Strategic Management Fundamentals

Strategic Management Definition and Purpose

Strategic management is the process of formulating and implementing an organization's major goals and initiatives by considering its resources and internal and external environments. It provides overall direction by defining objectives, developing policies and action plans, allocating resources, and establishing methods for monitoring progress. Because organizational environments and competitive conditions change, strategic management is dynamic and often uses feedback to refine future decisions. Its purpose is to connect an organization's mission and vision with practical execution and competitive success. The process generally includes strategy formulation—analyzing the external environment, industry, and internal capabilities to set goals—and strategy implementation—aligning people, processes, technology, leadership, communication, incentives, and monitoring systems with those goals. Strategic management differs from operational management, which focuses mainly on efficiency and cost control within the direction established by strategy.

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Strategy Formulation and Implementation

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