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What Is 'Strategic Management'

Strategic management involves setting organizational goals and objectives, analyzing internal strengths and weaknesses as well as external opportunities and threats, developing strategies to achieve goals, and ensuring implementation of strategies across the organization. There are prescriptive and descriptive approaches to strategic management that differ in how strategies are developed and implemented. Effective strategic management requires both an inward examination of business culture, skills, and structure as well as an outward perspective of the external environment to develop future strategies and guide employee behavior toward achieving organizational objectives. Putting strategic management plans into practice is critical and involves realigning resources, communication, and tracking progress toward goals.

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78 views2 pages

What Is 'Strategic Management'

Strategic management involves setting organizational goals and objectives, analyzing internal strengths and weaknesses as well as external opportunities and threats, developing strategies to achieve goals, and ensuring implementation of strategies across the organization. There are prescriptive and descriptive approaches to strategic management that differ in how strategies are developed and implemented. Effective strategic management requires both an inward examination of business culture, skills, and structure as well as an outward perspective of the external environment to develop future strategies and guide employee behavior toward achieving organizational objectives. Putting strategic management plans into practice is critical and involves realigning resources, communication, and tracking progress toward goals.

Uploaded by

DrăganM.Beatrice
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Strategic Management

What is 'Strategic Management'


Strategic management is the management of an organization’s resources to
achieve its goals and objectives. Strategic management involves setting
objectives, analyzing the competitive environment, analyzing the internal
organization, evaluating strategies and ensuring that management rolls out the
strategies across the organization. At its heart, strategic management involves
identifying how the organization stacks up compared to its competitors and
recognizing opportunities and threats facing an organization, whether they
come from within the organization or from competitors.

BREAKING DOWN 'Strategic Management'


Strategic management is divided into several schools of thought. A
prescriptive approach to strategic management outlines how strategies should
be developed, while a descriptive approach focuses on how strategies should
be put into practice. These schools differ over whether strategies are
developed through an analytic process in which all threats and opportunities
are accounted for, or are more like general guiding principles to be applied.

Business culture, the skills and competencies of employees, and


organizational structure are important factors that influence how an
organization can achieve its stated objectives. Inflexible companies may find it
difficult to succeed in a changing business environment. Creating a barrier
between the development of strategies and their implementation can make it
difficult for managers to determine whether objectives were efficiently met.

While an organization’s upper management is ultimately responsible for its


strategy, the strategies themselves are often sparked by actions and ideas
from lower-level managers and employees. An organization may have several
employees devoted to strategy rather than relying on the chief executive
officer (CEO) for guidance. Because of this reality, organization leaders focus
on learning from past strategies and examining the environment at large. The
collective knowledge is then used to develop future strategies and to guide the
behavior of employees to ensure that the entire organization is moving
forward. For these reasons, effective strategic management requires both an
inward and outward perspective.

Strategic Management in Practice


Making companies able to compete is the purpose of strategic management.
To that end, putting strategic management plans into practice is the most
important aspect of the planning itself. Plans in practice involve identifying
benchmarks, realigning resources – financial and human – and putting
leadership resources in place to oversee the creation, sale, and deployment of
products and services. Strategic management extends to internal and external
communication practices as well as tracking to ensure that the company meets
goals as defined in its strategic management plan.

For example, a for-profit technical college wishes to increase enrollment of


new students and graduation of enrolled students over the next three years.
The purpose is to make the college known as the best buy for a student's
money among five for-profit technical colleges in the region, with a goal of
increasing revenue. In this case, strategic management means ensuring that
the school has funds to create high-tech classrooms and hire the most
qualified instructors. The college also invests in marketing and recruitment and
implements student retention strategies. The college’s leadership assesses
whether its goals have been achieved on a periodic basis.

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