Definition of strategic management
Strategic management is understood as a process of information and decision-making, which is supported by the management functions of planning, organization, motivation and control. Its purpose is to rule on key business issues, company's survival and development, with particular emphasis on environmental impacts and crucial factors of productive capacity.
Strategic management is focused on the one hand to global operations, on the other on particularly sensitive spheres of activity, which due to its uniqueness is crucial for the whole company. This division was adopted due to the fact that the key business issues relate to key areas of activity across the company and it separated the strategic units.
Global activity can be understood in two ways:
- first, as overall purpose related economic activity,
- second, it is a company activity on every market of the world.
Globalization, is understood as overall economic activity and is the supreme and universal feature of strategic management, regardless of whether it concerns a large or small business. Globalization in the sense of company activity on whole world creates demand to develop strategic management towards the creation of the vision, mission and corporate objectives, and policies for the internationalization of the company.
Levels of Strategic Management
The specificity of strategic management lies in the fact that it is formed at three levels:
- the level of the entire company,
- the level of strategic business units (SBU), with regard to sector of activity,
- at the functional level of the entire company, as well as individual SBU.
Such an arrangement results in that the scope of strategic management varies according to individual organizations. Companies uses different management strategy and methods used for the analytical and diagnostic purposes.
Strategic management approach has two characteristics:
- clearly stresses diagnostic phase (strategic analysis),
- uses projection phase of the formulation of management strategies.
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