Final answer:
The first phase of strategic management in corporations is basic financial planning, focusing on short-term financial goals. As firms grow, they attract outside investors based on available company information, leading to more sophisticated strategic management phases.
Step-by-step explanation:
Research indicates that strategic management in corporations evolves through four sequential phases. The first phase of this process is basic financial planning, wherein companies focus on maintaining short-term budgetary control and financial stability. As corporations grow and establish themselves, strategic planning becomes less about personal knowledge of managers and their plans, and more about formalizing strategies that will attract outside investors such as bondholders and shareholders, based on the widespread availability of information on the company's products, revenues, costs, and profits. This dynamic plays a crucial role as firms transition from basic financial planning to more complex strategic management phases, ultimately guiding their long-term growth and prosperity.
For example, a company may use market research and competitive analysis to identify new target markets for expansion.