Strategic Management Process And General Vs Specific Environment Factors

Discuss about the Principles of Management for Potential Challenges.

Planning: Planning is the core function of management. This refers to the process of evaluating and formulating the future business course about how the organization will be driven in future and how to deal with the potential challenges. Planning process also involves determination of the required resources for the future course of business (Morden, 2017). Thus determining the probable business challenges in future along with formulating the resources and strategies is included in the planning process. The more effective will be the planning process, the more will be the business potentiality for the organizations.

• Organizing: The next management function is organizing. This refers to the process of accumulating all the required resources for the business organizations. This is important due to the reason that for the successful business operation, there are number of resources such as human resources, financial resources and infrastructure. All these are important for the effective business operation. Thus in the process of organizing, managers organize these resources in accordance to the organizational needs. This enables the business organizations to have proper coordination and management among all the required resources and proper allocation of the resources for different organizational activities. Proper and effective allocation and management of the required resources helped KFC to be the leading force in the global fast food industry.
• Leading: The next management function is leading that involves the leadership qualities of the managers. This is also important due to the reason that effective leadership qualities of the managers will determine the effectiveness and efficiency of the organization in the long term. In the current business scenario, leadership skill is more important due to the reason that efficiency of the human resources in the organization is being influenced by the effective leadership skills. Thus, the more effective will be the leadership skills of the managers in the organization, the more will the organizational efficiency and more will be the organizational competitiveness. In addition, leadership also determines the risk taking capabilities of the organizations. For instance, leaders such as Steve Jobs are the reason behind the success of Apple Inc. This is due to the reason that leadership skills of Steve Jobs helped to have effective internal management in place. This in turn helped them to stay innovative in the market.
• Controlling: The last management function is controlling. This function refers to the controlling of all the management activities by the managers along with maintain the seamless flow and allocation of the required resources. Thus, controlling helps in properly managing all the above functions discussed. This is also important due to the reason that organizations should have the control on their business operations and the managers should have the controlling skills in order to identify the deviations from the organizational objectives and targets. Thus, effective controlling is important for the business organizations to efficiently operate in the market.

• One of the major tools used in planning process is forecasting. This refers to the process of the predicting the future happenings of the organizations. Forecasting is being initiated by scanning the environment of the business and evaluating the past and present trend of the business. Thus the core objective of initiating forecasting process is to predict the probable future trend in accordance to the present and past trends. It enables the business organizations to have a rough idea and understanding about what can be expected in the following years. There are mainly two types of forecasting methods being followed, quantitative and qualitative.
• Contingency planning is another major and effective tool being used in planning process. This tool refers to the process of identifying the second best alternative for the organization if the original plan cannot get properly implemented due to difference in business environment and factors. Thus contingency planning process involves the initiation of plan B in case of failure of plan A. The major advantage that can be gained by the business organizations from the initiation of the contingency planning is having less risk of strategic planning failure. This is due to the reason that in case of the contingency planning, there will always be alternatives and thus failure of the original strategy will have less impact on the organizations.
• Scenario planning is another major tool for planning process. According to this process, different future scenarios are being predicted in accordance to the present happenings. The scenarios are being predicted and listed according to the probability of happenings. Afterwards, spate plans are being made for the different alternate and predicted scenarios. Thus, it enables the business organizations to have more flexibility in the business operation. This is due to the reason that with the help of the scenario planning, organizations will have different plans ready for different probable scenarios. This will help them to be more effective in dealing with different situations in case of change in the business environment. Plans can be changed and replaced in case effectively and quickly for future business scenarios.
• Benchmarking is another major planning tool that involves comparing the external standards with the actual performance of the organizations. This helps the organizations to identify the areas for improvement in comparison to the external industrial standards. In addition, benchmarking with the external factors also enables the organizations to identify the best practices of some other organizations and implement the same. This tool is more reliable and less risk involving due to the reason that the best practices in the industry will be implemented and thus the expected outcome will be pre-determined.
• Another major planning tool is involving the staff planners in the organizations. These are the persons for taking the responsibility of leading and coordinating in the organization. In majority of the cases, staff planners are the experienced ones with having expertise in respective fields. They are being involved in assisting the managers of the organizations by developing plans and accumulating information for planning process. In addition, they are also being involved in monitoring process of the planning program and recommending changes accordingly. Thus, this tool helps the organizations as well as the managers in having the expert knowledge of the staff planners in the planning process.

In the current business scenario, there are number of factors to be considered for the managers and thus they are having the need of formulating different strategies for the course of their business operations. In this case, strategic management process will help the managers to identify the different available strategies and organizational needs. In accordance to the identified factors, strategic management process helps the managers to make a set of effective strategies in order to have desired level of performance. There are number of steps being followed in the strategic management process.

• Environmental scanning is the first step in the strategic management process. This involves the process of identification of the major internal and external factors that are having influence in the business operation of the organization. Scanning of the environment also helps the managers to identify the strengths and weaknesses of the organizations and areas for improvement.
• The next step in the strategic management process is strategy formulation. This step involves the formulation of the required strategies in accordance to the identified environmental factors. In this step, it is the responsibility of the managers to design the strategies that will meet the identified environmental factors as well as fulfill the organizational goals and objectives.
• The next step involves the implementation of the identified strategies. In this step, managers should have to identify the required resources for implementing the designed strategies along with managing the human resources and designing the organizational structure.
• The last step is the evaluation of the implemented strategies. This step involves monitoring and evaluating the implemented strategies. This helps the managers to gauge and measure the implemented strategies in the long term. This can helps the managers to identify the shortcomings of the implemented strategies and rectifying accordingly.

General environment is majorly the external business factors being faced by the business organizations. These external business factors are termed as general environment due to the reason that factors such as political factors, social factors, and legal factors, economic and environmental factors are applicable and same for the entire industry. In addition, these factors are the majorly not controllable in nature. The impact will also be more diverse and vast due to the reason that the entire industry will get impacted due to these factors.

Specific environment refers to the internal environmental factors faced by the business organizations. This includes the internal strengths and weakness of the organization and the potential threat and opportunity faced by them. These factors are specific and different in different organizations and it is up to them to control their impact. The major impact of the specific environments is influencing the competitive advantages of the business organizations as compared to their competitors.

Reference

Morden, T. (2017). Principles of management. Routledge.