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14 views

Strategic Management

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Known Unknown
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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 BUSINESS ESSENTIALS

What Is Strategic Management?


By
WILL KENTON

Strategic management strategies help companies restructure, set new goals, implement
revised approaches, and determine results.

What Is Strategic Management?


Strategic management evaluates and may reorganize company resources to achieve new goals
and objectives. Strategic management looks at the competitive environment and internal
organization, evaluates strategies, and ensures that management rolls out new approaches across
the company.

KEY TAKEAWAYS

 Companies, universities, nonprofits, and other organizations can use strategic


management to set goals and meet objectives.
 Flexible companies can more easily restructure than inflexible organizations.
 A strategic manager may oversee strategic management plans and devise ways for
organizations to meet their benchmark goals.

Management Styles
Organizational leaders commonly focus on learning from past strategies and examining the
current environment. Strategic management may include an analytic process, where all threats
and opportunities are accounted for, or merely applying new guiding principles.

The skills and competencies of employees, business culture, and organizational


structure influence how an organization can achieve its objectives. Inflexible companies may
find it difficult to succeed in a changing business environment. Creating a barrier between
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.
Participative leadership occurs when management includes team members in the strategic
decision-making process.

Strategic Management Steps


Strategic management helps organizations turn visions into action to reach business goals and
objectives. A prescriptive approach outlines how strategies are developed, while a descriptive
approach focuses on how they are implemented. Most organizations generally follow a series of
steps that include:

 Goal Setting: An organization must establish clear, realistic goals to articulate its vision
and long-and short-term goals. A company can then identify the objectives, or how the
goals will be reached.
 Strategic Analysis: Organizations 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.
 Formulation: A company develops its strategy, outlining how it will achieve its goals.
In this phase, an organization may identify the people, technology, and other resources it
needs, how resources will be allocated to fulfill tasks, and what performance metrics will
measure success. It is also critical to gain buy-in from stakeholders and business leaders.
 Execution: Once the strategies are defined, it is time for execution. The strategy moves
from planning to implementation. The allocated resources are placed into action based on
their roles and responsibilities.
 Determine Success: The final stage of strategic management is to evaluate the
effectiveness of implemented strategies using defined metrics. The company will
determine whether ineffective methods should be replaced with more viable ones. The
organization will monitor the business landscape, and internal operations, and maintain
effective strategies.

Examples of Strategic Management


Consider a large company that wants to achieve more ambitious online sales rates. To meet
this goal, the company will develop a strategy, communicate the plan, apply it across
various units and departments, integrate it with employee goals, and execute it accordingly.
If an effective strategy is created, it will help the company achieve its targets through a
single, coordinated process.

Suppose a for-profit technical college wishes to increase new student enrollment and enrolled
student graduation rates over the next three years. The purpose is to make the college known as
the best buy for a student's money and increase revenue. The school may evaluate its financials
to create high-tech classrooms and hire the most qualified instructors. The college may also
devote resources to marketing and recruitment.
Why Is Strategic Management Important?
Strategic management allows a company to analyze areas for operational improvement. It may
follow an analytical process—identifying specific threats and specific opportunities—unique to
the company. A company may choose general strategic management guidelines that apply to any
company.

What Are the Key Elements of Strategic Management?


Strategic management is not a one-size-fits-all strategy. However, there are key elements that are
found to be critical. These include goal setting, industry and organizational analyses, strategy
formation, strategy implementation; and the measurement, monitoring, and controlling of
strategies.

What Internal Changes May Be Implemented in Strategic


Management?
Some action steps that companies may take to execute their strategic management plans include
realigning financial and personnel resources or changing the methods to create, sell, and deploy
products and services.

The Bottom Line


Strategic management is the assembling and management of resources to achieve a company's
goals and objectives. Companies create and adapt a strategic management process that works
best for the firm. Strategic management does not end with implementation but is commonly
reevaluated well into the organization's future.

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