As you already know, the P-O-L-C framework starts with “planning.” You might also know that planning is related to, but not synonymous with, strategic management. Strategic management reflects what a firm is doing to achieve its mission and vision, as seen by its achievement of specific goals and objectives.
A more formal definition tells us that the strategic management process “is the process by which a firm manages the formulation and implementation of its strategy.”1Carpenter, M. A., & Sanders, W. G. (2009). Strategic management (p. 8). Upper Saddle River, NJ: Pearson/Prentice-Hall. The strategic management process is “the coordinated means by which an organization achieves its goals and objectives.”2Carpenter, M. A., & Sanders, W. G. (2009). Strategic management (p. 10). Upper Saddle River, NJ: Pearson/Prentice-Hall. Others have described strategy as the pattern of resource allocation choices and organizational arrangements that result from managerial decision making.3Mintzberg, H. 1978. Patterns in strategy formulation. Management Science, 24, 934–949. Planning and strategy formulation sometimes called business planning, or strategic planning, have much in common, since formulation helps determine what the firm should do. Strategy implementation tells managers how they should go about putting the desired strategy into action.
The concept of strategy is relevant to all types of organizations, such as large, public companies like Exxon, Google, and GE, as well privately held corporations, religious organizations, nonprofits organizations, and even political parties.
Strategic Management in the P-O-L-C Framework
If vision and mission are the heart and soul of planning (in the P-O-L-C framework), then strategy, particularly strategy formulation, would be the brain. The following figure summarizes where strategy formulation (strategizing) and implementation fit in the planning and other components of P-O-L-C. We will focus primarily on the strategy formulation aspects of strategic management because implementation is essentially organizing, leading, and controlling P-O-L-C components.
In the previous chapter we focused on analyzing and understanding a firm’s competitive environment. In this chapter, we see how the information strategic analysis provides gets put to work. The strategic management process is the set of activities that firm managers undertake in order to try to put their firms in the best possible position to compete successfully in the marketplace. Strategic management is made up of several distinct activities – this chapter will detail the role each activity plays in developing and sustaining a successful competitive position.
We tend to learn strategic management as an orderly process. However, most top managers deal with all of the steps simultaneously; they engage in environmental scanning to update their analytical view of the firm, they are executing strategies formulated in the past, they are formulating strategies to execute in the future, and so on. While it is useful to discuss the strategic management process in a stepwise fashion, it’s important to point out that the cycle occurs such that everything is being done at once.
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