Strategic management model
| Strategic management model |
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A strategic management model is a framework or approach used by organizations to make strategic decisions and plan for the future. It typically includes steps such as setting objectives, analyzing the internal and external environment, formulating and implementing strategies, and evaluating progress and making adjustments as needed. Some popular strategic management models include SWOT analysis, Porter's Five Forces, and the Balanced Scorecard. The choice of model will depend on the organization's specific needs and goals.
Diagram of the overall concept of strategic management model is shown in the figure below. Particular attention should be paid to the functional information and feedback indicating the dynamic nature of strategic management in the enterprise.
After implementation such model should take into account changes in business environment and their impact on the realized strategy. In the extreme case mission of the company or its chief strategic goal could be modified or adapted.
Definition of Strategic Management
Strategic management involves making decisions and taking actions that can help organizations reaching the goal by adopting systematic way of formulating the strategy, implementing the strategy, evaluating and controlling the strategy implemented. Strategic management integrates various functional areas like[1]:
- marketing,
- management,
- finance,
- accounting,
- human resources,
- production
- information systems in a formal and systematic manner consistent with the objectives of the organization and better performance.
Strategic management comprises three key components[2]:
- Strategy formulation - component the key elements are vision, mission and goals of the organization. The other elements are the external and internal analysis, industry analysis and competitive analysis.
- Strategy Implementation - there are a three key elements that affect strategy implementation. These are organizational structure, people, leadership, processes and organizational systems.
- Strategy Evaluation and Control - the key elements are the evaluation model, processes and criteria and control methods and mechanisms for improving organizational performance and meeting the organizational objectives.
Development of strategic management model
Developing a strategic management model typically involves the following steps:
- Define the organization's mission, vision, and values: These provide a clear sense of direction and purpose for the organization.
- Conduct a SWOT analysis: This will help to identify the organization's strengths, weaknesses, opportunities, and threats, which can be used to inform strategy development.
- Develop strategic objectives: These should be specific, measurable, achievable, relevant, and time-bound (SMART) and aligned with the organization's mission and vision.
- Formulate strategies: This involves identifying the actions and plans needed to achieve the strategic objectives.
- Implement and execute the strategies: This involves allocating resources, building a plan of action, and communicating the plan to all stakeholders.
- Monitor and evaluate progress: This involves tracking progress against the strategic objectives and making adjustments as needed.
- Review and update the model: This involves periodically revisiting the model to ensure it remains relevant and effective in light of changes in the organization's internal and external environment.
It's worth noting that, this is a general outline and the steps may vary depending on the complexity of the organization or the industry it operates in. Additionally, some organizations may prefer to use different strategic management models such as Porter's Five Forces, the Balanced Scorecard, or others.
Developing the strategic management model is important because it provides the basic framework for understanding how strategic management can be operationalised at the company level. The strategic management model provides managers and strategists a greater comprehension of the iterative approach in conducting real strategic management in the organizational setting. The strategic management model begins with the development of the organizational mission and vision. The organizational vision and mission would then be translated into the organizational goals. These elements show the direction and the areas of concern to be attained by an organization. Once these elements have been determined, the role of the manager or strategist is to perform an analysis of the organization. The results of these analyses could help managers and strategists to match the niche areas to be focused, identify distinctive competence of the organization and determine the competitive position the organization should take in order to sustain its competitive edge in the industry[3].
Strategic Managers
Managers play a key role in the strategy-making process. They must take responsibility for formulating strategies, which the aim is to attain a competitive advantage and to putting those strategies into effect. There are two mains types of managers:
- general managers - they are bear responsibility for the overall performance of the company
- functional managers - they are responsible for supervising a particular function, for example: a task, activity, or operation.
General managers have profit and loss responsibility for a product, a business, or the company as a whole. They are responsible for deciding how to create a competitive advantage and achieve high profitability thanks the resources and capital[4].
References
- Dess G. G., Lumpkin G. T., & Eisner A. B. (2010). Strategic management: Text and cases.
- Hill C., Jones G., Schilling M. (2014).'Strategic management: theory’, Cengage Learning.
- Narayan B. (2000) Strategic Management, A.P.H. Publishing Corporation.
Footnotes
Author: Karolina Piotrowska
