August 12, 2013
Strategic Management Process Paper
In Chapter 1 of Concepts in Strategic Management and Business Policy, strategic management is defined as a set of managerial decisions and actions that determines the long-run performance of a corporation. The primary components of a strategic management process include internal and external environment scanning, strategy formulation, strategy implementation, and evaluation and control. This paper will discuss the components of a strategic process, the reason a strategic process is necessary for an organization, and describe how Johnson and Johnson use their strategic management process.
Strategic Management Process and its Components
There are many benefits for having a strategic management plan. It helps give a plan and process for the vision of an organization, prioritize the importance of the steps an organization must take to grow, and helps improve the comprehension of the continuous cycle of growth for the organization. The process of the strategic management plan begins with an environmental scan. The environmental scan monitors and evaluates the external and internal environments of stakeholders within the organization. Once this is complete a strategy formulation is planned. It helps develop the long range plans by using a SWOTT (strength, weakness, opportunities, threats, and trends) analysis. This plan is very important for management to effectively use the environmental scan. After the plan is complete strategy implementation is used. This process allows the planning to put into action. The actions include programs, budgets, and procedures. This process is followed by the evaluation and control. Evaluation and control process allows for the organization to record the performance results, monitor the actual performance, and compare the desired performance to the actual performance. All these components must be used to create an effective strategic management process (Wheelen & Hunger, 2010).
Johnson and Johnson Strategic Planning Process Johnson & Johnson is broadly known as a health care company that touches everything from pharmaceutical, biologics, devices, diagnostics, and consumer businesses. Their fundamental strategic direction is set by their management team with the support of the Board of Directors. They are organized on the principle of decentralized