Strategic Management: Formulation and Implementation

Real-time Systems

As environmental turbulence has begun to approach level 4, firms have begun to use real-time systems, called strategic issue management. Figure 2-14 illustrates strategic issue management.

The ingredients of issue management are the following:

  1. A continuous surveillance is instituted over environmental-business-technological-economic- social-political trends.
  2. The impact and urgency of the trends are estimated and presented as key strategic issues to top management at frequent meetings and whenever a new major threat or opportunity is perceived.
  3. Together with the planning staff, top management then sorts issues into one of four categories:
    • Highly urgent issues of far-reaching effect which require immediate attention.
    • Moderately urgent issues of far-reaching effect which can be resolved during the next planning cycle.
    • Non-urgent issues of far-reaching effect which require continuous monitoring.
    • Issues that are "false alarms" and can be dropped from further consideration.
  4. The urgent issues are assigned for study and resolution, either to existing organizational units, or whenever rapid cross-organizational response is essential, to special taskforses.
  5. The resolution of issues is monitored by top management both for strategic and tactical implications.
  6. The list of the issues and their priorities is a kept up-to-date through periodic review by the top management.

Issues identified through environmental surveillance will differ in the amount of the information they contain.

Strong signal issues will be sufficiently visible and concrete to permit the firm to compute their impact and to devise specific plans for response.

Other issues will contain weak signals, imprecise early indications about impending impactful events. Some issues will slip by the environmental surveyors and become strategic surprises. Particularly, if the firm expects its environmental turbulence to be around level five, it needs to invest a strategic surprise system.