02.08.2020

strategic management importance

The liberalisation of policy towards foreign capital and technology, imports and accessing foreign capital markets provides companies opportunities for enhancing their strengths to exploit the opportunities. Strategic management is a continuous process of decision-making that is vital to the very survival, growth and flourishment of an organisation that contribute to wealth maximisation. This post actually made my day. Framework 7. These may ramify into a number of grand and functional strategies depending on the nature of an organisation in terms of its size, age, and area of operations, type of environment and the management approach towards strategic management. At this stage, the firm finds out its relative market position, corporate image, its strength and weakness and also environmental threats and opportunities. In the initial days, typically in early 1920s till the 1930s, managers used to do day-to-day planning methods. Functions 12. Strategic issues involve the allocation of large amounts of company resources. SBU-level strategy, sometimes called Business Strategy or Competitive Strategy, is concerned with decisions pertaining to the product mix, market segments and manoeuvring competitive advantages for the SBU. In Most of the cases because of Management negligence employees will suffer.Keka is an employee experience platform. Organizations are enabled to identify the available opportunities and identify ways and means to reach them. In short, strategic management by itself does not ensure unconditional success. Obviously, if the SWOT analysis is not right, the strategy based on it may go awry. The concept of strategic management revolves around company’s clear understanding of its vision and mission. Schendel and Cool (1988) – Strategic management is essentially work associated with the term entrepreneur and his function of starting (and given the infinite life of corporations) renewing organisations.

Some are very significant while vast majority are of lesser importance. Strategic Issues Warrant Top Management DecisionsStrategic decisions have far-reaching impact on several areas of firms operations. Thus, strategic management is the process of planning, directing, organising, and controlling a company’s strategy-related decisions and actions to achieve competitive advantage and the long-run performance goals of a company. The principle of commitment stands the implication that long-term planning is not really planning for future decisions but planning for future impact of to-days decisions.

Whether it is dynamic business world or the ground reality living of us-what is important is—what you are? To understand the various concepts involved like strategy, policies, plans and programmes. which helps to determine the future sustainability and the profitability of the organization, simultaneous with the integration of managerial capabilities, responsibilities, motivation and … The college’s leadership assesses whether its goals have been achieved on a periodic basis.

We use cookies to ensure you get the best experience on our site. In that case, strategic management means ensuring the school has funds to create high-tech classrooms and hire the most qualified instructors. A Strategic Plan is, in essence, a company’s game plan. Further, a good strategic management also envisages modification of the strategy when changes in the environment call for it. Strategic management must not become a self-perpetuating bureaucratic mechanism. Strategic management is the management of an organization’s resources to achieve its goals and objectives. The element of commitment of the strategic decision relates to Who? 5. To determine the mission, objectives and strategies of a firm and to visualize how the implementation of strategies can take place. It helps the organization to be more proactive instead of reactive in shaping its future. Importance.10. Companies nowadays are increasingly subject to transparency protocols and public accountability. 5. 3. In this dealing, the emphasis is put on identifying tendencies of various phenomena in the organization and relationships among these tendencies, (ii) Decision criteria are based on overall betterment of the organization as a whole, not the criteria used by functional specialists, (iii) Attempt is made to achieve organizational equilibrium and generation of synergy. Strategic management is the art and science of formulating, implementing and evaluating cross function decision that enable the business to achieve its objectives. 6. Thus, in order to ensure effective top management function, it is necessary that a distinction should be made between strategic management and operational management which emphasises day-to-day operations in the organization, so that top management can focus more attention on the strategic aspect rather than emphasising on operational management. Hence, the first test of totality of a given strategy is whether a pertinent result element has been clearly specified. Excepting economic models, techniques of technological forecasting which have been found useful are judgmental models scenario development, brain storming and Delphi method. not what were? For example, leading mobile phone maker Nokia has opened up a large facility near Chennai to serve the growing domestic market. There is need for creation of a separate operation whereby the personnel responsible is expected to devote full time to the new strategy area, and c. Where there is need for creating internal competition as the basis for sharper evaluation of a strategy. i.

Her experience extends to both corporate and freelance; she's a former Senior Editor at the B2B publication Accounting Today, writing about public accounting firms with a specialization in diversity, technology, best practices, and business development.

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