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What is Strategic Management ?
Strategic management is a process of making decisions based on an organization’s strategic plans and its current capabilities. It considers a variety of factors, such as competitors, societal needs, external threats and opportunities.
Strategic management is important for organizations because it determines the direction of where they try to go in the future for optimal outcomes. It also provides guidance for decision making in different areas of the business like production, marketing or human resources.
It also helps an organization develop a plan for implementing the strategy and it may affect organizational structure and composition. In addition, organizations will benefit using strategic management if they can utilize their resources in the best manner possible to achieve their objective. This is why it is important to learn some basic strategies, which help with tactical decisions regarding operations of the organization.
Types of Strategic Management
There are three main types of strategic management:
- Internal strategic management- is an entity’s attempt to focus its short-term actions on profitable growth and long-term sustainability. The target of internal strategic management is to make the organization able to perform better in future years.
- External strategic management -is an entity’s attempt to focus its short-term actions on how it can compete better with other companies, increase competitiveness and maximize value through differentiating itself from its competitors. The target of external strategic management is to make the organization able to perform better in future years.
- Inter-organizational strategic management- is an entity’s attempt to focus its short-term actions as an enterprise, usually within industries or geographic regions, on how it can compete better on a global scale.
Importance of Strategic Management
- It maximizes the effectiveness of an organization’s human, financial, and physical resource by aligning its performance with the organization’s mission and strategy. Additionally, it identifies measures for the effectiveness of the strategy, and ensures that the measure is used to evaluate progress.
- A strategic management process helps an organization and its managers plan and execute their operations, by identifying how well they are aligning their vision and mission with their resources (human, financial, physical) in order to reach targets. It also provides a framework for evaluating whether these resources are working as effectively as possible by analyzing performance on key measures.
- Strategic management is important because it gives a company an advantage in the current competitive environment. Strategic management allows an organization to push its potential further, faster. Without strategic management a company will always be looking into the past and never into the future. Also, the systematic approach in planning, organizing, financing, staffing, and controlling operations contribute to the achievement of its overriding objective.
- Strategic management is important because it allows for the organization to have a long term plan in order for the organization to grow and also be able to meet its goals. This can be done through strategic management by developing a business philosophy as well as a mission statement.
- Strategic management is important because it allows for the planning of an organization and where it wants to go. Without strategic management, an organization will never know what it wants and what its plan of action should be.
- Strategic management is important because it allows for the assembly of a team that best fits the organization needs. It does this through a strategic process or plan.
- Strategic management is important because it allows for the allocation of resources best suited for an organization’s situation. This is done through strategic planning and analysis by means of SWOT analysis, environmental analysis and a PESTLE analysis, which leads to strategic decision-making.
- Strategic management is important because it allows an organization to link its activities to its strategy and to measure how closely they are linked.
- Strategic management is important because it allows for the allocation of resources and their proper use by the organization. It does this through strategic planning and analysis.
- Strategic management is important because it allows for the achievement of a business objective or goal through proper resource utilization and a strategic relationship between the resource, purpose, and benefit.
Units Studied Under Strategic Management Coursework.
- Introduction to Strategic Management.
- Analyzing Strategic Management.
- Making Decisions in Strategic Management.
- Organizing and Controlling Tasks in Strategic Management.
- Making Decisions in Business and Organizational Management.
- Strategic Management of a Business Organization.
- Operations Strategy in Strategic Management
- Industry Analysis in Strategic Management.
- Market Analysis in Strategic Management.
- Planning & Budgeting in Strategic Management.
- Organizational Learning in Strategic Management.
- Analysis of Strategic Management.
- Business Process Management
- Information Technology in Strategic Management.
- Strategic Management of Information System..
- Strategic Analysis and Planning.
- Supply Chain Management in Strategic Management
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