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CHAPTER 1 • THE NATURE OF STRATEGIC MANAGEMENT 15

FIGURE 1-1
A Comprehensive Strategic-Management Model

Chapter 10: Business Ethics, Social Responsibility, and Environmental Sustainability

Perform
External Audit
Chapter 3

Implement
Generate, Implement Strategies—
Develop Vision Establish Evaluate, Strategies— Measure
and Mission Long-Term Marketing, and Evaluate
Statements Objectives and Select Management Finance, Performance
Strategies
Issues
Chapter 2 Chapter 5 Accounting, R&D, Chapter 9
Chapter 6 Chapter 7 and MIS Issues
Chapter 8

Perform
Internal Audit
Chapter 4

Chapter 11: Global/International Issues

Strategy Strategy Strategy
Formulation Implementation Evaluation

Source: Fred R. David,“How Companies Define Their Mission,” Long Range Planning 22, no. 3 (June 1988): 40.

chapters with appropriate areas shaped to show the particular focus of each chapter. These
are three important questions to answer in developing a strategic plan:
Where are we now?
Where do we want to go?
How are we going to get there?
Identifying an organization’s existing vision, mission, objectives, and strategies is the
logical starting point for strategic management because a firm’s present situation and con-
dition may preclude certain strategies and may even dictate a particular course of action.
Every organization has a vision, mission, objectives, and strategy, even if these elements
are not consciously designed, written, or communicated. The answer to where an organiza-
tion is going can be determined largely by where the organization has been!
The strategic-management process is dynamic and continuous. A change in any one
of the major components in the model can necessitate a change in any or all of the other
components. For instance, a shift in the economy could represent a major opportunity and
require a change in long-term objectives and strategies; a failure to accomplish annual
objectives could require a change in policy; or a major competitor’s change in strategy