Explain the concept of the strategic management (three-tier) process.


Unit 1: Introduction to Strategic Management

The nature and value of strategic management is to achieve the desired results and outcome due to careful research
(environmental scanning), planning and development of a company’s strategy as well as the implementation and
maintenance of it (Pearce & Robinson, 2013, p. 3).
For this week’s Assignment, you will complete a short answer on the following question:
● Why is strategy important to business?
● You will want to address the main components of the (three-tier process) of the strategic management process
while discussing the importance of strategy for business.
Be sure to use your reading this week as a resource. You are encouraged also to use the Library databases and the
Internet as additional resources.
For additional details on this Assignment view the Rubric below.
Pearce, J. A., & Robinson, R. B. (2013). Strategic management: Planning for domestic & global competition. (13th ed.).
New York, NY: McGraw-Hill.
ID: MT460-02-08-A
Assignment Checklist:
● Explain the concept of the strategic management (three-tier) process.

● Discuss the importance of having a future oriented plan.

● Discuss the organization’s vision, mission, purpose, philosophy or goal.

● Discuss the strategic process as input for future decision making.

Sample paper

Management Policy and Strategy

Strategic management refers to the process of examining the key initiatives used by the top management of a company and with relation to the utilization of resources and competitiveness in the external environment. According to Pearce & Robinson (2013), strategic management is a three-tier process involving corporate, business, and functional-level planners. The corporate level mainly comprise of board of directors, administrative officers, and chief executive. The corporate level is mainly concerned with ensuring the organization achieves its financial goals as well as nonfinancial objectives such as improving corporate image or customer loyalty. The business level comprise of corporate managers and business managers. It is the middle level of the corporate decision-making structure. The major aim of corporate and business managers is to implement the wishes of corporate level planners into actions. The functional level is the lowest level of the structure, comprising of product managers, functional managers, and division managers. The main aim is to formulate short-term strategies and annual objectives.

It is crucial for an organization such as Southwest Airlines to have future oriented plan. Future oriented plans enable managers to develop projections that enable an organization adopt the best strategic options (Pearce & Robinson, 2013). For instance, future oriented plans may indicate higher demand for a product in a future period, prompting the management to develop options to improve production capacity. A future oriented plan enables the management scan for new opportunities in the environment and take advantage of these. An organization that uses future oriented plans is able to seize new opportunities in the environment and convert them into attractive ventures. Future oriented plans are important in managing risks and uncertainty. Organizations cannot be able to control unforeseen events that may affect their operations in future. However, through development of future oriented plans, managers can envision risk factors in the environment and establish contingency measures.

The organization’s vision, mission, purpose, philosophy or goals are part of its strategic management policy. The organization’s mission describes its unique purpose, which is different from the rest of the organizations. For example, the mission of Southwest Airlines is to deliver high quality service “with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest Airlines, 2016). The organization’s vision statement reflects the aspirations or desires of the top leadership. It represents the intent of the executive leadership with regard to the future. For example, part of Southwest’s vision is to become the “most loved” and the “most flown” airline (Southwest Airlines, 2016). The purpose statement describes the core reason for the organization’s existence. For example, Southwest’s purpose is to connect people through low-cost air travel. The philosophy or goal describes the organization’s core beliefs, aspirations, values, and priorities.

The strategic process is a critical input for future decision-making. The strategic process involves the organization’s long-term performance. The strategic process involves making commitments for duration extending for over one year. The impacts of strategic decisions last over long periods, whether they are positive or negative in nature. Forecasts made by managers are a key part of the strategic process. These forecasts also serve as a basis for future decision-making. In the strategic process, the key is formulation of objectives that enable an organization adopt the best options. This is important in future decision-making. In the modern competitive environment, firms can only succeed if they make the right anticipatory steps to avoid risks or uncertainties that may jeopardize operations. When organizations identify a suitable strategy, its resources are geared towards fulfilling the strategies. As such, the basis for future decisions lies on fulfilling the strategies.


Pearce, J. A., & Robinson, R. B. (2013). Strategic management: Planning for domestic & global competition. (13th ed.). New York, NY: McGraw-Hill.

Southwest Airlines. (2016). Purpose, vision, values, and mission. Retrieved from             http://investors.southwest.com/our-company/purpose-vision-values-and-mission