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CHAPTER 1 • THE NATURE OF STRATEGIC MANAGEMENT 7

Strategy implementation often is called the “action stage” of strategic management.
Implementing strategy means mobilizing employees and managers to put formulated strate-
gies into action. Often considered to be the most difficult stage in strategic management,
strategy implementation requires personal discipline, commitment, and sacrifice. Successful
strategy implementation hinges upon managers’ ability to motivate employees, which is more
an art than a science. Strategies formulated but not implemented serve no useful purpose.
Interpersonal skills are especially critical for successful strategy implementation.
Strategy-implementation activities affect all employees and managers in an organization.
Every division and department must decide on answers to questions, such as “What must we
do to implement our part of the organization’s strategy?” and “How best can we get the job
done?” The challenge of implementation is to stimulate managers and employees throughout
an organization to work with pride and enthusiasm toward achieving stated objectives.
Strategy evaluation is the final stage in strategic management. Managers desperately need
to know when particular strategies are not working well; strategy evaluation is the primary
means for obtaining this information. All strategies are subject to future modification because
external and internal factors are constantly changing. Three fundamental strategy-evaluation
activities are (1) reviewing external and internal factors that are the bases for current strategies,
(2) measuring performance, and (3) taking corrective actions. Strategy evaluation is needed
because success today is no guarantee of success tomorrow! Success always creates new and
different problems; complacent organizations experience demise.
Strategy formulation, implementation, and evaluation activities occur at three hierarchi-
cal levels in a large organization: corporate, divisional or strategic business unit, and func-
tional. By fostering communication and interaction among managers and employees across
hierarchical levels, strategic management helps a firm function as a competitive team. Most
small businesses and some large businesses do not have divisions or strategic business units;
they have only the corporate and functional levels. Nevertheless, managers and employees at
these two levels should be actively involved in strategic-management activities.
Peter Drucker says the prime task of strategic management is thinking through the
overall mission of a business:
. . . that is, of asking the question, “What is our business?” This leads to the setting of
objectives, the development of strategies, and the making of today’s decisions for
tomorrow’s results. This clearly must be done by a part of the organization that can see
the entire business; that can balance objectives and the needs of today against the needs
of tomorrow; and that can allocate resources of men and money to key results. 2

Integrating Intuition and Analysis
Edward Deming once said, “In God we trust. All others bring data.” The strategic-
management process can be described as an objective, logical, systematic approach for
making major decisions in an organization. It attempts to organize qualitative and quan-
titative information in a way that allows effective decisions to be made under conditions
of uncertainty. Yet strategic management is not a pure science that lends itself to a nice,
neat, one-two-three approach.
Based on past experiences, judgment, and feelings, most people recognize that
intuition is essential to making good strategic decisions. Intuition is particularly useful for
making decisions in situations of great uncertainty or little precedent. It is also helpful
when highly interrelated variables exist or when it is necessary to choose from several
plausible alternatives. Some managers and owners of businesses profess to have extraordi-
nary abilities for using intuition alone in devising brilliant strategies. For example, Will
Durant, who organized GM, was described by Alfred Sloan as “a man who would proceed
on a course of action guided solely, as far as I could tell, by some intuitive flash of bril-
liance. He never felt obliged to make an engineering hunt for the facts. Yet at times, he was
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astoundingly correct in his judgment.” Albert Einstein acknowledged the importance of
intuition when he said, “I believe in intuition and inspiration. At times I feel certain that
I am right while not knowing the reason. Imagination is more important than knowledge,
because knowledge is limited, whereas imagination embraces the entire world.” 4