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All About Strategic Management

Posted By H2t  
25/08/2020
11:00 AM

Planning to Management Execution

Strategic management is based around an organization's clear understanding of its mission; its vision for where it wants to be in the future; and the values that will guide its actions. The process requires a commitment to strategic planning, a subset of business management that involves an organization's ability to set both short- and long-term goals. Strategic planning also includes the planning of strategic decisions, activities and resource allocation needed to achieve those goals.

Igor Ansoff invented and popularized the term as a system of corporate values, planning capabilities, or organizational responsibilities that couple strategic thinking with operational decision making at all levels and across all functional lines of authority in a corporation.

In other words, strategic planning happens around strategic thinking or strategy making activity. Strategic Management is often described as involving two major processes: formulation and implementation of the strategy.

A business without long term goals and objectives will struggle to set company direction, focus efforts and gain competitive advantage. Yet by applying strategic management, organisations can not only survive but thrive. Here's how strategic management can drive better performance.

A common way to encourage strategic business management is to incorporate a lot of planning into board meetings have trustees with valued and varied experience and to carefully consider the impacts of decisions on each business function within the organisation. Annual plans for businesses are often put together, but within the 21st century, it is important to be flexible and adapt to changing environments and demands.

Strategic management requires broad vision and convincing leadership skills, after all, it's about making key decisions, overcoming obstacles and leveraging opportunities to ensure the organisation is making progress. Company executives not only require sharp analytical skills, but they also need the ability to engage with stakeholders and motivate employees to embrace their outlined strategies. By developing skills in strategic management executives can create value for their company.

Strategic and Operational Planning

This is an essential management tool for any company. The main task in the strategic planning process is predicting future trends that will help the business in building In order to make this happen, strategic planning tools need to be used instead of simple planning processes. Real Strategies, Viable Strategies and Strategic Programming all require an integrated planning and reporting approach, aligning the Strategic Plan to a Growth Plan, Long Term Plan, Business Plan, Year Plan, Action Plan as examples, will assist in a better understanding of the challenges ahead rather than a traditional approach in a changing environment.

However, mere planning has lost its glamour; the planners have all turned into strategists. Formal strategic planning does indeed to evolve along similar lines in different companies, albeit at varying rates of progress. This progression can be segmented into four sequential phases, each marked by clear advances over its predecessor in terms of explicit formulation of issues and alternatives, quality of preparatory staff work, the readiness of top management to participate in and guide the strategic decision process and effectiveness of implementation.

Corporate Value System

The value system shared by the company’s top and middle managers provides a visible linkage between planning and action. Although the leadership styles and organizational climates of companies that can be called strategically managed vary considerably, and in even one company a great deal of diversity can be found, four common themes emerge from interviews with personnel at all levels in strategically managed companies:

1. The value of teamwork, which leads to task-oriented organizational flexibility.

2. Entrepreneurial drive, or the commitment to making things happen.

3. Open communication, rather than the preservation of confidentiality.

4. A shared belief that the enterprise can largely create its own future, rather than be buffeted into a predetermined corner by the winds of environmental change.

Example of Strategic Management

For example, a for-profit technical college wishes to increase new student enrolment and enrolled in student graduation rates 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 that case, strategic management means ensuring 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.

Statistics

It is often claimed that 50 to 90 percent of strategic initiatives fail. Although these claims have had a significant impact on management theory and practice, they are controversial. Cândido, C.J.F. and S.P. Santos (2015) Strategy implementation

Summary

As the economic system becomes more complex and the integration of single business units into multinational, diverse organizations continue, ways must be found to restore the entrepreneurial vigour of a simpler, more individually oriented company structure. Strategic management, linking the rigour of formal planning to vigorous operational execution may prove to be the answer.

Horizon2Technologies is a specialist in Enterprise Business Solutions specialising in Corporate Performance Management (CPM).

Resources

What is Strategy?

Top FREE strategic management process Courses in 2020.

FREE offer for a 90-minute online Strategic Planning Consultation. ( COVID-19)

If in Adelaide, a 1 on 1 coffee meeting with our consultants can be organised.

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