Business Policy - Week 1 Assignment

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Apr 3, 2024

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1 Strategic Decision-Making Process Allysen Hewette Charleston Southern University ECBA 406: Business Policy Dr. Melvin Sinclair March 17, 2024

2 Strategic Decision-Making Process Strategic management is a set of managerial decisions and actions that help determine the long-term performance of an organization (Wheelen, Hunger, Hoffman & Bamford, 2017). There are several sections that are included in a strategic management system. These sections include; both external and internal environmental scanning, being able to formulate strategies, knowing how to implement the strategies, evaluation and control. Every manager of a company wants for them to be successful, but it comes into question if the manager really knows how to perform to ensure that success. Increasing risks of error, costly mistakes, and even economic ruin are causing today’s professional managers in all organizations to take strategic management seriously in order to keep their companies competitive in an increasingly volatile environment (Wheelen, Hunger, Hoffman & Bamford, 2017). There are four phases of strategic management that if followed, will allow managers to evolve and become a better fit for running a company. Phase 1 consists of basic financial planning. Companies have to stay within their budget for the following year, so managers will host a meeting prior to establish what all is needing to be done along with what all they are needing to spend their money on within the year. This type of planning is very time consuming and normally a company will often suspend all work activities for weeks while all of the managers are discussing ideas for the budget. Phase 2 is known as forecast-based planning. Managers are beginning to propose five- year plans due to annual budgets becoming less useful because of plans normally taking longer than a year to complete. This phase is also time consuming, often involving a full month or more

3 of managerial activity to make sure all the proposed budgets fit together (Wheelen, Hunger, Hoffman & Bamford, 2017). This whole process takes approximately three to five years due to the continuous meetings to evaluate proposals. Phase 3 is defined as externally strategic planning. This is the step where top management of a company will get involved due to the five-year plans being ineffective. Lower- level managers are no longer in control of the planning process for their company. These individuals will take control of the planning process by initiating a formal strategic planning system. By acting and thinking strategically, the companies are hopeful in increasing the responsiveness to their competitors and the changing market. The higher positioned managers tend to meet once a year at a retreat led by important members of the planning staff to evaluate and update the plans that are currently in place. Help with these plans is usually accepted by consultants, however very little help is accepted by the lower-leveled managers. The fourth and final phase is known as the strategic management phase. Top managers finally come to the conclusion that they are not able to move forward with company planning without the lower-level managers. Realizing that even the best strategic plans are worthless without the input and commitment of lower-level managers, top management forms planning groups of managers and key employees at many levels, from various departments and workgroups (Wheelen, Hunger, Hoffman & Bamford, 2017). At this point in the process, the strategic plans detail the implementation, evaluation, control issues, emphasize probable scenarios and contingency strategies. People at all levels within the company are now involved, so planning is no longer strictly top down. There are several questions that I would use within the management position to ensure that a form of strategic management is established. Questions to be asked include, where is the

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4 organization now? Where do you feel the organization will be in one year if there are no changes made? Five years? If these answers are not acceptable, then what specific actions should management take to make improvements? The Bain & Company’s 2015 Management Tools and Trends survey of 1,067 global executives revealed that strategic planning was the number two tool used by decision makers just behind customer relationship management (Wheelen, Hunger, Hoffman & Bamford, 2017). Other tools used to create a strategic management involve vision statements, management programs, and balanced scorecards. As a manager, to be able to express to my employees the importance of this process would start with communication. Being the leader of a group of people consists of being able to communicate with each other respectively and effectively. If the employees do not respect their manager, then they are never going to participate in what their manager is wanting them to participate in. They all have to be on the same page and within the same mindset to help create a successful strategic management design.

5 References Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic Management and Business Policy: Globalization, Innovation and Sustainability . http://ci.nii.ac.jp/ncid/BB16298627

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