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ͻ In 1950s the Gordan Howell report, recommended that
business education be made broader in nature and include
a capstone couse in an area called c!"
ͻ Business policy emphazied the development of skill in
identifying, analyzing and solving real world problems in a
wide range of substantive business areas.
ͻ This course cane to include consideration of the total
organization and its enviornment. E.g. Social
responsibilities and ethics, politics, legislative and
economic factors.
ͻ Broader emphazies prompted the leaders to change the
course name to ͚2 2# c#2"$
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ͻ The last part of the definition states that the purpose of strategic
managment is to ensure that an
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ʹ that is, to its operational surroundings.
Organizational environments are constantly changing and organizations must
be modified accordingly to ensure that organizational goals can be attained.
ͻ In the past, the strategic management process was heavily
handled by Planning departments within organizations.
ͻ The strategic managment process of today tends, especially
in smaller organizations, to be dominated by the chief
executive officer (CEO) of the company. The CEO is
considered responsible for the success of the process.
ͻ The CEO who is successful in this area generally designs a
strategic managment process that involves members from
many different organizational area and levels. E.g. Board of
directors, corporate management and divison managment,
along with the CEO.
Environmental analysis is the process of monitoring the organization͛s
environment to identify both present and future threats and opportunities.
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There are two indicators of the direction in which an organization is moving
i.e. Organizational mission and organizational objectives. Mission is the
purpose for which, or reason why, an organizational exists. Objectives are the
targets the organization has chosen.
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Strategy is defined as a course of action aimed at ensuring that the
organization will achieve its objectives. Strategy formulation, then, is the
process of designing and selecting strategies that lead to the attainment of
organizational objectives.
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This step involves putting into action the logically developed strategies that
emerged from the previous steps of the strategic management process.
Without the effective implementation of strategy, organizations are unable
to get benefits of performing organizational analysis, establishing
organizational direction, and formulating organizational strategy.
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