- Elon Musk, Investor & Entrepreneur
Strategic management is the formulation and implementation of the major goals and initiations of a company’s top managers. This can be done on behalf of the owners and board members and is determined by examining the company’s resources and other internal and external factors.
The goal of strategic management is to keep the company moving in the same direction with the same goals in mind. This involves making sure that the company’s goals are clear to everyone, that appropriate policies and plans are developed, and that resources are allocated to make them happen. It is an ongoing process that involves a lot of strategies to make happen.
Ensuring that strategic management can be implemented involves the work of different management teams across the company. Multiple departments have to work together to define the goal and develop plans that make the goal achievable. While one team may be in charge of developing strategic management, it is not doable without the help of others.
There are different frameworks and techniques to develop strategic management appropriately. Different philosophies can also be applied depending on the company and the goals the company has. No strategy stays the same for long and you should be familiar with different models and philosophies to adapt to changes.
It is also crucial that managers know about different concepts to know what the weaknesses are in each. No strategy covers all bases and implementing goals requires a level of flexibility that many strategies don’t allow for.
CONCEPTS OF STRATEGIC MANAGEMENT
Since the 1960’s people have been studying and developing different concepts of strategic management. This is not only done to develop new concepts to help businesses but to also analyse how businesses operate. The different strategies can be implemented to accomplish different goals across multiple businesses.
These concepts analyse the strengths and weaknesses of different personnel and resources in the company. You will want to be familiar with how different concepts place strengths and weaknesses and how to utilize them. By examining your company’s resources, personnel and how they work together, you will be able to develop a strategy that achieves your goals.
Many of the concepts also work with the “3 C’s.” The 3 C’s are cost, customers and competition. The different theories and concepts work to keep costs down while maintaining and increasing customers to stay competitive. Each theory and analysis presents different ways to utilize your strengths and turn weaknesses into opportunities.
Concepts and theories have developed over time as we learn more about business and how people work best. You can determine what philosophy works best for your business and goals. Even when you find one that you like using and works for your business, it is good to know about several different concepts so you can change strategies when you need to.
Having ideas on how to deploy your personnel and resources in the best way is a good start to accomplishing any long-term goal. It will keep everyone on the same page and provide a clear path forward. Having a clear strategy also makes it easier to evaluate how well the plan worked and ways to fix it in the future.
LIMITATIONS OF STRATEGIC MANAGEMENT
As with all concepts and philosophies, there are limitations to strategic management. Each concept and philosophy can provide a steady foundation to achieve goals and provide consistency throughout the process, but they can also prevent other options from being considered.
A strategy is used to make sure that everyone is on the same page about goals/plans and can provide structure to an ongoing process. The cost of this is that other options that can also help this process along are often overlooked or ignored. If it doesn’t fit into the current strategy, it can be ruled as unnecessary by management.
Being flexible in accomplishing goals is a crucial aspect of running a business. You want to be sure that your employees know that their input is welcome and that their good ideas will be implemented. It is detrimental to stick so closely to a strategy that other good ideas are ignored.
A good strategy can have a consistent plan that provides the structure for implementing the policy while also being flexible enough to accommodate new ideas. Strategies should not be viewed as a one size fits all option and should allow for variances and nuance. You should always plan for surprises while implementing a plan so that you won’t be surprised when something goes wrong.
A ‘too strict’ strategy plan can also limit the managerial team and prevent them from doing their jobs well. Workplaces are dynamic and you need to be able to think on your feet while managing. Sticking to a strict strategy is limiting what solutions you can use when problems arise.
The best way to handle implementing a strategy is to be able to adjust the strategy based on your company’s needs and what the end goal is. Being able to decide what aspects of a strategy are important and what parts can be manipulated is a valuable skill in managing a team. Using your own experience as a guide will help you guide your team.
It is also important to understand the limitations of each strategy before implementing it. That way you’ll be able to work around the limitations and adjust for any problems that will arise. No strategy is perfect and a good manager should acknowledge that. By working with the limitations instead of against them, it will be easier for the team to address any problems that arise in the strategy.
Strategic management is a form of management that integrates different departments within a company to accomplish a common goal. Many theories and concepts address how to best use company personnel and resources to best implement plans and policies to accomplish the goal. Even with these numerous concepts, there are still shortcomings with implementing a strict strategy and managers should be aware of them.
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