Strategic Management: What are the Various Elements, Approaches and Stages?
Table of Contents
- jaro education
- 29, June 2024
- 7:00 pm
Strategic management is the foundation for propelling your organisation to new heights of success. The related notion entails making critical judgments and acting appropriately. These administrative processes move an organisation toward its ultimate goals, which are to maximise product conversion and provide expected returns on investment.
Strategic management can help an organisation gain a competitive edge over others, improve its market share and plan for future objectives. Let us dive deep into the basics of strategic management and how it can boost career in the next sections.
What is Strategic Management?
Strategic management or business management is the art, science, and craft of developing, putting into practice, and assessing cross-functional choices that will help a company accomplish its long-term goals.
- It involves defining the goals, mission and vision of the organisation, as well as creating plans and policies to attain these goals—often in the form of projects and programs—and then allocating funding to put these plans into action.
- The main aim of strategic management is to integrate and coordinate the operations of a company’s many functional departments to accomplish long-term organisational goals. When assessing a company’s entire performance and its progress toward goals, a balanced scorecard is frequently employed.
Agenda and working
At the top of the managerial hierarchy is strategic management. While higher management is ultimately accountable for an organisation’s strategy, lower-level managers and employees frequently fuel it via their actions and ideas. An organisation may have numerous workers dedicated to strategy rather than depending exclusively on the chief executive officer (CEO) for direction.
Because of this fact, organisational leaders prioritise learning from previous methods and assessing the whole environment. The aggregate knowledge is then utilised to design future initiatives and steer employee behaviour, ensuring that the entire firm moves ahead. For these reasons, effective strategic management necessitates both inside and outward focus.
Generally, strategies are conceived, designed, or directed by the CEO, sanctioned or approved by the board of directors, and then put into action under the guidance of senior executives or the organisation’s top management.
Strategic management gives the business its overall direction. Within the realm of business administration, discussing “strategic consistency” or “strategic alignment” between the corporation and its surroundings is helpful.
Example of Strategic Management
A for-profit technical university wants to double new student enrolment and graduation rates over the subsequent three years. The goal is to establish the institution as the best value for a student’s money among the region’s five for-profit technical colleges, with the aim of boosting income.
In this scenario, strategic management would mean ensuring the institution has enough funds to hire highly qualified educators and build high-tech classrooms for the students. It would also require investment in sales and marketing strategies and recruitment processes, and implementation of student retention strategies. The institution’s management will then evaluate whether its aims have been met on a regular basis.
Key Elements of Strategic Management
Strategic management is not an approach that fits everyone. However, multiple key elements have been identified as vital. These include:
- goal planning and setting
- industry and organisational assessments
- strategy development and implementation
- strategy measurement, monitoring and control
Approaches to Strategic Management
There are basically two main approaches, which are