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Why is it important to view strategic management as a processSol

Why is it important to view strategic management as a processSol

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Why is it important to view strategic management as a

process

Solution

The importance of strategic management in the financial

crisis

At the other end completely of the scale, we would argue

that there was a major failure in strategic planning by

almost all the major global financial institutions, as well as

in the governance of these organisations as there was

clearly not enough knowledge or information in key places

which would have signalled - via the direct, or more often

indirect connection to it - the risk that the sub-prime

lending market was running. An almost blinkered attitude

persisted that said \"We don\'t do sub-prime\", when due to

the globalised nature of the financial system this risk

affected them anyway, whether or not they had direct

relationships with players or (re-)insurers in the sub-prime

space. So we place a major part of the blame on those

financial institutions, not just the sub-prime lenders

themselves and the lending policy and bonus culture that

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actually provoked the credit crunch.

As we argue elsewhere on this site, had there been proper,

regular and direct dialogue between the various

stakeholders and especially trading partners of these

institutions, and detailed analysis of the strategic

positioning in relation to the sub-prime market, the greater

part of the credit crunch could have been avoided. The

resulting recession could therefore have been much less

severe. We find it inconceivable that using our approach

and independent market research (which would have

picked up on affordability issues, for example), such risks

would not have been picked up and acted upon. For us,

therefore, what happened was a failure both of corporate

governance and of strategic management.

In the current economic climate, whatever the size of your

business or organisation, the importance of strategic

management is particularly great. To avoid drifting into an

iceberg flow, or if already there, to plan a way out and

minimise the risk of actually hitting one, you need the

visibility good strategic planning gives you. You may will

suffer the same fate as the Titanic, but you stand a much

better chance with it. And that you owe to ALL your

stakeholders, so consider strategic management as vitally

important to good corporate governance too.

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Why is it important to view strategic management as a process Solution The importance of strategic management in the financial crisis At the other end completely of the scale, we would argue that there was a major failure in strategic planning by almost all the major global financial institutions, as well as in the governance of these organisations as there was clearly not enough knowledge or information in key places which would have signalled - via the direct, or more often indirect connection to it - the risk that the sub-prime lending market was running. An almost blinkered attitude persisted that said \"We don\'t do sub-prime\", when due to the globalised nature of the financial system this risk affected them anyway, whether or not they had direct relationships with players or (re-)insurers in the sub-prime space. So we place a major part of the blame on those financial institutio ...
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