Explain what strategic management is and describe the strategic management process. (20)
Many of today's most successful business organizations continue to survive because of strategic planning. Because changes are occurring so radically, there is increased pressure on managers. They have to respond more accurately, on a timelier schedule, and with a direction or course of action in mind. Managers therefore have to adopt a strategic management approach.
Cole (1994:123) defines strategic management as a process being directed by top management, to determine the fundamental aims or goals of the organization and to ensure a range of decisions which will allow for the achievement of those aims or goals in the long term, whilst providing for adaptive response in the shorter term.
Strategic management focuses on intermediate time frame usually 3 to 10 years and also on an organization as a whole. For example, if managers decide to increase productivity level, the entire firm's department such as the marketing and financial department will be affected. Therefore, managers need to regularly monitor "where they are" in terms of reaching their objectives. Their business strategies need to be constantly analyzed and alternative plans need to be considered in order to review progress according to original plan, assess other opportunities that could be exploited and identify risk associated with alternative strategies.
Strategic management can be divided into three major areas:-
Strategic analysis: - position facing the organization.
Strategic choice:- formulation of alternative courses of action.
Strategic implementation- planning how the choice of strategy can be put into effect. (Bailey, et al, 2005: 40).
The aim of strategic analysis is to form a view of the key influences on the present and future well-being of the organization and what opportunities are afforded by the environment and the competencies of the...