Prepare a one-page paper showing your understanding of what a strategic audit is, does, and entails. Do
you understand how it pulls together all of the business disciplines to achieve a certain end?
No references or sources are needed, just write enough to show that you know what a strategic audit is
for, and essentially what it contains.
Strategic Audit
Strategic audit is considered as an evaluator and the examination of the strategic
management process through an approach that seeks to measure an organizations performance
against its corporate strategy. In an instance where a deficiency is noted in the process or in the
performance of an organization, an institute is therefore required to perform a strategic audit,
done by the organizations, in-house auditors or other audit firms that may be contracted to
conduct the audit.
The auditors therefore audit the organizations performance against its current corporate
strategy with the aim of identifying the discrepancies with the organizations current strategy that
are tied or traced poorly to its performance. Upon the completion of these audits, the auditors
develop a report that addresses the audited firm’s findings and submits the reports with the
recommended approaches that would aid the organization in managing some of the noted
deficiencies. The audited organization then seeks to establish the viability of these
recommendations and implements the proposed remedies with the hope of improving its
organizational performance.
How Strategic Audit Pulls Together Business Disciplines
A strategic audit ensures that all the necessary information of a company are secured for
the development of its initiatives and are additionally included in the organizations business plan
that are supported by the management of the organization. An organizations business plan in this
case needs to cover some of the key essential areas that are critical for the success of the
STRATEGIC AUDIT 2
company in the future and that provide guidance to the daily functions of the company’s
activities. The strategic audit therefore aids an organization in clarifying three primary areas that
include: The organizations security in its present business plan and is required to be complete
and includes the relevant information required for its development. A strategic audit additionally
secures an organization logistics for its business plan that includes the determination of a
company’s vision, its feasible financial soundness and if the prioritized actions are bound to
develop the company’s vision. On the other hand, a strategic audit also reveals the manner in
which an organizations management team shares a continual commitment and belief towards the
organizations vision and if they have the same strategies and priorities aimed at enhancing the
functions of the organization as stated in the business plan.
It is significant to ascertain that strategic audits aid organizations in determining the
approaches that can be initiated by an organization in positioning itself in the market. In
achieving this, an audit analyses an organizations current strategy, customers, products, market,
marketing and sales approaches. The audit then matches an organizations current status with the
profile of a company and its brand with the aim of identifying appropriate method of raising an
organizations brand profile and how these products can achieve market exploitation. On the
other hand, a strategic audit establishes an organizations control ratios to ensure its sustained
output in terms of sales and marketing, a factor that includes the organizations implemented
plans aimed at improving its international decision making. The functions of the employees and
their general improvement measures are also considered in this process o understand the nature
of the work deployed in achieving an organizations goal.
The primary concern of a strategic audit is to ensure the returns on a company’s
investment and the achievement of an organizations market share. Strategic audits therefore
indicate the performance of an organization in the market place as compared to the organizations
competitors, a factor that helps in estimating the capital base, value market, market definition,
user base, and the scope of an organizations brand. Another vital element that strategic audits
focus on is the profitability of an organization. This is achieved through an estimation of an
organizations breakeven points and expenses.
