Definition of Strategic Management
Management of the resources of an organization to achieve its goals and objectives. Strategic management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and making sure that strategies are rolled out throughout the organization.
Strategic management involves recognizing the opportunities and threats facing an organization, whether coming from within the organization or from competitors and recognizing how the organization stacks up against its competitors. It requires the ability to see both externally and internally.
Strategic management is divided into many different schools of thought. A prescriptive approach to strategic management outlines how the strategies should be developed, while a descriptive approach focuses on the strategies made in practice. These schools differ on whether strategies are developed through an analytical process in which all threats and opportunities are to be accounted for or the kind of general guiding principles that have to be applied.
Strategic management is a top management function tasked with setting priorities, focusing and channelizing resources, streamlining operations, ensuring that employees are aligned to the achievement of the organization’s goals, and positioning the organization in the changing environment. It traces the intention of the organization for the next five years.
Business culture, skills and competencies of employees, and organizational structure are important factors that influence how an organization can achieve its stated objectives. Inflexible companies can 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 met efficiently.
While the higher management of an organization is ultimately responsible for its strategy, many times the lower-level managers and employees themselves are intensified by the actions and ideas of the strategies. An organization may have many employees devoted to strategy rather than relying on the CEO. Organization leaders are learning from previous strategies and are largely focused on environmental investigations. This knowledge is then used to guide the behaviour of employees to develop future strategies and to ensure that the entire organization is moving forward.
Meaning of Strategic Management
By the term strategic management, we mean the process that helps the organization assess its internal and external business environment, set the strategic vision, set objectives, formulate strategies and implement the strategies that the organization aligned to achieve its goals.
Strategic management aims at achieving a sustained competitive advantage, superseeding the competitors and achieving an effective position in the entire market. Further, it evaluates, guides and adjusts the enterprise as per changes in the business environment.
The strategy describes how management plans to achieve its objectives.
Strategy is like a blueprint of the decisions that an organization takes to achieve its objectives and goals, and plans to achieve these goals, and defines the business that the firm is likely to pursue, The type of economic and human resource organization it wants to be and plans to contribute to its shareholders, customers, and society at large.
In short, strategy means “the art of general”. The term first gained currency in the late 18th century and had to do with stratagem, by which a general sought to deceive an enemy.
The general for a campaign with plans, and the way the general went and dealt with his army in battle. According to Clausewitz, strategy means “the art of employing fighting as a means of obtaining the object of war”.
The word strategy has gone far beyond its original military meaning. The strategy is now used in all sectors where the horizon is long-term, there is competition for the use of resources and the objective is to realize its goals.
With the development of strategy as a theoretical discipline, scholars have sought to identify the principles of strategy that have traditionally guided military strategists in warfare.
A strategy is a set of major decisions made to accomplish objectives. It refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provide general guidance for specific actions in the pursuit of particular ends.
What is strategy?
The word “strategy” is derived from the Greek word “stratogos”; which means generalship (stratus meaning army) and “first” (meaning leading/moving). Actually, the term was used in the army, here strategy refers to the management of the troops. Once the enemies are engaged, the focus is on planning and strategy.
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From here gradually the concept of strategy and the term strategy paved their way into the world of business and management. In business parlance, it has no definite meaning. It is often used to describe several things.
Strategy can be viewed from different angles it is a perspective, competition, innovation, positioning, planning, and pattern. Strategy is described as a link between the guidelines or goals of higher management on the one hand and the plan or actions on the other.
It should be kept in mind that strategic decisions are not taken in a vacuum and that any action taken by the firm will result in the reaction of the affected competitors, customers, employees, or suppliers.
Understanding strategy is one of the most important concepts to emerge in the subject of management studies in recent times. It has emerged as a vital input for organizational success and as a tool to deal with the uncertainties faced by the organization.
The strategy has been used as a tool to reduce ambiguity and provide a solid foundation or principle for conducting business. Strategy is a convenient way to organize the many variables that operate within an organizational context and to understand their interrelationship. It has helped thinkers and practitioners to formulate their ideas systematically and apply them in practice.
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