strategic management

strategic management

The Role of Strategic Management in Organizational Success

1. Introduction to Strategic Management

The responsibilities of strategic managers include both strategic plan formulation as an essential stage leading to effective goal implementation. And thus, its implementation is directed by tactical managers. In this particular sense, strategic management is actually about integrating diverse resources, which belong to the company, and do so in a pattern that is ideal for the realization of organizational results (i.e. for the success of the firm). For strategic management to be successful, emphasis must be placed upon consumer and customer service, minimal levels of price levels, cost containment, quality of items produced, and the creation of records of service (and quality of products offered). Finally, a prime concern of strategic management now remains the development and utilization of learning systems and knowledge supporting continuous organizational innovation.

A classic definition of strategic management is the “procedural ongoing interaction of a company with its external environment, as well as within itself, to become more proactive and goal-oriented in the long term.” Strategic management consists of three interrelated procedures. The first includes strategic strategy formulation (or setting targeted objectives as well as a plan for achieving these goals). The second step is the execution of the strategic plan. The third phase or the completion phase includes monitoring the form, conducting adjustments, and rearranging strategies in response to external opportunities and threats, as well as internal benefits (as mentioned earlier). Indeed, strategic management presently involves designing or formulating targets, plans, and organizational structures, which concentrate on corporate performance and future success.

2. Key Concepts and Theories in Strategic Management

Strategic management is a complex, ongoing, and unstructured process. Strategic thinking is an unpredictable, constantly moving and ever-changing stream of ideas, considerations, opinions, emotions, realizations, and concepts that turns a sporadic collection of discrete possibilities into suitable projects. Making appropriate and successful action depends on the right strategy. The selected strategy integrates a firm’s actions within its network and within its strategic contexts. Strategic management is customer-focused, market-driven, and grasps a clear sense of an industry’s likely future and is forward-looking. It recognizes the importance of a firm’s opportunity-driven appetite for innovation and non-incremental growth and includes the role of market-seeking visionaries. Furthermore, strategic management compels realization of the need for a new strategy road to success due to changes in company operations’ strategies, company ownership, and frequent product policy pivots.

The goal of strategic management is to develop a firm-specific business model that will allow a company to perform at a superior level, on a sustainable basis, over the long term. The inputs of the process include information on the readiness of a firm’s resources and the competitive environment, the firm’s mission, goals, and strategic vision, and the options a firm may use to satisfy customers and defend itself against competitive pressures. The strategic management process is not linear and conclusions at one point in the process frequently must be revisited. Many viable options exist and the process includes a complex stage where the advantages and disadvantages of existing strategy options are weighed, where proposals for new options are generated and formally evaluated to see if they can, indeed, be safely adopted.

3. Strategic Management Process and Implementation

The strategic management process itself consists of a series of steps. The first step involves establishing organizational objectives. Next, top management must define the organization’s mission statement to reflect its objectives, which states whom it plans to serve and to what end. The strategic formulation stage is divided into the three general categories: environmental, task, and internal analysis. Situational forecasting, development of alternative missions or strategies, and projections of the expected future competencies are also included. Strategy evaluation and choice involve decision making between alternative strategies and objectives that must also comply with the performance criteria. The last step, which is implementation, controls and promotes the effectiveness of the strategies. These management functions are performed within the context of the organization’s internal everyday operations.

The strategic management process developed in the 1970s is a series of analytical rather than action steps. Because it is impossible to foresee what will happen to alter strategies, the model discussed here is an ongoing process of planning, research, and control. It includes the environment, the task, and the large complex organization from both an overall and departmental level.

4. Strategic Management in Different Organizational Contexts

Regrettably, strategic management is often seen as only a method of creating large, formal strategic business plans. On the contrary, strategic management should imply a relatively simple process of managing strategically the success of any kind of organization. In other words, according to ASCOP, strategic management is a way of thinking, not a procedural methodology. Consequently, strategic management is applicable to all types of organizations: business, government, and not-for-profit organizations. Besides being applicable to different kinds of organizations, strategic management is a type of management that deals with the product of entire complex versus fragmented piecemeal organizational activities, with the long-term future, with the achievement rather than the performance process and with the success of the customers and other stakeholders rather than with the excellence or quality of the people assigned to achieve those goals.

Strategic management occurs in three organizational contexts: small business, multinational organizations, and for-profit and not-for-profit organizations. The major difference among the types of organizations lies in the multiple stakeholders found in government and not-for-profit and for-profit organizations and in the need to balance economic and social responsibilities in government and not-for-profit organizations. Small businesses, multinational organizations, and total quality management organizations are commonly featured in the literature on strategic management.

5. The Future of Strategic Management

Getting the strategy right and properly implementing it would, of course, require input from a number of different disciplines apart from that of strategic management itself. It is arguable that a major part of the success of an organization can be attributed to good luck and the ability to recognize it. However, it is simplistic to suggest that management’s only concern is to increase the luck of the organization; strategic managers must seek and recognize windows of opportunity as well as act on them. In essence, this is the process of identifying and acting on strategic opportunities that can provide a focus for the organization’s growth and development. In addition, strategic managers also have a crucial role to play in identifying potential threats and subsequently coming up with appropriate responses, and so playing a small part in shortening the odds somewhat in favor of the organization. The study of strategic management is becoming more critical today because of the dynamic nature of the competitive, economic, social, and technological challenges faced by many organizations.

Given the realities of the ever-changing competitive and regulatory environments in which organizations operate, the strategic management of both for-profit as well as not-for-profit organizations is likely to become more challenging and necessary. With the rapid rate of technological change and the increasing global nature of many industries, long-term strategic issues will tend to become even more critical. In addition, the strategic management process is itself likely to develop further as greater emphasis is placed on the internal strategic capability of individual organizations. The potential for strategic management to propel an organization to success, however, depends critically on the details of both its formulation and its implementation. Getting the strategy right, in terms of a tight fit between external opportunities and threats on the one hand, and the specific set of internal strengths and weaknesses on the other hand, is vital in an increasingly competitive world characterized by increasing globalization and technological advances. Correctly implementing that strategy is, of course, the key component of success.