According to Thomas L.Wheelen, J.David Hunger (2008), Strategic Management Model (SMM) is composed four fundamental steps: Environment Scanning, Strategy Formulation, Strategy Implementation, and Evaluation and Control. Environment Scanning is the step of gathering and analyzing information based on SWOP analysis model. Strategy Formulation is the developing of company’s missions, objectives, strategies, and policies. Strategy Implementation is steps that put strategy into action, composed of establishing programs, budgets, and procedures. Evaluation and Control is the last step that ensures the performance of company.
Beside, Strategic Decision Making Process (SDMP) comprises several steps that can be classified into three big stages. The first stage is Strategy Formulation that consists of evaluation current performance, current missions, objectives, strategies, and policies. Following ...view middle of the document...
While in SMM, the first thing company has to do is collection and evaluation of market information, called Environment Scanning process; in SDMP, the first stage is evaluation current performance results. This difference shows that SMM bases on environment analysis, each environmental change may affect company’s strategy. On the other hand, SDMP bases on current performance. If current performance still match managers’ requirement, company may do nothing despite market changes.
However, SMM and SDMP are quite similar in their processing. Both models require environment analysis including internal and external factors. Analyzed result conducts the reviewing and revising company’s fundamental elements, such as missions, objectives, and strategy. New change in strategy will be followed up with a new program of implementation consisting of budgets, procedures, and so on. Certainly, evaluation step will not be absolutely neglected. This step will complete the process circle and open a new turn.
As describing above, it is possible to reconcile SDMP with SMM. Strategic implementation step and Evaluation and Control step are quite similar in both models. However, Environment Scanning step in SDMP is immersed within Strategic Formulation step, while they are clearly separated in SMM. In fact, this difference does not make two models clash each other. In contrast, they can complement each other. While SMM helps company rapidly take advantage of new opportunities on the market, SDMP ensures that what company is doing is conformable with its strategy, and it is the best way to archive company’s goals. As a result, company can use SMM to figure out its long-term strategy, and apply SDMP for shorter strategic decisions.
To conclude, SMM and SDMP are both necessary tools for a manager. It is not rational to say what model is the better one because their usefulness is similar. Practically, SMM is put into action through SDMP (Thomas L.Wheelen, J.David Hunger, 2008).
Thomas L.Wheelen, J.David Hunger (2008), Strategic management and business policy, (the 10th edition), Prentice Hall.