Strategic Management
Strategic management is the art and science of formulating, implementing, and assessing cross-functional decisions that will enable an organization to achieve its goals and objectives. The process of strategic management involves setting the organizations mission, vision, and goals, analyzing the external and internal environments, making decisions, and allocating resources to implement the decisions. It is important for an organization to understand the effect of strategic management and organizational objectives on their environment.
Strategic management is the higher level of decision-making that contributes to the overall success of an organization. It is the process of analyzing a company and its environment to create a long-term plan that directs the company and helps it to reach its goals and objectives. This process includes assessing the organizations strengths and weaknesses, researching the competition, and analyzing factors in the external environment that could affect the performance of the organization. Through these assessments, a strategy is formulated which defines the organizations business, industry, and objectives.
There are many approaches to strategic management, but each one relies on two key principles: setting objectives and creating strategies. A good strategic management plan requires an organization to identify the desired outcomes and develop plans to achieve those goals. This process helps an organization pursue goals like market share growth, product innovation, geographic expansion, and customer satisfaction.
The elements of strategic management include an organization’s mission and vision, strategic analysis, strategy formulation, strategy implementation, and strategy evaluation.
An organization’s mission statement is its purpose. It delineates why the organization exists and what its objectives are. Its vision statement is a long-term view of the organization’s future that provides guidance to the organization’s goals and objectives.
Strategic analysis helps an organization understand its external environment, its internal environment, and the strengths and weaknesses of both. In order to make informed decisions, an organization must analyze external conditions such as markets, competition, customers, regulations, and technology, as well as internal metrics like financial position, human resources, and production capabilities.
The next step is the development of a strategy. Strategy formulation involves identifying and evaluating potential options and choosing actions and policies that will support the organization’s mission and vision.
Once a strategy is determined, it must be implemented and evaluated. Strategy implementation involves creating an action plan and allocating resources to execute the strategy. The implementation and assessment of a strategy is ongoing–it should never be seen as a one-time event.
Strategic management is critical for organizations of any size or complexity. Proper implementation of strategic management processes can improve overall organizational performance, by creating competitive advantage, increasing revenues, and ensuring viability.
