Stages of Strategic Management

Stages of Strategic Management

Strategic management is considered to be a crucial management activity for all level of organizations because it try to ensure the future existence of the entity. Strategic management has a structural process which can be broadly divide into three stages i.e. Formulation Stage, Implementation and Evolution.

1. Formulation Stage

In formulation stage long policies are formulated based on the internal and external assessment carried out by the management. The organization deeply studies the organization strengths and opportunities and also takes into account its weakness. At this level a broad direction is set and major decision related to direction is taken.

The major policy decision may include the organization capital structure, organizational entry in new market, decision related expansion and diversification, decision of vertical and horizontal integration etc.

2. Implementation Stage

In implementation stages decision and short term policies and procedure adopted in the light of the overall direction set in the formulation stage. Normally at this level tactical level of management have more extensive work.Strategic implementation basically focuses to answer the two question how to do it and how to do it efficiently and effectively.

The major decision and procedures are required are budgets preparation, resource allocation, organization and responsibility structure, communication and information need assessment and procedure to fulfill those needs.

3. Evaluation Stage

In evaluation stages the strategy implementation are evaluated and problems related to implementation are sort out, policies are plans are revised in the light of operation results obtained from the implementation of strategies.

Evaluation serves more like a control stage of the strategic management. This is not sufficient to prepare the ideal strategy. Evaluation also recognizes the importance of the control and flexibility of the strategic management process.Evaluation can be further classified into two stages i.e. performance analyses and corrective actions.