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5. The Strategic Management Process

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Principles of General Management
This chapter is in the book Principles of General Management
The strategic thinking phase of strategic management requires areview at the level of each business the organization operates, and if thereis more than one, at the corporate or parent level as well. We begin thischapter by examining the corporate level, and then move to the businessor divisional level. Many of the lessons for and concerns of the generalmanager at one level are shared by the general manager of the other.Corporate strategy formulation consists of looking toward the future,providing direction to the firm beginning with the industries in which thefirm chooses to compete when appropriate, and setting suitable goals andobjectives for expected corporate financial performance. Strategic thinkingmust be followed by a detailed operational planning system that enhancesthe likelihood that the firm’s operating units will achieve the desired re-sults. With appropriate goals and objectives set and strategies for achievingthem in place, the firm must decide how it should be organized to providethe best environment for achieving the desired results.The Strategic Management ProcessBusinesses operate through a continuous process of setting goals,assessing performance, taking corrective action, and monitoring results toensure improved performance. Members of management must detect prob-lems and identify new opportunities through an effective control systemand their personal knowledge of the business, as illustrated in Exhibit 5-1.5THE STRATEGIC MANAGEMENT PROCESS85
© Yale University Press, New Haven

The strategic thinking phase of strategic management requires areview at the level of each business the organization operates, and if thereis more than one, at the corporate or parent level as well. We begin thischapter by examining the corporate level, and then move to the businessor divisional level. Many of the lessons for and concerns of the generalmanager at one level are shared by the general manager of the other.Corporate strategy formulation consists of looking toward the future,providing direction to the firm beginning with the industries in which thefirm chooses to compete when appropriate, and setting suitable goals andobjectives for expected corporate financial performance. Strategic thinkingmust be followed by a detailed operational planning system that enhancesthe likelihood that the firm’s operating units will achieve the desired re-sults. With appropriate goals and objectives set and strategies for achievingthem in place, the firm must decide how it should be organized to providethe best environment for achieving the desired results.The Strategic Management ProcessBusinesses operate through a continuous process of setting goals,assessing performance, taking corrective action, and monitoring results toensure improved performance. Members of management must detect prob-lems and identify new opportunities through an effective control systemand their personal knowledge of the business, as illustrated in Exhibit 5-1.5THE STRATEGIC MANAGEMENT PROCESS85
© Yale University Press, New Haven
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