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CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management

Meera Pharma regularly revises its strategies after finding that actual market conditions differ from its earlier assumptions, using feedback from the environment. Which characteristic of the strategic management process does this best reflect?

Revising strategies as conditions differ from assumptions shows that strategic management is a dynamic, continuous process of formulation, implementation, evaluation and adjustment. It is not a one-off exercise, nor does it remove uncertainty or reduce to preparing financial statements.

  1. AStrategic management is a one-time exercise that is never revisited
  2. BStrategic management is a dynamic, continuous process involving formulation, implementation, evaluation and adjustmentCorrect
  3. CStrategic management is limited to preparing the annual financial statements
  4. DStrategic management removes all uncertainty from decisions

Explanation

Strategic management is continuous and dynamic: strategies are evaluated and modified in response to feedback and changes in the environment. It is not one-time, not just accounting, and cannot eliminate uncertainty.

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