Strategic management functions

From CEOpedia | Management online

Strategic management functions consist of specific methods and techniques used in the different stages of the strategic management process: analysis, planning, implementation and strategic control. Summary of various management activities (functions) used in the strategic management process is presented below. See also Category:Strategic management for broader description of the methodology and detailed description of strategic management functions.

Formulating business strategy

  1. Determining the purpose of company.
  2. Creating a mission and vision:
  3. Formulation of rules defining the competitive position in the company's political, legal, economic, social, technological and natural environment:
Fig. 1. Strategic management functions
  1. Developing a strategy for the company as a whole

Strategic market segmentation

  1. Identification of the strategic segments.
  2. Developing a coherent market segment strategy.
  3. Creating a decentralization policy.
  4. Designing and implementing policy and strategy for chosen segments.

Creating comprehensive strategic control system

  1. Defining assumptions for strategic control.
  2. Selection of criteria for the evaluation.
  3. Implementing control methods and techniques.
  4. Improving the strategic control model.

Examples of Strategic management functions

  • Analysis: This involves analyzing the external environment for opportunities and threats, as well as the internal environment for strengths and weaknesses. Strategic analysis can involve the use of tools such as SWOT (strengths, weaknesses, opportunities, and threats) analysis, PEST (political, economic, social, and technological) analysis, and Porter’s Five Forces.
  • Planning: Planning involves setting objectives and developing strategies to achieve those objectives. This includes developing a mission and vision, establishing core values, identifying stakeholders, and assessing the organization’s resources and capabilities.
  • Implementation: This involves translating the strategies into action. This includes developing an implementation plan, assigning resources, and ensuring that the organization is ready to execute the plan.
  • Strategic Control: This involves monitoring the implementation of the strategies, analyzing the results, and making corrective adjustments as needed. It also involves evaluating the strategies and making changes as needed.

Advantages of Strategic management functions

  • Strategic management functions allow organizations to assess their strengths and weaknesses in order to develop strategies to improve their performance.
  • The use of strategic management functions allows an organization to identify potential threats and opportunities in their environment and develop strategies to capitalize on them.
  • Strategic management functions provide a framework for setting objectives and measuring performance.
  • Strategic management functions allow organizations to align their resources and activities with their objectives and strategies.
  • The use of strategic management functions allows organizations to develop contingency plans in case of unexpected changes in the environment.
  • Strategic management functions help organizations achieve long-term sustainability and success by planning for the future.

Limitations of Strategic management functions

  • Strategic management functions are limited in their ability to predict the future. Various external factors such as the economy, technological advances, and competition can rapidly change the competitive landscape, which makes it difficult to accurately plan and anticipate future situations.
  • Strategic management functions cannot guarantee success. Often, strategies can be developed and implemented, but there are no guarantees that they will be successful.
  • Strategic management functions are limited in their ability to ensure optimal resource allocation. Organizations often struggle to match the right resources to the right strategies, which can lead to inefficient use of resources.
  • Strategic management functions can be limited by the availability of resources. Organizations often lack the resources necessary to effectively implement their strategies, which can limit their ability to achieve objectives.
  • Strategic management functions can be limited by the availability of information. Without accurate and up-to-date information, organizations can struggle to develop effective strategies and make accurate decisions.

Other approaches related to Strategic management functions

The following list of approaches to strategic management functions provide a broader view of the methodology:

  • Strategic Analysis - This function involves researching the internal and external environment to identify the organization’s strengths, weaknesses, opportunities, and threats. It involves evaluating the competitive environment, identifying resources and capabilities, and assessing the organization’s competitive position.
  • Strategy Formulation - This involves developing a strategic plan for the organization. It involves setting goals, determining the courses of action, and establishing the strategies for achieving the goals. It also requires making decisions about how resources will be allocated, how the organization will compete, and what strategies will be used to achieve desired performance.
  • Implementation - This involves translating the strategies into action. It involves developing action plans, assigning tasks, setting deadlines, and allocating resources.
  • Strategic Control - This involves monitoring activities to ensure that the strategies are being implemented as planned. It involves evaluating the performance of the organization and making necessary changes to the strategies or plans.

Strategic management functions involve a set of activities to guide an organization towards achieving its goals. These activities include strategic analysis, strategy formulation, implementation, and strategic control. Each function requires careful research and analysis to identify the organization’s strengths, weaknesses, opportunities, and threats and develop effective strategies and plans. Monitoring activities and evaluating performance is also necessary to ensure that the strategies are implemented as planned.

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