Strategy formulation Process

Strategy formulation is the process by which an organization chooses the most appropriate courses of action to achieve its defined goals. This shows what an organization is working towards. It is vital that the organization’s strategy is clear to its employees as well as its clients.

Step 1: Define the Organization

If an organization does not know who the customers are then their needs will not be fulfilled. This is important for the HR role as it is vital that the requirements of the organization are fully understood by the HR department in order to ensure everyone is working together.

Step 2: Define Strategic Vision & Mission

An organization’s strategic mission offers a long-range perspective of what the organization strives for going forward. Mintzberg describes the mission as “the organization’s basic function in society, in terms of the products and services it produces for its customers”.

Elements of a strong strategic mission statement should include the values that the organization holds the nature of the business or position the organization holds in the marketplace, and the organization’s vision for where it wants to be in the future. HR has a vital role in determining the mission to sets out what the company requires to going forward from an HR perspective.

Step 3: Define Strategic Objectives

Identify the performance objectives needed to reach clearly stated objectives. These objectives may include market position relative to the competition, production of goods and services, desired market share, corporation expansion, and sales increases.

This plays a huge part in the HR function to sets out what the company requires to hire, retain and develop talented employees. Additionally, HR should ensure that every employee within the organization is made aware of their role and how it ties in with the companies objectives.

Step 4: Define the Strategy

The organization determines where it fits into the marketplace. This applies not only to the organization as a whole but to each individual unit and department throughout the enterprise. The HR function can play a huge part in this stage as it has access to unique data from competitors as well as its own organization.

Step 5: Strategy Implementation:

Developing a strategy is only effective if it is put into place. An organization may take all the necessary steps to understand the marketplace and identify the competition. However, without implementing the strategy, the organization’s work will be of little to no value. The methods employed for implementing strategies are known as tactics or business plans.

HR plays the part of ensuring everyone fully understands the strategy. This is important because if it is not understood, then people cannot commit or work towards it.

Step 6: Strategy Evaluation:

An evaluation of the progress must be carried out in order to understand if the strategy is working. Not only should this be carried out once, but it should be carried out on a regular basis due to external factors constantly changing. a regular evaluation of processes and results is vital to ongoing success. If goals are not being met, the organization must be adaptable and flexible to recognize that changes may be needed.

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