Strategic management entails the process by which managers and or management identifies strategies needed to carry organizational objectives in the internal and external environment of an organization, so as to achieve better performance and a competitive advantage for their organization. Managers must have thorough knowledge of the general and competitive environment so that they can make the right decisions for their firm. They must perform a swot analysis test, which measures the strength, weaknesses, opportunities and threats of an organization.
Managers should always be concerned with making sure they minimize the organizations weaknesses, and maximize its organizations strength as well as, make use of opportunities as they become known from the business environment, and should never ignore the potential of threats to their organization. Strategic management is a process that is ongoing that continually evaluates and controls the industries and businesses in which a firm is connected to, by evaluating its competition and setting goals and strategies to meet potential and existing competitors as well as reevaluating strategies on a regular basis and correcting if necessary.
The steps included in the strategic management process includes, 1) environmental scanning, which is the process of collecting as well as examining and providing information for strategic purposes and helps to analyze the internal and external factors influencing an organization. This process must be continually evaluated and making improvements as needed. 2) strategy formulation, is the process of deciding the best course of action for achieving organizational goals and objectives. 3) strategy implementation, which includes designing the structure of an organization, managing resources and making the strategy work that’s implemented.
And 4) strategy evaluation, which is the last step of the management process, which involves appraising internal and external factors that pertains to its present strategies and its measuring of performance and making corrective actions when needed. In addition to the strategic management process, as stated above, managers must conduct a swot analysis, which describes the internal strengths and weaknesses of an organization and its firm’s environmental opportunities and threats that they may be faced with.
According to (Pearce & Robinson, 2015, p. 155), the components of the swot analysis is defined as, 1. Strength, which is the capability or a resource advantage relative to competitors and needs of the market they expect to serve or is already servicing. 2. Weaknesses, which describes the limitations in one or more resources relative to competitors that impedes a firm performance. 3. Opportunities, which is a favorable occurrence in a firm’s environment. And finally, 4. Threats, which a major unfavorable situation in a firm’s environment. The use of the swot analysis in strategic management is a logical framework for guiding discussions and reflections about a firm’s situations and its alternative approaches needed.
The alternative strategic management structures include the corporate level, which is at the top of the decision making hierarchy and is composed of the board of directors and the chief executive and administrative officers which is mainly responsible for the firm’s financial performance and achieving non-financial goals such as fulfilling its social responsibilities. An example of the corporate level for example, would be the airborne express operations, which involves the direct sale to high volume corporate accounts and developing an expansive network in the international market (Pearce & Robinson, p. ).
The middle of the decision making hierarchy is the business level, which is composed of business and corporate managers, they must dictate the direction and intent generated at the corporate level into concrete objectives and strategies for its individual business divisions. In other words, business level strategic managers determine how the firm will compete in a particular product market arena. And at the bottom of the strategic management structure is the functional level of management. This level is made up of managers of products, geographic, and functional areas.
These managers develop short term strategies as well as yearly objectives in areas such as production, research, marketing and finance and accounting, as well as human relations, but most importantly, their main responsibility is to implement or execute the strategic plans of the firm. Some of the theories that surrounds the strategic management of an organization, is that we must examine the differences among the economic theory and management so that our assessments of the management theory will be accurate and understandable.
Unlike the economic theory, which depends on one’s own philosophical analysis, management has no positive theory of organizational behavior. Here, management gets ideas from various social science disciplines, such as economic theory and organizational theory. And finally, the third theory consists of focusing on solving different problems on different levels of management. Overall, strategic management involves the solving of key problems in a firm’s activity, such as the choice of competitive strategy that will allow the firm to profit (Storchevoi, 2015, p. ).
Another major component of strategic management is the cultural factor of the organization in which an organization must be prepared to reshape to fit its new organizational strategies. The hierarchy of an organizational leadership such at its corporate level, should implement its cultural needs as it needs changes within the external markets of the environment. Most CEO, s does not see themselves as being able to influence culture because they are resigned to their heritage (Sayles & Wright, 1990).
In my conclusion, the success of the strategic management process is the ability for management in an organization to be an innovator, because, without innovation continuously in an organization, the firm would be less likely to survive the turbulent forces that may come their way, and whereby managing strategies, can help give all managers tangible and a personal career advantage as well as making their job more rewarding, an adding value to their organization or business by helping it achieve successful outcomes and meeting their organizational objectives and goals well into the future.