Relationship - Business policies do not influence the firm's strategic management, but strategic management can influence the firm's policies.
– If a firm makes a strategic decision to increase profits, for example, the company's policies might change to reflect this may be by requiring managers to reduce spending or limiting contracts to ones above a certain value.
Basic elements of Strategic
Management process
process consists of 3 stages:
- strategy formulation,
- strategy implementation, and
- strategy evaluation.
Strategic Management process
Strategy formulation
Strategy
implementation
Strategy evaluation
Process cont’d…
1. Strategy-formulation includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.
It deals with what new businesses to enter, what businesses to abandon, how to allocate resources, whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover.
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