The Nature of Strategic Management
By definition, strategic
management is the group of decisions made by the enterprise upper management
that, eventually, can result in formulating and implementing the plans designed
to achieve the business objectives. Because it involves futuristic, advanced
and long-term decision-making, the relevant resources needed for implementation
will be essential. Strategic management is generally thought to mirror the
ongoing monitoring, analysis, planning and assessment of what the company needs
to meet its goals and objectives. For the company to constantly assess their
strategies for success, strategic management process helps in changing the
business environment through configuring required plans for its future existence, fulfilling
a chief responsibility of a board of directors, and setting a direction for the
organization and its employees. It is, mainly, based around the clear
understanding of the company futuristic mission and vision, and the values that
guide its actions. Therefore, the process depends on how far the upper
management commits to strategic planning, which is involved to the company
ability to meet both short and long term goals. It is a three-tier process that
involves planners from corporate, business and functional levels.
Different studies defined strategic management
as the group of actions and decisions made by top management that result in
plans formulation and implementation to achieve the company objectives and
long-term goals. It is the planned use of business resources based on ongoing
evaluation of procedures and processes to reach the company objectives.
Strategic management is all about the identification of strategies carried by
managers to enhance performance and achieve the company competitive advantage.
It takes the form of a bundle of acts and decisions that managers undertake to
reach the desired results of the company performance.
Strategic
Management, as a process, implies
nothing but planning for the appropriate exploitation of the company resources.
It gives a broader perspective to all employees so they can understand how
their jobs fit into the overall organizational plan and how it is related to
the organizational members.
Strategic Management Critical Tasks
From the previous section,
we find that strategic management involves the formulation and implementation
of the company main goals, based on the appropriate usage of available
resources in the company. It gives direction to the company by specifying its
objectives, plans and policies. To appropriately perform its mission, strategic
management comprises the achievement and fulfillment of major tasks:
- Setting different aspects of the company mission, including its statements about the current philosophy and goals of the company
- Evaluate the firm’s external environment, including both competitors and prospect customers
- Perform an analysis that reflects the internal resources and available capabilities of the firm
- Deciding in which business the company will be in and create a strategic vision that can clarify when the organization needs to be headed
- Create measureable objectives using the company vision and mission. For general objectives, there are two types needed: financial and strategic objectives.
- Analyze different available options by matching the company resources with its external environment.
- Select a bundle of long-term grand strategies that are capable of achieving its most favorable options.
- Exploit the available budgeted and human resources to match the company tasks, technologies and structure, while emphasizing its rewarding system.
- Estimate how far the company successfully reached its strategic plans through input processing, for future decision making.
