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Purposes of Strategic management

Purposes of Strategic management

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Strategic Management - An Introduction

Strategic Management is all about identification and description of the strategies that

managers can carry so as to achieve better performance and a competitive advantage for their

organization. An organization is said to have competitive advantage if its profitability is

higher than the average profitability for all companies in its industry.

Strategic management can also be defined as a bundle of decisions and acts which a manager

undertakes and which decides the result of the firm’s performance. The manager must have a

thorough knowledge and analysis of the general and competitive organizational environment

so as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses,

Opportunities, and Threats), i.e., they should make best possible utilization of strengths,

minimize the organizational weaknesses, make use of arising opportunities from the business

environment and shouldn’t ignore the threats. Strategic management is nothing but planning

for both predictable as well as unfeasible

contingencies. It is applicable to both small as well as large organizations as even the smallest

organization face competition and, by formulating and implementing appropriate strategies,

they can attain sustainable competitive advantage.

Strategic Management is a way in which strategists set the objectives and proceed about

attaining them. It deals with making and implementing decisions about future direction of an

organization. It helps us to identify the direction in which an organization is moving.

Strategic management is a continuous process that evaluates and controls the business and the

industries in which an organization is involved; evaluates its competitors and sets goals and

strategies to meet all existing and potential competitors; and then reevaluates strategies on a

regular basis to determine how it has been implemented and whether it was successful or

does it needs replacement.

Strategic Management gives a broader perspective to the employees of an organization and

they can better understand how their job fits into the entire organizational plan and how it is

co-related to other organizational members. It is nothing but the art of managing employees

in a manner which maximizes the ability of achieving business objectives. The employees

become more trustworthy, more committed and more satisfied as they can co-relate

themselves very well with each organizational task. They can understand the reaction of

environmental changes on the organization and the probable response of the organization

with the help of strategic management. Thus the employees can judge the impact of such

changes on their own job and can effectively face the changes. The managers and employees

must do appropriate things in appropriate manner. They need to be both effective as well as

efficient.

One of the major role of strategic management is to incorporate various functional areas of

the organization completely, as well as, to ensure these functional areas harmonize and get

together well. Another role of strategic management is to keep a continuous eye on the goals

and objectives of the organization.

Strategy is a well defined roadmap of an organization. It defines the overall mission,

vision and direction of an organization. The objective of a strategy is to maximize an

organization’s strengths and to minimize the strengths of the competitors.

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Strategy, in short, bridges the gap between “where we are” and “where we want to be”

Strategy can also be defined as knowledge of the goals, the uncertainty of events

and the need to take into consideration the likely or actual behavior of others. Strategy is the

blueprint of decisions in an organization that shows its objectives and goals, reduces the key

policies, and plans for achieving these goals, and defines the business the company is to carry

on, the type of economic and human organization it wants to be, and the contribution it plans

to make to its shareholders, customers and society at large.

Features of Strategy

1. Strategy is Significant because it is not possible to foresee the future. Without a

perfect foresight, the firms must be ready to deal with the uncertain events which

constitute the business environment.

2. Strategy deals with long term developments rather than routine operations, i.e. it deals

with probability of innovations or new products, new methods of productions, or new

markets to be developed in future.

3. Strategy is created to take into account the probable behavior of customers and

competitors. Strategies dealing with employees will predict the employee behavior.

Component:

The strategy statement of a firm sets the firm’s long-term strategic direction and broad policy

directions. It gives the firm a clear sense of direction and a blueprint for the firm’s activities

for the upcoming years. The main constituents of a strategic statement are as follows:

1. Strategic Intent

An organization’s strategic intent is the purpose that it exists and why it will continue

to exist, providing it maintains a competitive advantage. Strategic intent gives a

picture about what an organization must get into immediately in order to achieve the

company’s vision. It motivates the people. It clarifies the vision of the vision of the

company. Strategic intent helps management to emphasize and concentrate on the

priorities. Strategic intent is, nothing but, the influencing of an organization’s

resource potential and core competencies to achieve what at first may seem to be

unachievable goals in the competitive environment. A well expressed strategic intent

should guide/steer the development of strategic intent or the setting of goals and

objectives that require that all of organization’s competencies be controlled to

maximum value.

Strategic intent includes directing organization’s attention on the need of winning;

inspiring people by telling them that the targets are valuable; encouraging individual

and team participation as well as contribution; and utilizing intent to direct allocation

of resources. Strategic intent differs from strategic fit in a way that while strategic fit

deals with harmonizing available resources and potentials to the external

environment, strategic intent emphasizes on building new resources and potentials so

as to create and exploit future opportunities.

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Strategic Management - An Introduction Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry. Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. The manager must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats. Strategic management is nothing but planning for both predictable as well as unfeasible contingencies. It is applicable to both small as well as large organizations as even the smallest organization face competition and, by formulating and implementing appropriate strategies, they can attain sustainable competitive advantage. Strategic Management is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about future direction of an organ ...
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