Today people from around the world ask, What is strategic management and why is it important?. Strategic management is an ongoing continuous process that’s used to measure and provide direction for the organization. Provides how the organization operates and relates to the external environment, factors affecting its progress, opportunities and process to attain expected results.
Strategy helps any organization stay on course, focused, formulate proper competitive strategies and working methods to adapt at every stage of the business cycle, from entry, maturity and decline of the business cycle for any product or market in which the organization functions.
It helps leaders to come up with a structured plan on how to deal with the objectives. Strategic plans and process of management, reflects the organizations overall performance and how it interacts with the external environment. Any good strategic management program must be aligned with organizations corporate philosophy, vision, mission and objectives.
Strategic Management Process
Process for strategic management involves upholding new culture that introduces competitive edge over competitors of any business or organization. Its a complex process that involves edifying the organizations overall performance, linking its strategic mission, vision and goals to the process of change for improvement performance. Then finally introducing an improved version of the vision that improves future objectives and goals.
Main different types of strategy for management are business strategy, operational and transformational business strategy. Business strategy refers to the process of systematically evaluating the process and objectives of the organizations. Then prescribing solutions to problems hindering process of attain the goals. Operation strategy are those applied in the process of normal business operational to see changes. Transformational business strategy aims to cause change in the old way of doing things to newly proven methods that will work.
Strategic Tools and Techniques
Strategic planning or management is a process of diagnosing need for change in the organization and come up with ways to deal with this problems. Kurt Lewin’s change model proposes the 3 stages of change, which include freezing, unfreezing and refreezing the old ways of doing things. Strategic management utilizes SWOT analysis to measure the organizations strength, weakness and threats. Which then is combined with PESTEL tool to effectively evaluate political, economic, social, ecological, and legal factors affecting the organization.
Importance of Strategic Management
The main importance of strategic planning and management is to provide direction for organization. Archiving competitive advantage, among competition and ensure the organizations programs are operating as expected. In any country, despite location and type of organization and administration.The purpose of strategic management is to outline the process of how the objectives will be attained. In administration and management, this concept outlines actions and its goals that help any organization to archive competitive advantage.
Example of Strategic Management
There’s a wide range of strategies, which may include business strategy to attain certain required results and desirable outcomes. Technology strategy, been used even in government owned institutions duet to the introduction on new public management. Most companies have learnt to compete on changes in technology, product stage mostly useful the diversification process of products and analysis of sales to know which one works and does not.
Human resources strategy, target to balance up organization output and demand for products, This is important to know what number of people is needed for certain type of work to be done, how goals will be met, either in the long run or short run. Marketing strategy for every business to thrive, sales must be made. If your firm is not making sales, there’s a likely hood of going through bankruptcy and closure. Hence most newly established firms and companies set targets to be archived withing the first six months of been operational. Finance strategy helps to make proper measurable decisions to avoid wastage of capital and investments that might become costly for the organization. Through finance strategic planning, managers come up with a proper way of spending income, both in the short and long run of the organization.