Strategic Management - A critical consideration of the contribution of strategic management and strategic thinking processes to organizational performance.

p 5 Strategic Management - A critical consideration of the contribution of strategic management and strategic thinking processes to organizational performance

Introduction

Strategic management is a practice in which various decisions and plans are made , expressed and evaluated for an organization . Strategic management does not have to be just a part of the top level management In fact , organizations should focus on strategic management such that all levels of the management and the entire hierarchy of the company should be involved - both in planning and implementation phases

Theory of Strategic

Management

The basic theory of strategic management involves the action of creating and implementing plans and decisions for the benefit of the organization and to help it achieve its objectives . It helps to differentiate and analyze objectives that have to be achieved , develop techniques and tactics to achieve the objectives set out and to set financial costs and resources required to implement such techniques . Strategic management thus deals with all the functional and integral areas of an organization to achieve its objectives . The objectives however are a second step to strategy formulation and implementation . A company must , as a first step determine and implement a vision or a dream that it needs to achieve in the future . Only then , the company should go about to establish its objectives and plan of action in to achieve that vision established in the first step

Strategy Formulation and Implementation

When a strategy is formulated varying factors are taken into account [Okes Russell (2001 pp .59-62 , The Certified Quality Manager Handbook )] . The organization in question is evaluated internally competitive analysis is done , and the environmental factors are taken into account . This helps to find the weaknesses in an organization where it is functioning improperly and in some cases previous strategies and their flaws are taken into account

This helps to exterminate all previous factors that were leading to a loss , were inefficient , or were using too many resources . Realizing what factors are killing off sales or decline of customers /consumers can be an important part in strategy planning and curtailing these factors can help to capture customers /consumers-1

Competitive analysis helps in determining what the strength and position of a competitor is in the market . A differentiation strategy can then be applied to distinguish a product from a competitor for a better competitive advantage or a low cost strategy to produce a less costly product than the competitor [Jones , George Hill (1998 ) pp 217-219 Contemporary Management .] . This helps the organization to adapt to the current market and the environment present to it . The first and foremost requirement for a successful organization is to grasp the current situation and to dig its roots in the product 's competitive market and strategic management helps to do just that by establishing realistic goals keeping in mind the organizations capacity and financial status

To create a strategy there are different methods . Each method provides certain advantages and disadvantages to the company in terms of building and planning the strategy and then implementing it . Either a strategy can be imposed by a group of directors or ideas about better functioning , cost control or profit can be taken from individual managers and staff within the organization and the best ones then selected-2

This helps to understand what a company 's staff wants and it also induces creativity within an individual . This also involves creative and innovative thinking allowing the employees and managers to build their mind 's framework in terms of intuition . Once a plan is established the control is taken away from the board of directors , which can then help them to worry about the organization 's future rather than to take into account a day to day analysis of business . Formulation of a plan also helps the staff to understand why such a direction is being taken and leads to better understanding of the strategy . This leads to everyone working as a team and bringing about what is best for the organization-3

A sense of direction also prevails in the organizational atmosphere and a goal is realized which everybody tend to work hard to achieve with their fullest capabilities bringing about unity in staff and better products , services or ideas that can help the organization prevail-4 . If everyone has a clearer focus of what to achieve , it produces more efficiency and effectiveness . Additionally , team work can build a synergy allowing the organization to achieve goals in a far better manner , where individualism would be less synergetic and less useful than collectivism and team work

Setting a goal for everyone is another factor evolving from strategic planning . If a thorough study has been done of the organization and a strategy is being created , it is particular that every constituent of the organization has been taken into account and their part for achieving the goals has been defined . This helps more in developing efficiency and creating a purpose for everyone in the organization Mainly this can be done by the managerial leadership at work

The central role of leadership is described as the development of Spirit at an individual , team and organizational level '-5

There are different ways to produce such Spirit . Operational Strategy helps to manage schedules and goals to be reached on a daily basis , which leads to greater employer effectiveness , which leaves the higher managerial staff to get involved in other goals for the whole business unit defined in their business strategy

If it is a corporation then the highest managerial staff can work for their corporate strategy goals . If everyone has an objective they will tend to work towards it without getting in each other 's way when a whole strategy has been implemented . The organization really does become organized to put it in simple terms

When developing strategies unexplored markets can also be surveyed and a whole strategy can be made to venture into them [Jones , George Hill (1998 )

.211 , Contemporary Management .] . Of course if the strategy is successful a boost in sales and profits will result . Yet for such a boost a pre-implementation survey would have to be done identifying key factors affecting such a market and then a strategy can be formulated keeping those key factors in mind

Differing strategies can be brought into account to deal with different factors . One most important factor about strategic management planning is that previous strategies and their success or failing factors are taken into account and a new strategy can be formulated that deals with a problem the corporation is facing [Jones , George Hill (1998 ) pp 207-212 . Contemporary Management .] . That is strategic management is almost flexible . It allows you to vary your strategic planning according to what a corporation wants , what the employees ' want , how much profit has to be achieved and so on and so forth . Flexibility helps in dealing with specific factors and profit making can be one of them .-6

Not all strategies can be successful in enhancing an organization or its profits . Strategies may also be less useful when made especially when effective planning and advantageous use is not kept in mind when the strategy formulation stage is under process . The implementation of the strategy would then be less useful , creating wastage of time when it would have been advantageous to perform a cost benefit analysis in the strategy formulation stage

Conclusion

However , even then , strategic planning does help in many ways . A successful strategy depends upon the management , thoroughness of study and correct planning and implementation procedures . More than one strategy can also be implemented if an organization is able to and leads to better performance .-7 An organization without a sense of direction can be considered not to be organized at all . The organization is only organized when a step-by-step action plan is in place and it knows the strategy and procedures it needs to undertake in to be successful

Citations

1 . Campbell G Cunninghum T . 1983 , Customer Analysis for Strategy Development in Industrial Markets , Strategic Management Journal , Vol 4 no 4 , pp . 369-380

2 . A . Robert 1983 , A Model of the Interaction of Strategic Behavior Corporate Context , and the Concept of Strategy ' The Academy of Management Review , Vol . 8 , No . 1 pp . 61-70

3 . Miller D (1987 ) Strategy Making and Structure : Analysis and Implications for Performance , The Academy of Management Journal , Vol 30 , No . 1 ,pp . 7-32

4 . Hart S . 1992 , An Integrative Framework for Strategy-Making Processes 'The Academy of Management Review , Vol . 17 , No . 2 , pp . 327-351

5 . Cacioppe R . 2000 , Creating spirit at work : re-visioning organization development and leadership - Part II , Leadership Organization Development Journal , Vol . 21 no 2 , pp . 110-119

6 . Sanchez R Mahoney T 1996 , Modularity , Flexibility , and Knowledge Management in Product and Organization Design , Strategic Management Journal , Vol . 17 pp . 63-76

7 . Hart S Banbury C (1994 , How Strategy-Making Processes Can Make a Difference ,Strategic Management Journal , Vol . 15 , No . 4 pp 251-269

Bibliography

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? Campbell G Cunninghum T . 1983 , Customer Analysis for Strategy Development in Industrial Markets , Strategic Management Journal

? Cacioppe R . 2000 , Creating spirit at work : re-visioning organization development and leadership - Part II , Leadership Organization Development Journal , Vol . 21 no 2

? Sanchez R Mahoney T 1996 , Modularity , Flexibility , and Knowledge Management in Product and Organization Design , Strategic Management Journal

? A . Robert 1983 , A Model of the Interaction of Strategic Behavior Corporate Context , and the Concept of Strategy ' The Academy of Management Review

? Miller D (1987 ) Strategy Making and Structure : Analysis and Implications for Performance , The Academy of Management Journal . Vol 30 , No . 1

? Hart S . 1992 , An Integrative Framework for Strategy-Making Processes 'The Academy of Management Review , Vol . 17 , No . 2

? Hart S Banbury C (1994 , How Strategy-Making Processes Can Make a Difference ,Strategic Management Journal , Vol . 15 , No . 4...