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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

A company secretary explains to the board that strategic management is both proactive and reactive. Which statement best supports this view?

Strategic management is both proactive and reactive because firms plan intended strategies ahead but also modify them when unforeseen environmental changes occur. A rigid unchanging plan, pure reaction without planning, or a mere annual budget does not capture this dual nature.

  1. AStrategy is fixed once and never changed during the plan period
  2. BStrategy is only a reaction to competitors with no planning
  3. CStrategy is purely a financial budget prepared annually
  4. DOrganisations plan their intended strategy in advance yet also adapt it as unforeseen environmental changes emergeCorrect

Explanation

Strategic management involves deliberate planning toward long-term goals, while managers must adjust when the environment changes unexpectedly. Rigid fixed strategy ignores adaptation, pure reaction ignores planning, and a budget is only one financial tool, not the whole of strategy.

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