Exploring the Key Characteristics of Strategic Management

Strategic management is the activities, which are chosen and carried out in order to achieve organizational goals and sustain competitive advantage. Strategy making includes a vast range of activities and covers long-term planning and preparations, resources management and allocation as well as flexible adjustment to the conditions. In the future article the author plans to describe the main features of strategic management and highlight their importance for achieving organizational goals.

What is Strategic Management?

Strategic Management is the process of formulating, implementing, and evaluating business strategies that enable an organization to achieve its long-term objectives and gain a competitive advantage. It involves making high-level decisions that affect the entire organization, determining the direction and scope of its activities, and ensuring the effective allocation of resources to achieve its goals.

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Strategic management is the determination and coordination of cross-functional decisions that help an organization achieve its long-term goals. There are several features of strategic management, and all of them are related to long-term planning, allocation of resources and keeping competitive advantage. Below are the key characteristics:

• Ambitious: In other words, strategic management involves a capacity to be ready to handle the cope with unmanageable factors which may be encountered in the process of an organisation’s operation. It operates in an area where things are not always very clear. Despite the positivity of its mission and vision statement, it is not always clear or unpredictable the results it produces, not even when it promises them.

• Competitive Advantage: Strategic management, being a tool for the managers, helps the managers in formulating the new radical long-term goals for achieving competitive advantage. These tactical management strategies may be used by managers to offer better and more satisfying products and services to the clients, guarantee the availability of competitively priced products, and foster the development of a highly motivated workforce throughout their respective organizations.

• Organization-wide: Organizational strategic management affects not only the department that undertakes the strategies but also has a domino effect on the whole organization. Intelligent decision-making ensures that an individual does not sway from a particular path. Therefore, what businesses engage in requires caution and rationality since strategies affect every facet of the undertaking and result in positive outcomes for the business.

• Strategic Alignment: The objective of strategic management is to get the complete control over the course of an organization. Upper management intends that the decisions and actions that it executes should lead all the activities to where specific objectives are to be achieved and to ensure the participation of both the functional and organizational levels of involvement in the formulation of objectives and strategies. These objectives include a wide range of domains, including finance, manufacturing, research and development, marketing and many others. To get the best results it is a good idea to set objectives in such a way that they make sense and are likely to make the organization successful.

• Implementation Aid: An important aspect of the strategic management process is checking the execution of strategies and actions based on action plans. Consequently, without following the correct procedures, an organization is not capable of producing the intended outcome levels even where the strategies applied are effective. An attractive feature of strategic management is the possibility of rationalizing the practice of putting into action strategies and plans. This is one of the greatest benefits for people, that in any case will not be able to carry out all the work on their own. The general focus of strategic management involves supporting the achievement of business objectives through the planning and execution of plans.

• Long-term Issues: Strategic management aims to resolve issues that it expects to endure for a long time. However, these may not seem urgent now but could be valuable to the organization later. For example, take employee training. It might take a while before a company shows results after you invest in it. However, employees who’ve gone to postsecondary education are more productive and achieve greater financial results.

• Impact on Operations: Effective strategic management mitigates operational challenges, done anxiously. Let us take the example of the imagined link between a % increase in salary and performance. And higher employee motivation to perform would create a rise in operational output. Business decisions, for example, are when you can or cannot offer products on credit or what is the best sales strategy for certain types of customers. If operational issues, such as potential issues, materialize, it is the responsibility of the lower-level administrators to decide how best to address them.

• Stakeholder Involvement: A stakeholder is an organization or an individual of interest in a significant order with the prosperity or the downfall (or, sometimes, the playing) of the enterprise. Many people have something to do with the success of a particular company. Such entities include the government, the customers, the employees, the suppliers, labour organizations, banks, social welfare agencies, etc., all for a different purpose for every individual in the group. Businesses will earn goodwill with customers only through the customers’ own expectations. Properly managing the enterprises’ engagements with stakeholders is prosperous for enterprises. When big decisions are taken, it is vital to secure the support of all stakeholders whose support is required.

• Fundamental: The organization has definite ideas regarding the correct way to make things work, from the management of strategic initiatives. Imagine a vessel without rudders — one that’s completely unguided — it’ll arrive very quickly (to its destination.) Strategy is the most important thing of all in any organization. Strategic management’s responsibility is to predict and look into the future growth of the company, and its achievement of the company’s objectives is critical. The objectives could have been promised over five years ago. The further failing to prioritize their short-term objectives is a big issue with this organization.

• Future-oriented: Strategic management decisions are based upon occurrences which lie yet to be beyond the routine, daily activities. The dynamic and uncertain nature of the business environment does not allow managers to discern with certainty the exact outcome that a decision will generate.

Also Read: Top 12 Benefits of Strategic Management

The Need for Strategic Management

The strategic management setting provides the firm with a route map. It enables the firm to think in advance about what decisions it will make with wider, often wider, consequences. It gives direction to the company, which means how growth could be done.

The firms are using strategic management for the following needs:

• Adapting to a Rapidly Changing Environment: The strategic management setting provides the firm with a route map. It enables the firm to think in advance about what decisions it will be making with wider, often wider, consequences. It gives direction to the company, which means how growth could be done.

• Ensuring Long-Term Growth and Sustainability: The strategic management setting provides the firm with a route map. It enables the firm to think in advance about what decisions it will make with wider, often wider, consequences. It gives direction to the company, which means how growth could be done.

• Creating and Sustaining Competitive Advantage: The strategic management setting provides the firm with a route map. It enables the firm to think in advance about what decisions it will make with wider, often wider, consequences. It gives direction to the company, which means how growth could be done.

Also Read: Strategic Management Process: Meaning & Steps

Conclusion

Strategic management is one of the most important processes which any organization planning for the future can undertake. It entails targeting, envisioning, choosing and adapting within an organization or a project. Through proper linking of an organization’s resources with its objectives and the external operating environment, strategic management facilitates struggle and evolution among the undertaking.

It is also dynamic—organizations have to continuously assess and revisit strategies over time, depending on new data, trends, or threats. Other essential factors for success include employing decision-makers in advisory roles and embracing change. If you want to learn more about Strategic Management, you can consider pursuing the Certificate Program in Strategic Management and Business Essentials offered by Hero Vired in collaboration with INSEAD.