Importance Of Strategic Management
Strategic management is a functional tool that helps the organization boost the social and economic status of the business while gathering facts about the position of competitors in the market, their pricing strategy, promotional activities, and things that are related to the enterprise. This forms the main theme of this paper where the concept of strategic management is discussed along with its application in the organization. Strategic management is a relatively new field in the business sphere.
Management is described as the science of performing activities through human resources. As per this definition, every person in the organization is directed and controlled by a manager to accomplish the desired set of goals with maximum effectiveness. But, considering the contemporary definition of management that is strategic management, it could be asserted that the process of strategic management assures the revenue of enterprises utilizing an appropriate and successful set of strategic approaches. According to this concept, successful strategic approaches are formed based on enterprises’ demands at a time period. Strategic managers must be capable to organize and manage activities, since coordinating activities is not achievable without utilizing successful strategic plans. Execution of strategic plans could be controlled and supervised while applying effective strategies. In other terms, strategic management is defined as a course of action that entails a tactical viewpoint; explicitly, leaders who pursue this process are talented to identify and assess the strategic concerns of the business and recognize the goals of the enterprise to implement the best set of strategies.
Strategic management is a theoretical approach to a modern organization.
Managers must consider tactically first, then apply the process of strategic management within the organizational plans. Application of the process entails the following steps– objective setting, analysis, strategic formulation, implementation, and strategic evaluation. The process is best applied when every person in the organization comprehends the strategic approach. First goals and objectives are determined by what the organization intends to achieve in the future. The next stage of strategic management application is analysis. Information gathered in this step would form the next two stages. In this step, business leaders collect as much information and facts relevant to achieve the organization’s mission and goals. This step enables managers to concentrate more on the needs of the organization and identify initiatives that will develop the enterprise. Strategy is formed in the next step and information is considered that is gleaned from performing the analysis. Resources are determined that the organization currently has and how these sources can help to achieve stated objectives.
Effective implementation of a strategic approach is crucial to the success of the organization. This forms the action stage of strategic management. If the overall approach fails to perform well with the existing organizational setup, a new system must be fixed at the start of this phase. Strategic evaluation and monitoring activities take into account performance assessment, a constant review of in-house and external matters, and taking corrective measures if needed. In this phase, parameters are defined that mirror the objectives stated in the first step of the strategic management process. In view of the critical effect of strategic management on the design and execution of managerial plans, it offers new methods to stop the leaders from undertaking inapt steps for sharing the future state of business enterprise.