Instructor: Mike Ammons
North Carolina Wesleyan College
What is strategic management?
Strategic management has many workable definitions. Some of them are as follows. The process of managing the pursuit of organizational mission while managing the relationship of the organization environment (Higgins). It could also be defined as the set of decisions and actions resulting in the formulation and implementation of strategies designed to achieve the objectives of the organization (Barnat). My definition of Strategic Management is an organizations policy, goals, and planning that are put into place in order to achieve success within the company and to maintain the competition between their competitors. Strategic management is most of the time use along with the term strategic planning which is the process in which an organization uses in order to implement the goals that are included in an organization’s mission and or vision statements.
Stages of Strategic Management
The strategic management process consists of three stages: strategy formulation, strategy implementation, and strategy evaluation. Strategic formulation includes development of a vision and mission statement and also finding the organizations rivals, and helping to maintain their competitive advantage. Strategic implementation requires and organization to create yearly objectives, come up with policies, create motivation for its employees and create strategies that can be executed. The last of the three stages is strategy evaluation. Managers need to know what strategies are not working well, so they should be reviewing the factors that are the bases for the current strategies, they should measure performance and take corrective action. This is a very important step within an organizations strategic process, because success today does not guarantee that there will be success tomorrow.
Strategic management has several key benefits to help with the process. Competitive advantage is when a firm or company has profits that exceed the maximum amount of profit over its rivals, and it exists when the organization can deliver the same benefits as their rivals at a lower cost to the company. Strategist have a big role in the strategic management process, they are responsible for the company success or failure. A strategist can have many names such as chief office, executive director, or president. They help to organize and gather data for the mission and vision statement for the organization, they also keep the organization informed on what the competitors are doing. Another key benefit is Vision and mission statements. A mission statement is something that has been written down by the strategists in a company that distinguishes one organization from another, it should be clear and precise, and chart the future direction of the organization. It should also be a constant reminder to all employees of why the organization exists and the goals they are trying to accomplish.
Benefits and Pitt-falls
There are several benefits that come with having a good strategic plan within an organization. It allows an organization to be more proactive than reactive in shaping its own future: it also allows them to initiate and influence activities and it can give them control over the company’s destiny. Good strategic planning can also enhance the organizations communication skills and get more input from the employees. Good strategic management can improved the employees understanding of the organizations goals and also gives them a greater commitment. It is very important that the organizations strategic plan it carried out correctly because this has a big impact on how the organizations goals will be met, this could be a big pit fall. Even the best of intentions, the strategic planning process can get off track. Here are just a few pit falls that an organization needs to