Strategic Management Essay
To deal effectively with the wide array of factors affecting the ability of a business to grow and prosper, managers need advanced processes they feel will facilitate the optimal positioning of the business in its competitive environment. Such positioning is possible with strategic management because this process improves preparedness for unexpected internal or competitive demands.
Therefore, strategic management is an all-encompassing approach for formulating, implementing and evaluating managerial decisions in a way that permits the business to reach its objectives.
For a strategic management plan to be successful, however, every manager should:
Clearly see the need for change
Be firmly …show more content…
Scenario planning and forecasting helps planners deal with an uncertain future by providing a mechanism for envisioning a range of future scenarios, examine the possible impacts of them, develop a common view of the changing world, and prepare for it. Scenarios sometimes are best used not as a basis for strategy, but as a way to improve how managers do it. For a classic example of how Royal Dutch/Shell used scenario planning and was prepared for the eventuality, if not the timing, of the oil crisis of 1973.
Capital planning and budgeting is the process by which unit managers (e.g., division directors) propose individual projects up the hierarchy for approval. This usually involves cost/benefit assessment of each proposal (combined into a return-on-investment measure), allowing senior managers to compare and rank them, and accept only as many as the capital funding allows. This is sometimes called "bottom-up" strategic planning. Most proposals with sponsorship from a division director have more or less free