Importance of strategic management
| Importance of strategic management |
|---|
| See also |
The importance of strategic management results from its role in ensuring optimal use of resources, achieving competitive advantage and long-term growth of the enterprise. Strategic management is an integral part of business management, and therefore must take into account constraints such as conflicting interests of groups affecting the functioning of the enterprise, financial barriers, resource constraints, lack of information, strategic potential, skills gaps, anticipated changes in the environment, activities competition.
Strategic management is a field of knowledge and specific practical activities. It is different compared to traditional approaches and methods of management. Strategic management includes a comprehensive range of business organization. It relates to the competitors, resources, functions and objectives[1].
Strategic Managers
Managers play a key role in the strategy-making process. They must take responsibility for formulating strategies to attain a competitive advantage and to putting those strategies into effect.
They must lead the process of creating strategies. There are two mains types of managers:
- general managers - they are bear responsihility for the overall performance of the company
- functional managers - they are responsible for supervising a particular function, for example: a task, activity, or operation, such as accounting, marketing, research and development.
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 they have at their disposal[2].
Strategic Management Model
The main elements of strategic management:
- Performing an environmental analysis.
- Establishing organizational direction.
- Formulating organizational strategy.
- Implementing organizational strategy.
- Evaluating and controlling strategy.
Strategic management is a dynamic and continuous process. The major models differ primarily in the degree of detail, explicitness and complexity. These differences derive from the differences in backgrounds and experiences. Strategic management involves the strategic thinking and related concepts of strategic planning. Strategic planning is analytical in nature, it refers to formalized procedures to produce the data and analyses used as inputs for strategic thinking. Strategic planning happens around the strategic thinking or strategy making activity.It planning may also refer to control mechanisms used to implement the strategy once it is determined[3].
References
- Graetz, F. (2002), Strategic thinking versus strategic planning: towards understanding the complementarities, MCB University Press
- Hill C., Jones G., Schilling M. (2014).'Strategic management: theory', Cengage Learning.
- Hoskisson, R. E., Wan, W. P., Yiu, D., & Hitt, M. A. (1999). Theory and research in strategic management: Swings of a pendulum. Journal of management, 25(3), 417-456.
- Jemison, D. B. (1981). The importance of an integrative approach to strategic management research. Academy of Management Review, 6(4), 601-608.
Footnotes
Author: Agnieszka Pytel
