Table of Contents
What Is Strategic Management?
Let me explain strategic management directly to you: it's the process where we evaluate and possibly reorganize a company's resources to hit new goals and objectives. We look at the competitive landscape and the internal setup, assess strategies, and make sure management deploys these new approaches throughout the organization.
Key Takeaways
You should know that companies, universities, nonprofits, and other groups use strategic management to define goals and reach objectives. Flexible companies handle restructuring better than rigid ones. A strategic manager might lead these plans and find ways for the organization to hit its benchmarks.
Management Styles
As organizational leaders, we often learn from past strategies and scrutinize the current environment. Strategic management can involve an analytic process that accounts for all threats and opportunities, or it might just mean applying new guiding principles.
The skills of employees, the business culture, and the organizational structure all affect how we achieve objectives. Inflexible companies struggle in a shifting business world. If there's a gap between strategies and their rollout, it becomes hard for us managers to check if objectives are met efficiently.
While upper management bears the final responsibility for strategy, ideas often come from lower-level managers and employees. We might have dedicated strategy teams instead of relying only on the CEO.
Important Note on Leadership
Participative leadership happens when we include team members in strategic decisions.
Strategic Management Steps
Strategic management turns visions into actions to meet business goals. A prescriptive approach details how we develop strategies, while a descriptive one focuses on implementation. Most organizations follow steps like these:
Steps in Strategic Management
- Goal Setting: Establish clear, realistic goals to express the vision and outline long- and short-term aims, then identify how to reach them.
- Strategic Analysis: Examine internal and external forces affecting the business and goals, using tools like SWOT analysis to stay competitive.
- Formulation: Develop the strategy, specifying resources needed, allocation, and metrics for success, while securing buy-in from stakeholders.
- Execution: Move from planning to action, deploying resources based on roles and responsibilities.
- Determine Success: Evaluate strategies with metrics, replace ineffective ones, and monitor the landscape and operations ongoing.
Examples of Strategic Management
Imagine a large company aiming for higher online sales. We develop a strategy, communicate it, apply it across units, tie it to employee goals, and execute. If done right, it coordinates everything to hit targets.
Or take a for-profit technical college wanting more enrollments and graduations over three years to boost revenue and reputation. We review finances, upgrade classrooms, hire top instructors, and invest in marketing and recruitment.
Why Is Strategic Management Important?
Strategic management lets us analyze areas for improvement. It might follow a company-specific analytic process on threats and opportunities, or use general guidelines applicable anywhere.
What Are the Key Elements of Strategic Management?
It's not one-size-fits-all, but key elements include goal setting, industry and organizational analyses, strategy formation, implementation, and ongoing measurement, monitoring, and control.
What Internal Changes May Be Implemented?
To execute plans, we might realign finances and personnel or alter how we create, sell, and deploy products and services.
The Bottom Line
Strategic management assembles and manages resources to achieve goals. We create and adapt processes that fit the firm, and it doesn't stop at implementation—we reevaluate regularly for the future.
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