The Value of Strategic Management
July 6th, 2014
THE VALUE OF STRATEGIC MANAGEMENT 2
Strategic Management is intended to achieve a company’s objectives. Strategic Management involves decisions and actions that result in the formulation and implementation of plans that involves long-term, future- oriented, complex decisions making and requires considerable resources, and top-management participation (Robinson, 2014). Strategy is important to a business without it; managing activities internally and externally would be a huge undertaking and challenge. For a business to earn profits, the business needs to take into account the size and number of competing businesses. This means perfecting business policies that come with long-term planning, budgeting and forecasting (Robinson, 2014). To a large extent, the ambition of business strategy is to reach a sustainable competitive advantage (http://www.strategy-train.eu, 2014). To be competitive which goes hand and hand with strategic management; a business must examine, assess, identify, and implement long and short term objectives to secure and achieve success through strategic processes for future decision making.
With this important decision making there are three levels of strategy to consider. The first level comes straight from the top which is the corporate level. Usually a business sets a big goal that corporate or otherwise known as the board of directors and or chief executives along with administrative officers strategizes a financial plan of action to develop long-term proposals for the company. These objectives span the activities in functional areas of the business (Robinson, 2014). Once the decision are made from the corporate level it than trickles down to the middle of the decision making process which is the business level. This level is crucial to the separate divisions of the business. At this level these critical decisions are translated into
THE VALUE OF STRATEGIC MANAGEMENT 3 statements by business level managers, therefore it is taken from an idea and put into a statement or soon to be action. These managers must create strategy development to put into movement for the functioning level. Staying within the competitive advantage these managers must attempt to secure the market and its segment within the arena (Robinson, 2014). The last level serves as the functional level. This level is mostly managers that develop annual objectives in the production, operation area keeping in mind the ultimate responsibility to execute the company’s strategic plans. Without this level the corporate and business level strategies will not get put into action, therefore it is very detrimental to the company to this functionally level to