Basic Concepts of Strategic Management 47
Figure 1–3 depicts key environmental variables. They may be general forces and trends within the natural or societal environments or specific factors that operate within an organization’s specific task environment—often called its industry. The analysis techniques available for the examination of these environmental variables are the focus of Chapter 4.
The internal environment of a corporation consists of variables (strengths and weak- nesses) that are within the organization itself and are within the short-run control of top management. These variables form the context in which work is done. They include the corporation’s structure, culture, capabilities, and resources. Key strengths form a set of core competencies that the corporation can use to gain competitive advantage. Although strategic management is fundamentally concerned with what constitutes an organiza- tion’s strengths, weaknesses, opportunities, and threats, the methods to analyze each has developed substantially in the past two decades. No longer do we simply list the SWOT variables and have employees try to populate the quadrants. Each of the four is rich with processes and techniques that will allow for a robust and sophisticated understanding of the company. This will be examined in detail beginning with Chapter 5 of the text.
FIGURE 1–2 Strategic Management Model
Societal Environment: General forces
Natural Environment: Resources and
climate
Task Environment:
Industry analysis
Structure: Chain of command
Culture: Beliefs, expectations,
values
Resources: Assets, skills, competencies,
knowledge
Activities needed to accomplish a plan Cost of the
programs
Sequence of steps needed to do the job
Reason for existence
What results to accomplish by when Plan to
achieve the mission & objectives Broad
guidelines for decision making
Reason for
Mission
Natural
Structure:
What l
Plan to hi h
h
Broad id li
e
Activities d d
h Cost of the
Sequence f
Internal
External
Programs
Budgets
Procedures
Performance
Objectives
Strategies
Policies
Actual results
Putting Strategy into Action
Strategy Implementation:
Developing Long-range Plans
Strategy Formulation:
Monitoring Performance
Evaluation and Control:
Feedback/Learning: Make corrections as needed
Gathering Information
Environmental Scanning:
SOURCE: T. L. Wheelen, “Strategic Management Model,” adapted from “Concepts of Management,” presented to Society for Advance- ment of Management (SAM), International Meeting, Richmond, VA, 1981. Kathryn E. Wheelen solely owns all of (Dr.) Thomas L. Wheelen’s copyright materials. Kathryn E. Wheelen requires written reprint permission for each book that this material is to be printed in. Copyright © 1981 by T. L. Wheelen and SAM. Copyright © 1982, 1985, 1988, and 2005 by T. L. Wheelen and J. D. Hunger. Revised 1989, 1995, 1998, 2000, 2005, 2009, and 2013. Reprinted by permission of the copyright holders.