Meaning and Definition of Strategic Management
Strategic Management involves the analysis of internal capabilities and external environment of a firm in order to efficiently and effectively uses resources to meet organizational objectives. Strategic management is the process of systematically analyzing various opportunities and threats vis-a-vis organizational strengths and weaknesses, formulating, and arriving at strategic choice through critical evaluation of alternatives and implementing them to meet the set objectives of the organization.
According to Alfred Chandler___” Strategic Management is a stream of decisions and actions which lead to the development of an effective strategy or strategies to help achieve corporate objectives”.
According to Dess, Lumpkin& Taylor___” Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages”.
Characteristics of Strategic Management
- Long-term Direction: Strategic management is concerned with the long-term direction of an organization.
- Recognizes Changes: It recognizes that environment will change and that organizations should continually monitor internal and external events and trends, so that timely action can be taken as needed.
- Oriented Towards the Future: It is oriented towards the future, It is a long-range orientation, one that tries to anticipate events rather than simply react as they occur.
- Major Impact on the Organization: It often requires investment of substantial financial and other resources.
- Competitive Advantage: It aims at achieving some advantage for the organization over competitors.
- Affected Operational Decisions
- Integration Intuition and Analysis
- Stretching Resources and Competencies.
- External Emphasis: It takes into account several components of the external environment, Including technological, Political, economic and social dimension and their impact on business.
Elements of Strategic Management
- Strategic Analysis: This is concerned with understanding the strategic situation of the organization. This includes the examination of matters like changes in the organizational environment and its effects on the organization, assessment of its resources and strengths in the context of these changes, effect the changes on people and their present and future aspirations.
- Strategic Choice: It provide a basis for strategic choice. This is concerned with the formulation of possible courses of action, Their evaluation and the choice between them. This means that the strategic choice has three parts to it- generation of strategic options, evaluation of strategy and selection of strategy.
- Strategic Implementation: It concerned with translation of general directions of strategy into action. Implementation can be thought of as having several parts. This involves resource planning in which logistics of implementation are examined. It also take into account the organization structure needed to carry through the strategy and of course the systems and people who implement the strategy.