DEFINITION ,NEED AND STEPS
Strategic management is the ongoing planning, monitoring, analysis and assessment of all necessities an organization needs to meet its goals and objectives. Changes in business environments will require organizations to constantly assess their strategies for success. The strategic management process helps organizations take stock of their present situation, chalk out strategies, deploy them and analyze the effectiveness of the implemented management strategies.
Why do we need constant strategic management process in place?
As enumerated in the above mentioned chart, in every dynamic business environment the organizational goals keep on evolving and changing, this needs to strategies on the resource management as they do not remain the same. Studying the perfect competition market place we can assess the requirements ,the evolution of the new technology also forces the organizations to adapt the change for staying competitive in the market , new technology may change the perception of the product or even product may be obsolete[in some cases]. Adaptation of new technology needs lot of professional inputs and studies before implementing , now it depends on the organisations to take all these challenges by SURPRISE or be prepared in advance for it , this advance perpetration is part of strategic management.
Benefits of strategic management
Strategic management is generally thought to have financial and non financial benefits. A strategic management process helps an organization and its leadership to think about and plan for its future existence, fulfilling a chief responsibility of a board of directors. Strategic management sets a direction for the organization and its employees. Unlike once-and-done strategic plans, effective strategic management continuously plans, monitors and tests an organization’s activities, resulting in greater operational efficiency, market share and profitability.
Strategic management concepts
Strategic management is based around an organization’s clear understanding of its mission; its vision for where it wants to be in the future; and the values that will guide its actions. The process requires a commitment to strategic planning, a subset of business management that involves an organization’s ability to set both short- and long-term goals. Strategic planning also includes the planning of strategic decisions, activities and resource allocation needed to achieve those goals.
Having a defined process for managing an institution’s strategies will help organizations make logical decisions and develop new goals quickly in order to keep pace with evolving technology, market and business conditions. Strategic management can, thus, help an organization gain competitive advantage, improve market share and plan for its future.
STAGES OF STRATEGIC MANAGEMENT PROCESS
There are many schools of thought on how to do strategic management, and academics and managers have developed numerous frameworks to guide the strategic management process. In general, the process typically includes five phases:
Effective communication, data collection and organizational culture also play an important part in the strategic management process — especially at large, complex companies. Lack of communication and a negative corporate culture can result in a misalignment of the organization’s strategic management plan and the activities undertaken by its various business units and departments.
THE RIGHT STRATEGY MANAGEMENT
The types of strategic management strategies have changed over time. Prominent thinkers in the field include the Peter Drucker; Among his contributions was the seminal idea that the purpose of a business is to create a customer, and what the customer wants determines what a business is about. Management’s main job is marshaling the resources and enabling employees to efficiently address customers’ evolving needs and preferences.
Distinctive competence, a term introduced in 1957 by sociology and law scholar Philip Selznick, focused on the idea of core competencies and competitive advantage in strategic management theory. This enabled the creation of frameworks for assessing the strengths and weaknesses of an organization in relation to the threats and opportunities in its external environment.
Canadian management scientist Henry Mintzberg concluded that the strategic management process could be more dynamic and less predictable than management theorists had thought. In his 1987 paper, “The Strategy Concept I: Five Ps for Strategy,[PLAN ,PLOY ,PATTERN,POSITION AND PREPECTIVE]” he argued “the field of strategic management cannot afford to rely on a single definition of strategy.” Instead, he outlined five definitions of strategy and their interrelationships:
INTERNAL BUSINESS EFFICIENCY
Internal business efficiency term reflects the current buildup and operative level of the organisation, whether the organisation is able to take up to new changes, would the new methodology , technology and the space management allows the change. All these could be assessed by
SWOT analysis
A SWOT analysis is one of the types of strategic management frameworks used by organizations to build and test their business strategies. A SWOT analysis identifies and compares the strengths and weaknesses of an organization with the external opportunities and threats of its environment. The SWOT analysis clarifies the internal, external and other factors that can have an impact on an organization’s goals and objectives.
The SWOT process helps determine the PRODUCT , PRICE ,PLACE AND POSITIONING of the output and enables the organizational leaders determine whether the organization’s resources and abilities will be effective in the competitive environment or not.
Value of organizational culture
Organizational culture can determine the success and failure of a business and is a key component that strategic leaders must consider in the strategic management process. Culture is a major factor in the way people in an organization outline objectives, execute tasks and organize resources. A strong organizational culture will make it easier for leaders and managers to motivate employees to execute their tasks in alignment with the outlined strategies. At organizations where lower-level managers and employees are expected to be involved in the decision-making and strategy, the strategic management process should enable them to do so.
It is important to create strategies that are suitable for the organization’s culture.
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