an organization with a clear-cut vision about organizational purpose, the scope of activities, and objectives.
Four Phases of Strategic management process
There are four indispensable phases of every strategic management process. In diverse companies these phases may have altered nomenclatures and different sequences, nevertheless, the fundamental substance remains the same. The four phases can be listed as below.
1. Environmental Scanning- The Board of Directors and the top management will have to review the current performance. To review, the organization will have to scan the internal environment for strengths and weaknesses and the external environment for opportunities and threats. The internal and external scan helps in selecting strategic factors. These have to be reviewed and redefined in relation to the mission and objectives. All the organizations have missions that define the significance of their existence.
2. Strategy Formulation- Strategy formulation is the process of deciding about the best course of action for accomplishing organizational objectives and therefore, attaining organizational purpose. After conducting environment scanning, managers formulate corporate, business, and functional strategies.
3. Strategy Implementation- Strategy implementation implies putting the chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing the decision-making process, and managing human resources.
4. Strategy Evaluation- Strategy evaluation is the final step of the strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial/corrective actions. Evaluation ascertains that the organizational strategy as well as its implementation is in line with the organizational objectives.
Importance of Strategic management:
In today’s era while discharging his or her professional obligations has to perform several key roles which are also integral components of strategic management. A brief discussion on some of the roles is as follows:
(1) Flawless Disclosure and Reporting: In recent years there has been increased emphasis on the quality of corporate governance reporting and calls for increased transparency.
(2) Communication with Stakeholders: The company also has an important role in communicating with external stakeholders, such as investors, and is often the first point of contact for queries. The company should work closely with the chairman and the Board to ensure that effective shareholder relations are maintained.
(3) Compliances: In the current scenario, a business has to adhere to various laws and regulations failing which may invite various legal hassles. A company is required to ensure compliance with various laws and regulations and for doing so he/she should be conversant with the laws as well as the amendments that take place.
(4) Representation: A Company Secretary has to represent before various tribunals and courts in order to present the legal issue of the company. In India, a company secretary appears before the following legal bodies- National Company Law Tribunal (NCLT); National Company Law Appellate Tribunal (NCLAT); Competition Commission of India (CCI); Registrar of Companies; Tax Tribunals, etc.