strategic managementStrategic management is the process of specifying an organizations objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. It is the highest level of managerial activity, usually performed by the companys Chief Executive Officer (CEO) and executive team. It provides overall direction to the whole enterprise. An organizations strategy must be appropriate for its resources, circumstances, and objectives. The process involves matching the companies strategic advantages to the business environment the organization faces. One objective of an overall corporate strategy is to put the organization into a position to carry out its mission effectively and efficiently. A good corporate strategy should integrate an organizations goals, policies, and action sequences (tactics) into a cohesive whole. To see how strategic management relates to other forms of management, see management.Strategy formulation and implementationStrategic management can be seen as a combination of strategy formulation and strategy implementation. Strategy formulation involves: Doing a situation analysis: both internal and external; both micro-environmental and macro-environmental. Concurrent with this assessment, objectives are set. This involves crafting vision statements (long term), mission statements (medium term), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives. These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to obtain these goals. This three-step strategy formation process is sometimes referred to as determining where you are now, determining where you want to go, and then determining how to get there. These three questions are the essence of strategic planning.Strategy implementation involves: Allocation of sufficient resources (financial, personnel, time, computer system support) Establishing a chain of command or some alternative structure (such as cross functional teams) Assigning responsibility of specific tasks or processes to specific individuals or groups It also involves managing the process. This includes monitoring results, comparing to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, and making adjustments to the process as necessary. When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with (and/or conversion from) legacy processes. Strategy formation and implementation is an on-going, never-ending, integrated process requiring continuous reassessment and reformation. Strategic management is dynamic. See Strategy dynamics. It involves a complex pattern of actions and reactions. It is partially planned and partially unplanned. Strategy is both planned and emergent, dynamic, and interactive. Some people (such as Andy Grove at Intel) feel that there are critical points at which a strategy must take a new direction in order to be in step with a changing business environment. These critical points of change are called strategic inflection points.Strategic management operates on several time scales. Short term strategies involve planning and managing for the present. Long term strategies involve preparing for and preempting the future. Marketing strategist, Derek Abell (1993), has suggested that understanding this dual nature of strategic management is the least understood part of the process. He claims that balancing the temporal aspects of strategic planning requires the use of dual strategies simultaneously.General ApproachesIn general terms, there are two approaches to strategic management: The Industrial Organization Approach o based on economic theory deals with issues like competitive rivalry, resource allocation, economies of scale o assumptions rationality, self interested behaviour, profit maximization The Sociological Approach o deals primarily with human interactions o assumptions bounded rationality, satisfying behaviour, profit sub-optimality. An example of a company that currently operate this way is Google Strategic management theories can also be divided into those that concentrate mainly on efficiency and those that concentrate mainly on effectiveness. Efficiency is about doing things the right way. It involves eliminating waste and optimizing processes. Effectiveness is about doing the right things. There is no point in acting efficiently if what you are doing will not have the desired effect. A good strategy will blend both efficiency and effectiveness. This distinction is linked to the formulation/implementation distinction made above.Strategic management techniques can be viewed as either