Components of strategic

management
• Tasks
A strategy leads to a need for certain
things to be done by people. A change in
strategy may change those tasks. For
example, a strategy to be more customer
responsive may require some tasks to be
undertaken differently, and new ones to be
added.
• People
This means the nature, knowledge and
skills of the various individuals already in
the organisation, or who need to be
recruited to the organisation to implement
the strategy. The people required are
influenced by the tasks, but also can
influence the way the organisation looks at
those tasks in the first place.
• Reward systems
How people are rewarded will affect
whether they perform the tasks in the way
the strategy required. Frequently reward
structures are out of step with the strategy.
For example, the company may have an
intention to sell the most profitable mix of
products, but if the reward system pays
sales bonuses in the total value of sales,
the sales force are more likely to go for
volume than for profit.
• Control systems
How people are controlled will also affect what
they actually do. Control mechanisms that
emphasise individual effort, particularly if linked
to reward, will affect behaviour far more than a
management exhortation for teamwork. If
teamwork is the important thing, then controls
need to be designed accordingly. The nature of
a control system can also influence, and is
related to, the culture of the organisation.
Delegated decision making, for example, will
only happen if the control mechanisms allow it.
In many organisations the exhortation is to take
a long-term view, while the controls emphasise
• Information systems
Organisations are also affected by the way
information is collected and disseminated.
Information should also be related to the
structure of the organisation
• Decision-making systems
• Culture
Culture depends on all the other boxes in the
model, and is also influenced by the nature of
the company’s business, its history, and where it
operates. If culture does not fit with strategy,
something will have to give, and it will probably
be the strategy.
• Structure
Structure like the other components of the
model has a twodirectional link with every
other component, and can help a strategy
to be implemented, or can make it totally
impossible.
 Vision and leadership
The vision is the view which goes beyond the life
span of the corporate plans, which identifies the
future nature and philosophy of the organisation.
The quality of the vision is tied in directly with the
quality of leadership, and, of course, a good
system of planning cannot compensate for a
lack of leadership.
When thinking of vision in the context of strategic
management we are really beginning to think of
leadership, and it is an obvious fact that the
success of an organisation is at least as much
related to the quality of leadership as it is to the
formation of a superior strategy.
EASIER approach:
• Envisioning This is the process of
developing a coherent view of the future in
order to form an overarching objective for
the organisation. It blends the leader’s
view of external opportunities with the way
internal competencies and resources
relate to these opportunities.
• Activating Activating is the task of
ensuring that others in the organisation
understand, support, and eventually share
the vision.
• Supporting Supporting is about motivating and inspiring people to
achieve more than they otherwise might have believed possible, by
providing the necessary moral and practical help to enable this to
happen.

• Installing This is the process of developing detailed plans to enable

the strategy to be implemented and controlled. There is nothing
unique or special about the instruments such as plans, budgets,
critical path analysis, Gantt charts or other tools which have to be
developed to ensure that nothing is overlooked, and everything is
coordinated. These are all the regular instruments of management.

• Ensuring Plans, structures for implementation, and policies may be

formulated, and on paper the organisation may have covered
everything. But this is not enough, and consideration must be given
to the monitoring and controlling processes that will ensure that
actions are correctly undertaken and results are as expected.

• Recognising This is giving recognition to those involved in the

process. Recognition may be positive or negative, and should be
used to reinforce the change, and to ensure that obstacles to
progress are removed.
Styles of strategic management
 Environmental turbulence
A scale of turbulence:
 Evolution of planning
approaches
• phase 1: could also be described as
extended budgeting, and the approach is
largely based on projecting the figures in
the budget out for a few more years.
• phase 2: the approach tries to match the
company’s strategies to the perversities of
the real world.
• phase 3: Externally based planning is
characterised by more attention to
markets, and the dynamic causes of
market change, and much closer
examination of competitors.
• phase 4 melds strategic planning and
management into one process.
 Strategic management
• A strategic management process should
aim to unleash for the company the
benefits which have already been
discussed in some detail – better results
through better decisions, the identification
of more opportunities, the consideration of
more factors, improved coordination and
communication, strong motivation, and the
provision for the company of a means of
coping with the pressures of change.
An approach to corporate
planning
 Scenario planning
Van der Heijden claims that:

Scenario planning distinguishes itself from other

more traditional approaches to strategic
planning through its explicit approach towards
ambiguity and uncertainty in the strategic
question. The most fundamental aspect of
introducing uncertainty in the strategic equation
is that it turns planning for the future from a
once-off episodic activity into an ongoing
learning proposition. In a situation of uncertainty,
planning becomes learning, which never stops
 Elements of a business plan
The descriptions of planning processes all
require the preparation of plans. In
addition, many managers may from time to
time be required to write a business plan,
even though their organisation may not
operate a continuous process of strategic
management.