A Report on Strategic Management Process

In this era, healthcare organizations face challenges regarding government mandate and policy, finance, customer satisfaction, reforms, and technology. It is the responsibility of healthcare leaders to assess and engage in strategic management. Therefore, strategic management refers to managerial decisions that determine the long-term performances of an organization (Hunger, Wheelen, Hoffman & Bamford, 2015). The organization uses the strategic management process to monitor and evaluate external opportunities and threats, its strengths and weaknesses. This report will provide detailed findings on major components of strategic management, the importance of organization’s missions and values to strategic formulation and benefits of strategic management process to healthcare organizations. In addition, we shall look at effects of strategic management on the organizational decision-making process, financial performance and the organization’s response to its environment.

Major Components of Strategic Management

Environmental Scanning

According to Hunger, Wheelen, Hoffman & Bamford (2015), environmental scanning refers to the process of monitoring, evaluating and distributing of critical information from the external and internal environment to stakeholders in an organization. Environmental scanning is essential since it identifies external and internal elements that will determine the success of the organization. The healthcare organization can conduct an environmental scanning through SWOT analysis (Hunger, Wheelen, Hoffman & Bamford, 2015). The analysis of the internal environment is significant since it allows the organization to determine its strengths and weaknesses while the analysis of external environment allows the management to determine opportunities and threats that influence the organization.


Strategy Formulation 

After conducting a successful environmental scanning, the organization engages in the creation of long-term objectives. Strategy formulation entails defining the mission of the organization, specifying objectives, designing and developing strategies and setting policy guidelines (Hunger, Wheelen, Hoffman & Bamford, 2015). Strategy formulation is critical in management process because it establishes long-term objectives that the organization could use to improve its competitive position.

Strategy Implementation

Strategy implementation involves putting strategies and policies into practice by developing programs, budgets, and procedures. With a program, the organization can restructure itself, change its internal structure or begin a new research effort. A budget is useful in planning and control since it provides detailed information on the program cost (Hunger, Wheelen, Hoffman & Bamford, 2015). Procedures in strategy implementation provide a sequential description of how to perform a particular task. For instance, when developing a strategy that involves employee training, the healthcare organization should consider how it would deliver the training, the time the training will take place and the cost of the training.

Evaluation and Control

Evaluation and control entail monitoring organization’s activities, and performances result to determine whether the desired results have been met. Evaluation and control are useful in strategic management because an organization uses the process to detect weaknesses in the previously implemented strategic plan and use the information to reformulate the strategy or begin the process again.

Importance of Organization’s Mission and Values to Strategy Formulation

The organization’s mission describes the reason for its existence. It explains what the company offers to the society. Similarly, the mission statement expresses the values and philosophy of how the organization operates (Swayne, Duncan & Ginter, 2012). Strategy formulation involves defining organization’s mission, objective, and strategy. Therefore, the organization’s mission is essential in strategy formulation because it forms the basis for the generation of the short-term and long-term objectives. The mission statement describes the motto of the organization and the direction it should move to attain its goals (Hunger, Wheelen, Hoffman & Bamford, 2015). Moreover, it helps to translate the objectives and strategies of the organization into performance and time-related measures.

Values refer to beliefs and principles that an organization uses as an underlying framework for its decisions (Swayne, Duncan & Ginter, 2012). Values are critical in strategy formulation because they provide underlying parameters for how the organization will formulate strategies that would have a positive effect on employees, customers, and the public. Similarly, values capture the philosophy of the organization’s culture thus providing directions on strategy formulation and limits unethical behaviors.

Benefits of Strategic Management Process to a Healthcare Organization

First, strategic management process offers a clearer sense of strategic vision for the healthcare organization. Developing and sharing the organization’s vision through participation can result in a powerful influence on the organization (Hunger, Wheelen, Hoffman & Bamford, 2015). A well-crafted vision that describes the future of the organization will always inspire employees and elevate the organization above its challenges. Second, strategic management process encourages innovation and change in a healthcare organization to meet the needs of dynamic situations. Because of the external regulatory requirements and the need to retain customers, the organization can establish new objectives that would bring changes (Swayne, Duncan & Ginter, 2012). Third, it encourages employee motivation and engagement. Strategic management process encourages employees in a healthcare organization to take active roles and motivation. The level of employee engagement represents their beliefs and attitudes towards the vision of the organization.

Effects of Strategic Management on Organizational Decision Making and Financial Performance

Strategic management process provides a coherent and defensible basis for employees and management in a healthcare organization to make decisions. Employees can make operational decisions and understand that decisions they make will move the organization in a single direction (Swayne, Duncan & Ginter, 2012). The impact of a strategic management on decision-making and financial performance of the organization can result in a profitable outcome. For instance, a manager wants to control supply costs in his healthcare facility. He decides to implement a strategy of working with vendors to improve contracts and encouraging physicians to make right decisions on supply. After a lengthy review of the new strategy, the manager can decide to alter or continue with the new strategy.

Effect of Strategic Management on the way an Organization Responds to its Environment

The strategic management improves the way a healthcare organization responds to its environment. The external environment that might affect the organization includes technology, climate, competition, media, changing legislation and the economy (Swayne, Duncan & Ginter, 2012). The internal environment includes human resource, management, organizational culture, physical assets and organization structure (Swayne, Duncan & Ginter, 2012). With both internal and external environment, the management can derive a set of strategic principles that would internally build strengths and repair weaknesses while externally grasping opportunities.


Strategic management refers to a managerial obligation that determines the long-term performance of the organization. Its components include environmental scanning, strategy formulation and implementation, and evaluation and control. An organization’s mission and values forms the basis that the organization is built upon. The strategic management process benefits healthcare organizations by offering a clearer sense of strategic vision, encouraging innovation, change, employee motivation and engagement. Organizations that use strategic management process are better off because it allows them to make decisions that will improve their financial performance. Lastly, with a strategic management process, an organization will improve the way it responds to the changing environment.



Hunger, J. D., Wheelen, T. L., Hoffman, A. N., & Bamford, C. E. (2015).  Strategic Management and Business Policy (14th ed.). Upper Saddle River, NJ: Pearson Education.

Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2012). Strategic management of health care organizations. John Wiley & Sons.



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