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Answers of MB0052 Strategic Management and Business Policy Q1. What do you mean by Strategic Management Process (SMP)? Explain the three levels in Strategic Management Process.

AnswerStrategic planning and management should actually start with organizational mission and objectives, consider internal competences and resources, various strategy alternatives and the competitive situation and, then proceed with formulation and implementation of
the strategy. All these constitute the strategic management process (SMP).  
For understanding these four stages, a company has to consider a number of other factors like organizational competence and resources, the environment, various strategy alternatives available, strategy selection criteria, etc. All these are internal parts of SMP. The strategic management process may best be illustrated in the form of a model. We can call this the strategic management model. 

The levels of Strategic Management Process: Three levels in the strategic management process are:
 The corporate level,
 The business unit or SBU level and
 The functional level.

These three levels of strategy distinctly exist only in multiple SBU firms.
For single-business companies, corporate-level strategy and SBU-level strategy are not really distinguishable because all the organizational level strategies for resource allocation or growth or market diversification are formulated with respect to the particular product or business of the company. 

Corporate, SBU and functional level
Corporate-level strategy sets the long-term objectives of an organization and broad policies and controls within which an SBU operates. The corporate-level strategies also help an SBU to define its scope of operations and also limit or enhance SBU’s operations through resources the corporate management allocates for securing competitive advantage.   

Functional-level strategies follow from, and also support, SBU-level strategies. Strategies at the functional level are often described as tactical. Such strategies are guided and controlled by overall SBU strategies. Functional strategies are more concerned with implementation of corporate-and SBU-level strategies rather than formulation of strategies. Strategic management process at three levels also involves decision making. But, the types of decision making, their scope and impact are different at different levels. The characteristics of decision making at three levels may be more clearly understood in terms of major dimensions of decision making.


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