Evolution of Strategic management:

In the previous days, talking about the 1920s till 1930s, the managers used to
work out the day-to-day planning method. Till this time they do not
concentrate about the future work. However after this period, managers have
tried to anticipate and predict about the future happenings. They started using
tools like preparation of Budgets and control system like capital budgeting.
However these techniques and tools also failed to emphasize the role of future
adequately. Then long-range planning came into picture, giving the idea of
planning for the long-term future. But it was soon replaced by Strategic
planning and later by Strategic management-a term that is currently being
used to describe the process of Strategic decision-making
The first phase of the planning can be tracked in the mid of 1930s. The
planning at that period was done on the premises of Ad Hoc policy making. The
reason why the need for planning arose at that period was that, many
businesses had just about started operations and were mostly in a single
product line and the ranges of operation were in a limited area. As these
companies grew they expanded their products and also increased their
geographical coverage. The method of using informal control and coordination
was not enough and became irrelevant as these companies expanded. Thus
arose a need to integrate functional areas. Framing policies to guide managerial
actions covered this task of integration. Policies helped to have predefined set
of actions, which helped the manager to make decisions. Policy-making became
the way owners managed their business and it was considered their prime
responsibility
Thus, the increasing environment changes in the 1930s and 1940s planned
policy formation replaced Ad Hoc policy making, which led to the shifting of
emphasis to the integration of the functional areas in a policy changing
environment, showing an indication of the evolution of Strategic management.