Strategic management system

From CEOpedia | Management online
Strategic management system
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Strategic management system is one of several management subsystems of company. It works in close integration with other subsystems in areas such as: financial management, personnel, production, sales, marketing, and others.

System diagnosis

In an attempt to diagnose the strategic management in the company, managers have to identify basic areas of a strategic management. Based on this, managers acquire knowledge of main elements of the system.

System identification

First managers have to determine strategy and the nature of the business. To do this they must answer the following questions:

  • level of business diversity
  • dependence of product portfolio on the nature of the individual sectors,
  • the scope of business (local, national, global),
  • nature of recent activities aimed at improving the effectiveness of key business units and strengthening the current market situation,
  • activities involving adding new business units to a portfolio of activities,
  • activities towards the weak and unappealing business units,
  • activities to obtain a competitive advantage,
  • the proportion of capital spending per individual business units.

System structure

Strategic Management System is a collection of closely related elements, which consist of people and information.

It consists of four constituent subsystems: observation system, early warning system, management information system, and steering system. Strategic management is closely integrated with the management at the operational and tactical levels, and cannot be seen in isolation from other enterprise management systems.

A variety of links and information processes that are present in enterprise strategic management causes high levels of complications of analytical work related to the development of strategic management system.

Strategic management system is presented in the five aspects formula for describing management systems. Each of the described aspects contains determinants i.e. methods, techniques and operations carried out within the framework of the various elements of the strategic management system.

Goal aspect of Strategic management system

Refers to the global activity of company and states formally adopted vision and mission.

Determinants: basic strategies, strategies for the management of SBUs (Strategic Business Unit), business plans, strategies and action plans (at the level of the entire company and SBU).

Object aspect of Strategic management system

Indicates the management, groups and units that perform the tasks of strategic management at all levels of the organizational structure.

Determinants: formalisation of organization, powers of the chief executive, professional specialization of SBU management, strategic management teams, management role in the development of the company, headquarters structure, pragmatic relation to management, efficiency management.

Structural aspect of Strategic management system

Refers to the structure of the management team, advisory teams and the units that make up the strategic management system of the company.

Determinants: hierarchical structure of strategic management, strategic management system organization,organization of strategic planning, strategic control system, SBU organizational structure.

Functional aspect of Strategic management system

Refers to all operations and activities in the strategic management system, and specifies it in procedural terms.

Determinants: principles of strategic management, range of activities, operational objectives of the enterprise, processes and procedures, strategic project management.

Instrumental aspect of Strategic management system

Indicates the set of tools and application used in the diagnostic, analysis, development and implementation of strategy.

Determinants: strategic analysis, economic and organisational diagnosis, rules for the allocation of financial resources, financial models, techniques and methods of economic forecasting, negotiation, decision-making, strategic planning methods, procedures, coordination of programmes, technology management, reengineering, strategic control methods.

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Author: Krzysztof Wozniak