This question contains two parts; be sure to answer each part. First, define strategic management, explaining how managers from all parts of the organization are involved and the three types of planning that are a part of strategic management. Next, imagine that you are planning to open a coffee shop. Give specific examples of each of the three types of planning with regard to your coffee shop.

Question

What will be an ideal response?

Answer 1

Strategic management is a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. This definition doesn't mean that managers at the top dictate ideas to be followed by people lower down. Indeed, precisely because middle managers in particular are the ones who will be asked to understand and implement the strategies, they should also help formulate them. Strategic management is a process that involves managers from all parts of the organization—in the formulation, implementation, and execution of strategies and strategic goals to advance the purposes of the organization. Thus, planning covers not only strategic planning (done by top managers) but also tactical planning (done by middle managers) and operational planning (done by first-line managers). Planning and strategic management derive from an organization's mission and vision about itself.

Answers will vary with regard to the coffee shop, but here is one possible answer.

In the early days of my coffee shop, it will be a small business and I will be the only manager, which will make me responsible for all levels of planning: strategic, tactical, and operational. At the strategic level, I will determine where my competitors are located and what they change. I also will determine where people gather so that I can look for a site that will motivate local people to stop in for a cup of coffee or a snack. I know that competitors like Starbucks are entrenched, so I have to find a way to improve on their services and offer goods and/or services that will make customers come to my coffee shop instead of Starbucks. Once I've got my site chosen, my tactical planning will revolve around signing a lease for the shop, getting it designed, and building word of mouth regarding the grand opening via social media like Facebook and Twitter. In terms of operational planning, I have to hire two part-time baristas, as I cannot possibly work at the shop 24/7, even though I realize that I will be spending most of my life there until the shop is established and successful. I'll contact the local community college and advertise the positions on the job services board there. I can't afford to pay more than minimum wage, but I can promise the baristas free snacks and all the coffee they can drink.