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Introduction of SM1

Strategic Management for MBA students

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Bedhaso Reshid
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9 views

Introduction of SM1

Strategic Management for MBA students

Uploaded by

Bedhaso Reshid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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INTRODUCTION OF STRATEGIC MANAGEMENT

What Is Strategic Management?


Strategic management is an approach to the management of an organization’s resources in order
to achieve its goals and objectives.
Strategic management involves setting objectives, analyzing the competitive environment,
analyzing the internal organization, evaluating strategies, and ensuring that management rolls out
the strategies across the organization.
Key Takeaways
• Companies, universities, nonprofits, and other organizations can use strategic
management as a way to set goals and meet objectives.
• Flexible companies may find it easier to make changes to their structure and plans, while
inflexible companies may chafe at a changing environment.
• A strategic manager may oversee strategic management plans and devise ways for
organizations to meet their benchmark goals.

Understanding Strategic Management

Strategic management is divided into several schools of thought. A prescriptive approach to


strategic management outlines how strategies should be developed, while a descriptive approach
focuses on how strategies should be put into practice. These schools differ on whether strategies
are developed through an analytic process, in which all threats and opportunities are accounted
for, or are more like general guiding principles to be applied.

Business culture, the skills and competencies of employees, and organizational structure are all
important factors that influence how an organization can achieve its stated objectives. Inflexible
companies may find it difficult to succeed in a changing business environment. Creating a
barrier between the development of strategies and their implementation can make it difficult for
managers to determine whether objectives have been efficiently met.

While an organization’s upper management is ultimately responsible for its strategy, the
strategies are often sparked by actions and ideas from lower-level managers and employees. An
organization may have several employees devoted to strategy, rather than relying solely on the
chief executive officer (CEO) for guidance.

Because of this reality, organizational leaders focus on learning from past strategies and
examining the environment at large. The collective knowledge is then used to develop future
strategies and to guide the behavior of employees to ensure that the entire organization is moving
forward. For these reasons, effective strategic management requires both an inward and outward
perspective.
Strategic management extends to internal and external communication practices as well as to
tracking, which ensures that the company meets goals as defined in its strategic management
plan.
The 5 Phases of Strategic Management
Strategic management involves managing an organization's resources, analyzing internal and
external forces, and developing strategies to realize goals and objectives. There are five key
phases that can help businesses execute their strategies.
1. An organization must first establish clear, realistic goals. Its goals should answer what
the company wants to achieve and why. Once set, a company can then identify the
objectives, or how the goals will be reached. During this phase, a company can articulate
its vision and long- and short-term goals.
2. Organizations must then be able to examine, understand, and codify what internal and
external forces affect their business and goals, as well as what they need to remain
competitive. Analytical tools, such as SWOT analysis, are helpful during this phase.
3. Based on the results of the analysis, a company can then develop its strategy, outlining
how it will achieve its goals. In this phase, the company will identify the people,
technology, and other resources it needs; how these resources will be allocated to fulfill
tasks; and what performance metrics are needed to measure success. It is also critical to
gain buy-in from stakeholders and business leaders.
4. Once the strategies are defined, it is time for execution. The strategy is taken from
planning to implementation. During this phase, the allocated resources are placed into
action based on their roles and responsibilities.
5. The final stage of strategic management is to evaluate the effectiveness of implemented
strategies using defined metrics. The company will also visit whether ineffective
strategies should be replaced with more viable ones. It should continue to monitor the
business landscape and internal operations, as well as maintain strategies that have
proven effective.

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