Strategic management analyzes the major initiatives taken by a company's top management on
behalf of owners, involving resources and performance in internal and
external environments. It entails specifying the organization's mission,
vision and objectives, developing policies and plans, often in terms of
projects
and programs, which are designed to achieve these objectives, and then
allocating resources to implement the policies and plans, projects and
programs. A balanced scorecard is often used to evaluate the overall
performance of the business and its progress towards objectives. Recent
studies and leading management theorists have advocated that strategy needs
to start with stakeholders expectations and use a modified balanced
scorecard which includes all stakeholders.
Strategic management is a level of managerial activity below setting goals
and above tactics. Strategic management provides overall direction to the
enterprise and is closely related to the field of Organization Studies. In
the field of business administration it is useful to talk about "strategic
consistency" between the organization and its environment or "strategic
consistency." According to Arieu (2007), "there is strategic consistency
when the actions of an organization are consistent with the expectations of
management, and these in turn are with the market and the context."
Strategic management includes the management team and possibly the Board of
Directors and other stakeholders.
"Strategic management is an ongoing process that evaluates and controls the
business and the industries in which the company is involved; assesses its
competitors and sets goals and strategies to meet all existing and potential
competitors; and then reassesses each strategy annually or quarterly [i.e.
regularly] to determine how it has been implemented and whether it has
succeeded or needs replacement by a new strategy to meet changed
circumstances, new technology, new competitors, a new economic environment.,
or a new social, financial, or political environment." Strategic Management
can also be defined as "the identification of the purpose of the
organisation and the plans and actions to achieve the purpose. It is that
set of managerial decisions and actions that determine the long term
performance of a business enterprise. It involves formulating and
implementing strategies that will help in aligning the organization and its
environment to achieve organisational goals."
Concepts/approaches of strategic management
Strategic management can depend upon the size of an organization, and the
proclivity to change of its business environment. These points are
highlighted below:
·
A global/transnational organization may employ a more structured strategic
management model, due to its size, scope of operations, and need to
encompass stakeholder views and requirements.
·
An SME (Small and Medium Enterprise) may employ an entrepreneurial approach.
This is due to its comparatively smaller size and scope of operations, as
well as possessing fewer resources. An SME's CEO (or general top management)
may simply outline a mission, and pursue all activities under that mission.
·
Whittington (2001) highlighted four approaches to strategic management.
These are Classical, Processual, Evolutionary and Systemic approaches.
·
Mintzberg stated there are prescriptive (what should be) and descriptive
(what is) approaches. Prescriptive schools are "one size fits all"
approaches that designate "best practice" while descriptive schools describe
how strategy is implemented in specific contexts.
No single strategic managerial method dominates, and remains a subjective
and context-dependent process. |