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

Sagar Hotels' management follows a process in which it first sets direction, then analyses its environment, chooses among alternatives, puts the chosen plan into action and finally checks results against targets to take corrective action. Which statement about this process is correct?

The described sequence is the strategic management process, which includes direction setting, environmental analysis, strategy choice, implementation and finally evaluation and control. Evaluation gives feedback that can change earlier stages, so the process is continuous rather than a one-time exercise or mere formulation.

  1. AIt is the strategic management process, with evaluation and control as the final stage feeding back into earlier stagesCorrect
  2. BIt is only strategy formulation because implementation is not part of strategic management
  3. CIt is a one-time exercise that ends once the plan is implemented
  4. DIt is operational planning because it includes checking daily results

Explanation

Strategic management covers setting direction, analysis, strategy formulation, implementation and evaluation and control. Evaluation provides feedback that can lead to revising direction or strategy, so it is continuous. Treating it as only formulation, one-time, or operational ignores its full scope.

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