Strategic Management

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Category: Business and Industry

Date Submitted: 05/24/2008 08:00 AM

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According to Thomas L.Wheelen, J.David Hunger (2008), Strategic Management Model (SMM) is composed four fundamental steps: Environment Scanning, Strategy Formulation, Strategy Implementation, and Evaluation and Control. Environment Scanning is the step of gathering and analyzing information based on SWOP analysis model. Strategy Formulation is the developing of company’s missions, objectives, strategies, and policies. Strategy Implementation is steps that put strategy into action, composed of establishing programs, budgets, and procedures. Evaluation and Control is the last step that ensures the performance of company.

Beside, Strategic Decision Making Process (SDMP) comprises several steps that can be classified into three big stages. The first stage is Strategy Formulation that consists of evaluation current performance, current missions, objectives, strategies, and policies. Following up these evaluations is the reviewing of corporate governance; and the scanning and analyzing of external factors, and also internal factors based on SWOP analysis model. This analysis conducts the revising of missions and objectives, and then the generating of strategic alternatives. This stage is ended by the selecting of the best alternative. Two last steps, which are Strategy Implementation and Evaluation and Control, are quite similar to SMM.

From above description of SMM and SDMP, it is showed that the important different between SMM and SDMP is their first stage. While in SMM, the first thing company has to do is collection and evaluation of market information, called Environment Scanning process; in SDMP, the first stage is evaluation current performance results. This difference shows that SMM bases on environment analysis, each environmental change may affect company’s strategy. On the other hand, SDMP bases on current performance. If current performance still match managers’ requirement, company may do nothing despite market changes.

However, SMM and SDMP are...