by The strategic management process means defining the organization’s strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance.
Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises it’s competitors; and fixes goals to meet all the present and future competitor’s and then reassesses each strategy.
Strategic management process has following four steps:
Environmental Scanning: Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it.
The process begins with the scanning of the environment, i.e. both the external and internal factors of the organization. The external environment encompasses the political, legal, technological, economic, social and cultural forces that have a great impact on the functioning of the business. The internal factors include the organizational culture, hierarchy, business processes, SWOT analysis, industrial relations, etc. that play a crucial role in performing the business operations.
The role of the HR department is to collect all the information about the immediate competitors their strategies, vision, mission, strengths, and weaknesses. This can be done through the resumes being sent by the candidates working with the other rivalry firm. Through these, HR professionals can identify the workforce, work culture, skills of the staff, compensation levels, reasons for exit and other relevant information about the competing firm.
Strategy Formulation: Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies.
Strategy Implementation: Strategy implementation implies making the strategy work as intended or putting the organization’s chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing decision making process, and managing human resources.
Strategy Evaluation: Strategy evaluation is the final step of 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 makes sure that the organizational strategy as well as its implementation meets the organizational objectives.
These components are steps that are carried, in chronological order, when creating a new strategic management plan. Present businesses that have already created a strategic management plan will revert to these steps as per the situation’s requirement, so as to make essential changes.
Monitor and Evaluation: The final step in the strategic human resource management process is to compare the performance of the HR strategy against the pre-established standards.
At this stage, certain activities are performed to evaluate the outcomes of the strategic decision: establishing the performance targets and tolerance levels, analyzing the deviations, executing the modifications.
Thus, to have an effective HR strategy the firm follow these steps systematically and ensures that the purpose for which it is designed is fulfilled.
Components of Strategic Management Process
Strategic management is an ongoing process. Therefore, it must be realized that each component interacts with the other components and that this interaction often happens in chorus.
