Strategic Management
Strategic Management Show Strategy is the term used for integration of the organizational activities and utilization and allocation of the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vacuum and that any act taken by an organization is likely to be met by a reaction from those affected, competitors, customers, employees, suppliers or other stakeholders. Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as ‘A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process’. Strategic planning Strategic plan is a document which is used to communicate with the organization the goals of the organization, the actions needed to achieve these goals and all of the other critical elements developed during the planning exercise. Strategic planning is a management activity that is used to set priorities, to focus on energy and resources, to strengthen operations, to ensure that employees and other stakeholders are working toward common goals, to establish agreement around intended outcomes/results, and to assess and adjust the organization’s direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what the organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where the organization is going and the actions needed to make progress, but also how it will know if it is successful. The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association has developed the following criteria for strategic planning and management.
Strategic management Strategic management process defines the strategy of the organization. It is defined as the process by which management makes a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process. Strategic management involves the formulation and implementation of the major goals and initiatives required to be taken up by the top management of the organization on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization operates. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. Strategic management provides overall direction to the organization and involves specifying the organization’s objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Several models and frameworks have been developed to assist in strategic decision making in the context of complex environments and competitive dynamics. Since the strategic management is not static in nature; the models often include a feedback loop to monitor execution and inform the next round of planning. Strategic management process consists mainly of four steps (Fig. 1) namely (i) environmental scanning, (ii) strategy formulation, (iii) strategy implementation, and (iv) strategy evaluation. Fig 1 Steps in strategic management process Environmental scanning Organizational environment consists of both external and internal factors. It needs to be scanned so as to determine the factors that influence the success of the organization. Environmental scanning refers to possession and utilization of information which relates to the organization’s internal and external environment. It refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. Analysis of both internal and external environments is an important part of the environment scanning. Internal organizational environment includes employee interaction with other employees and stakeholders, resource and process management, cost management, brand awareness, organizational structure and human resource potential etc. Analysis of the external environment includes environment of the organization’s industry, national and international environment, socio economic environment, political environment, and regulatory environment etc. While the analysis of internal environment will bring forward strength and weakness of the organization, the analysis of external environment will bring forth the opportunity and threat to the organization. Strategy formulation It is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. It basically involves following six steps not necessarily in a rigid chronological order.
Strategy implementation It implies making the strategy work as intended or putting the organization’s chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing decision making process, and managing human resources. Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop, utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage and a better performance. Organizational structure allocates special value developing tasks and roles to the employees and states how these tasks and roles can be correlated so as maximize efficiency, quality, and customer satisfaction-the pillars of competitive advantage. Following are the important steps during strategy implementation.
Strategy evaluation It is the final step of strategy management process. The key strategy evaluation activities include appraising of internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as its implementation meets the organizational objectives. The process of strategy evaluation process consists of the following four steps.
What is called the process of utilizing resources to achieve the objectives of an organization?Resource management is the practice of planning, scheduling, and allocating people, money, and technology to a project or program. In essence, it is the process of allocating resources to achieve the greatest organizational value.
What is the process of strategic management?Strategic management process is a continuous culture of appraisal that a business adopts to outdo the competitors. Simple as it may sound, this is a complex process that also covers formulating the organization's overall vision for present and future objectives.
What is strategy process?A strategic process is concerned with making decisions. Decisions are made only after data from various sources is received. This data is received from both within the organization as well as from the environment outside the organization.
What are the 4 organizational resources?Organizational Resources are all assets that are available to a firm for use during the production process. The four basic types of organizational resources are human, monetary, raw materials and Capital. Organizational resources are combined, used, and transformed into finished products during the production process.
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