Strategic management is the process of specifying an organization's objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. It is the highest level of managerial activity. It is not a task, but a rather a set of managerial skills that ought to be exerted throughout the organization, in a wide array of functions.
An organization’s strategy must be appropriate for its resources, environmental circumstances, and core objectives. The process involves matching the company's strategic advantages to the business environment the organization faces. One objective of an overall corporate strategy is to put the organization into a position to carry out its mission effectively and efficiently.
A good corporate strategy should integrate an organization’s goals, policies, and tactics into a cohesive whole, and must be based on business realities. Business enterprises can fail despite 'excellent' strategy because the world changes in a way they failed to understand. Strategy must connect with vision, purpose and likely future trends.
Strategic management can be seen as a combination of strategy formulation and strategy implementation, but strategy must be closely aligned with purpose.
Strategy formulation involves doing a situation analysis: both internal and external, both micro-environmental and macro-environmental; setting objectives�"crafting vision statements (long term view of a possible future), mission statements (the role that the organization gives itself in society), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives; and planning. This three-step strategy formulation process is sometimes described as determining where you are now, determining where you want to go, and then determining how to get there. These are the essence of strategic planning.
Strategy implementation involves allocation of sufficient resources (financial, personnel, time, technology support); establishing a chain of command or some alternative structure (such as cross functional teams); assigning responsibility of specific tasks or processes to specific individuals or groups; managing the process�"monitoring results, comparing to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, and making adjustments to the process as necessary. When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with legacy processes.
Strategy formulation and implementation is an on-going, never-ending, integrated process requiring continuous reassessment and reformation. Strategic management is dynamic. It involves a complex pattern of actions and reactions. It is partially planned and partially unplanned. Strategy is both planned and emergent, dynamic, and interactive.
For strategic management to be a success, organizations must not fail to follow the plan. They should be guided by the set of objectives that they have formulated, envisioning a prosperous business. They should strive to understand customers more thoroughly. Over-estimation of resource competence and under-estimation of time requirements should be avoided. Employee and senior management commitment should be obtained through keeping communication channels open and healthy. Most crucially, the management should acquire the ability to predict environmental reaction and manage change.
Copyright 2007 Ismael D. Tabije
What is one of the biggest differences between a good business and a successful business? Two business could have all the same resources, sell the same quality product to the same market and yet one will become successful and the other will make enough to keep operations going. What is the difference between the two organizations?
When it comes to strategically managing their organization one will be proactive in the planning and implementing and the other will be reactive. Being proactive doesn't mean you have to know what is going to happen in the future. It means that you are anticipating change and then when the opportunity comes to change you are ready to take advantage of it.
For instance if you are running a business the way you are running it because it is how it has worked in the past then you are reacting to events that have already occurred. Instead if you are doing things for your business because that is what you honestly see will lead to success in the future then you are proactively making business decisions. Strategic management is not dwelling on the past; instead it is looking to the future.
When strategically managing your business one of the first realizations you have to arrive at is that no two businesses are the same. It is one thing to get inspiration from the successful businesses around you but to attempt to model your business completely after another is your first step to failure. You have to assess your strengths and your weaknesses, both within your business and within yourself.
So what is the written out process for successfully strategically managing your business? You can find one on the internet pretty easily but before you even go looking for one there is one more point about strategic management you have to understand. Strategic management is more than a process, it is a frame of mind. If you only look at it as a written out list of things to check off you will never know the full potential of strategic management.
Strategic Management can and will affect your business if you learn to implement it and how to approach it. There are many sources to find out more on strategically managing your business, everything from articles to seminars to trainers. Take advantage of at least a couple of those resources and you may find it made the difference your business being and being successful.
Both Ismael D. Tabije & Bart Icles are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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