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Stages of Strategic Management

    It is conventional that,  strategic management is result of planning development from financial planning , to prediction / forecast planning , to strategic planning. Strategic management is a managerial process on upper levels in the organization within quality execution what they planed  , for realizing the organization's aims and objectives.

            Strategic management is initiative process and action more than just planning for work. Its managerial process which targeting to execute the organization mission through management and directing the organization relation with its environment.

First : Strategic management levels

      the strategic management as a feature of  management world, it changes continuously because changing and development is a nature of life specially economic, markets and business organizations life . Life always develops in all fields, strategic management should have to develop on different levels according to the development of life.

          Levels of Strategic Management :

1. Corporate : What direction are we going and what business(es) are we in or do we want to be in?

2. Business :  How are we going to compete in our chosen business(es)?

3. Functional : What resources and capabilities do we have to support the corporate and competitive strategies?

The first level: ( Corporate Level ) the strategic management of the organization (the company / the source organization).

1.         In this level the strategic management performs planning for all of activities related to the organization formulation mission , determines its strategic objectives , provides the necessary resource and formulate the strategic planning , depend on analysis of internal and external environment .

2.         Resources distribution between strategic business units should be concerned in this level, realizing the coordination and integration in activities and process of these units.

3. Corporate – Level  Managers Consists of :

       a. Chief Executive Officer ( CEO ) .

        b. Other senior executive .

        c . The board of directors .

        d.  Corporate staff .

     The CEO is the main general manager at this level . The CEO strategic role is oversee the development of strategies for the total Org. This role includes :   

1. Determining the mission and aims of the Org .

2. Determining what businesses it should be in .

3. Allocating resources among the different businesses .

4. Formulating and implementing strategies that span individual businesses .

5. Providing leadership for the Org .

6. Provide a link between the people who oversee the strategic development of firm and those who own it ( stockholders ) .

  Stakeholders impact analysis follows these steps :

1.  Identify stakeholders .

2.  Identify interests concerns of stakeholders .

3.  Identify what claims stakeholders are likely to make on the organization .

4.  Identify the stakeholders who are most important from the organization’s perspective .

5.  Identify the resulting strategic challenges .

  Characteristics of Strategic Management  Decisions , Corporate-level decisions :

1. Greater risk ,cost , and profit potential .

2. Greater need for flexibility .

3. Longer time horizons .

The second level: (Business Level) strategic management in the level of strategic business units :

1. What is meant by strategic business units? its any part of the business Org.  which  shall deal with it in the future , with considering it as productive centers have resources and special equipment , but it is integrated with the  other units within comprehensive strategic plan of the Org

2. In this level strategic management operates the following :

a.  Formulate and execute the strategic plan which concerns of all (business unit ) according to analysis of  the environmental changes - internal and external- of the unit.

b. Determine the unit capabilities ,  and to realize the strategic required objectives.

3. In this level the strategic plan answer the following questions:

a. What is the main specifications for products or the required services to be produced by the unit .

b. Who is the main consumers and agents or the industrial purchasers of unit products .

            c. How the unit can face the competition in the local environment.

d. How the unit can realize the best sameness for the Org.  philosophy and its basic principals , to support the upper levels efforts , for

           achieving the comprehensive strategic objectives effectively.

4. the business Org. facing different local environments, it should deal with these environments , because these environments are vital field for business

movement and Org. profit , to adapt with this situation, it created the strategic management ( strategic business units ) to deal with any unit in isolation with its concerned environment .

5.  Example: ABB company for electronic engineering and power, composed of 1300 strategic business units with independent legal character, it's found in 140 countries,  6500 workers are  there,     every unit has special branch plan, suitable with the local environment circumstances and changes.

The result:  Connection of all strategic business units with comprehensive strategic plan of the Org.  , without  any contravene / contradiction  with its activities.

Business – Level  Managers : In multiple business company , the business – level consists of heads of individual business units within the Org. and their staff . In single – industry company , the business and   corporate – level are the same . A business unit is an organizational entity that operates in a distinct business area . Typically , it is self – contained and has its own functional departments , for example ( its own finance , purchasing , production , & marketing departments ) .

 Business – Level Managers : Within most companies , business units are referred to as DIVISIONS . The main strategic managers at the business – level are the heads of the divisions . Their strategic role is to translate general statements of direction and intent from the corporate – level into concrete strategies for individual businesses . Thus , while corporate – level general managers are concerned with strategies that span individual businesses , business – level managers are concerned with strategies that are specific to particular business  .

The third level: Strategic management in functional level:

1.  Business units usually consist of functions , such as   production ,

  personnel , marketing and financial /  accounting … etc ,  so the  organization must has clear strategy for all that functions .

2.  There is strategic plan for marketing, and another one for production…etc.. every strategic plan undertakes to evaluate  politics , programs and procedures , which concern  execution of any function , without interring into direct supervision details on daily activities for these functions .

Functional – Level  Managers : Functional managers bear responsibility for specific business functions , such as human recourses , manufacturing , materials management , marketing , and research and development ( R&D ) . They are not in a position to look at the big picture . Nevertheless , they have a strategic role , for their responsibility is to develop functional strategies in manufacturing , marketing , R&D , and so on , that help fulfill the strategic objectives set by business and corporate -  level general managers .

       Manufacturing managers are responsible for developing manufacturing strategies consistent with the corporate objective of being first or second in that industry . Moreover functional managers provide most of information that makes it possible for business and corporate – level general managers to formulate realistic and attainable strategies .

Functional- level decisions belong to :

1. Implement overall strategy .

2. Involve action-oriented operational issues .

3. Are relatively short range and low risk .

4. Incur only modest costs .

Risks of Strategic Management :

•         Time involved may negatively impact operational responsibilities of managers

•         Lack of involvement of strategy makers in strategy implementation may result in shirking of responsibility for strategic decisions

•         Potential disappointment of employees over unattained expectations requires managerial time and training .

Fourthly : Stages of Strategic Management

The first stage: strategic formulation / design / planning

It is strategic planning stage, in which activities are achieved  according to the following sequence:

1.         Determine the vision, mission and the aim of the organization.

2.         Determine the strategic objectives.

3.         Study and analyze the internal environment.

4.         Study and analyze the external environment.

5.         Study the alternatives / the available       alternatives.

6.         Select  options / suitable alternatives.

7.         The strategic decision.

The second stage: the strategic implementation  

The execution stage begins due to the strategic decision which results from strategic planning process (strategic plan) , This stage contains the following activities:

 1. Create the organizational atmosphere, builds the suitable organizational structure and redistributes the authorities and responsibilities.

2. Set up plans, polices and work systems.  

3. Specify and distribute the physical and human resources.

4. Determine activities and execution periods.

5. Prepare, train and develop the human resources, in the direction strategic execution.

6. Develop the administrational leaderships.

The third stage: Review and evaluate the strategy

It’s the last step , here we should consider that strategy is set mainly for  developing and amending the future. The evaluation is continual process since the beginning of plan  and through the execution. This stage contains the following activities :

1. Review the internal and external factors.      

2. Measure the performance through comparative of actual results with expected objectives  from applying the strategy in all periods.

3. Make corrective procedures after determining the deviation.