Today’s world is growing faster by technology and also new methodologies around business. These new thesis and methodologies helps business organizations especially in their developing process. As we know all organizations need to develop while the world is changing. Because changing is only thing never changes. In that case, strategic management is mostly used in business area to adopt changing world’s conditions and make sustainable development to be in the area all the time.
What is Strategic Management ?
Strategic Management consists of two words strategy and management. Strategy represents a word means a policy, a way to be lead, a long-term plan. We may call each decisions as one of strategy, and more we may say strategy is not used just in business. And we cannot describe management without strategy word. Because management is take the lead in a topic by decisions as a part of strategy.
We would have described strategic management by describing strategy and management words separately. And if we get them together as a whole, we may see the importance of strategic management and we may have the power to lead, to gain and more even what we need especially in business area.
Where Do We Use Strategic Management ?
Organizations try to be leader in the market for the sake of their selves. They always aim to gain more protect their current profit. Sometimes to protect current profit, to make it higher or to protect organization’s ranking in the market all the organizations need a strategy to be managed by their managers.
A lot of managers owe their success in their field to strategic management. Professionals always use that modern methodology to be successful and they succeed when they use it correctly.
Key Concepts for Strategic Management and Organizational Goals
Strategic management is a special method needs attention more than usual and takes time to take it hand as a whole. To understand and execute strategic management very well we need to know all parts of strategic management like what are the key concepts ? What are the stages ?
Key concepts are really important during the process we try to be successful by our strategic management. We may describe them as steps of strategy while we manage in the process.
First key concept is goal setting in strategic management. Organizations may have some aims like to protect current profit, to make profit higher than current one, to be leader in the market, to protect its current situation in the market or to try to sustainable development.
Goal setting means setting specific targets to meet with them. All organizations aim to have something by taking some decisions in the beginning of their strategic management. To set a goal helps strategic management to be developed. Employees would know what they have to do or what are they doing to reach their goals. Also manager would have known what he has to do to meet with organization’s goal and could do some plans according to those goals.
Organizations could plan what they will do to meet with their goal by strategic decisions such as what they will prepare for advertisement or what kind of policy they will accept to improve their marketing skills.
If we try to give an example for that from beginning till the end, we could take an organization to our hand as an example. Just imagine that organization wants to be successful in its field. Its manager also wants to be successful in their field as an manager, an employee and also as the organization itself. So manager chooses using strategic management as a method to be successful. That manager will set a goal as a first step for his strategy so that he could make organization’s aims clear, employees willing, policy-strategy or way clear to make a plan in the future by taking those goals in hand seriously.
As we see in that example; goal setting helps strategic management’s next steps to make this strategy sustainable in organization’s future. Employees could know what they do and what they have to do, managers would have known their responsibilities so the organization could take the lead in their way stable.
Analysis Strategy Formation
Many academic resources claims that analyzing is first step in strategic management. Making analyzing helps to understand environment clearly. If an organization has some aims to reach, that organization has to do some researches or analyzes first about environment in the beginning. Especially SWOT analysis is the most important point here in terms of strategic management concepts. As we all know SWOT analysis consists of organization’s strengths (what is the organization’s power), weakness (what is that lack in the organization i.e. skills or something else), Opportunities (while leading the way in strategic management what kind of chances the organization will have or miss), threats (what kind of risks the organization might have while leading the way in strategic management) and more. By that way, the organizations would have known environment, try to make a plan as understand.
You have to plan carefully if you want to use strategic management as a method. And if you want to plan carefully to use strategic management, you have to make some analysis and researches about your environment and all other thinks related your topic first. As you see this is a chain-style but we may say the most important point in the chain.
Forecasting is different than others, because you use them in some terms but you have to use forecasting during the process.
Even if you haven’t made analysis yet, you must predict something could happen and evaluate possibilities you might face during the process.
You set your goal, make some analysis and even you might have planned your way but it hasn’t finished yet. While you’re monitoring the process you have to forecast all the possibilities. You may face some problems or other opportunities. In that case you may need to change your strategy by making another plan or maybe you will make little changes in your plan to change the situation. Thinking all the possibilities and being ready for all the negative and positive possibilities makes you a good manager so the organization could have its goals more clearly.
Planning is to turn theoretical works into practical implementations. In another hand, what kind of a method the organization’s manager will lead (i.e. what kind of resources organization will use, how many employees will be needed, which field of market they think to introduce etc.)
We’re starting to use strategic management slowly. First, we set some goals for our organization and then made some analysis about environment we have and think about. After forecasting we would have calculated some possibilities we may have, now it’s planning turn. By care, making plan and determine the way we will lead helps us in our strategic management process.
Planning is the core of strategic management. Because planning covers all the process and includes all the steps will be. A good plan, a good planning means a good strategy, a good management. It is possible to follow the way without any plans. All organizations and their managers need a plan to understand and make strategy clear in their strategic management process.
One of strategic management concept is strategy formation we need to mention about it while we’re discussing. That concept helps to develop some specific actions in Strategy during the management process.
Strategy Formation is that about making some decisions by considering statistics, analysis made and information had. Manager could address key issues by benefit of this strategy formation to face with problems the organization could face during the whole process. We could say simply it is about the way we decide, the way we work, the way we think. Through strategy formulation an organization seeks to find ways of maximizing profitability and maintaining a competitive advantage. Of course all organizations aim that first like others all we know what they need (i.e. to survive in the market, to maximize their profit, to protect their current income, to reduce their outcome, to save their money, to invest some developments for their selves and etc.).
All organizations would like to maintain competitive advantage. Aims could be specific but all of them turn around this issue. They take themselves as core of their ideas. It is normal for all organizations, and in that case all the organizations need to care about issues and follow some formulas to solve them correctly. To complete strategic management they need to formulate their strategy.
Implementation is a fateful point in strategic management and also an important concept we need to mention. You could make ready all the concepts from the beginning till here but you cannot implement your strategy unless you don’t actualize that step.
Strategy implementation is putting actual strategy into practice to reach organization’s goals in your management process. We could say that the point is that to gather all the resources you could reach for your organization and to use them to implement your strategies by creating financial programs, analyzing other resources, considering steps would use and developing processes in management.
In short all things you do could be the part of implementation. What you do as you plan or not, what you think according to your goals, what kind of decision you will do in your management process could be your implementation steps.
Implementation also needs to be synchronous as all in organization. Staff should be willing in that process so that manager or organization could meet with goals set in the beginning of the process. Implementation includes real actions, taking a role in the process by making decisions and leading policy with strategy.
We could call that “the last step in circular strategic management diagram”. When we have a look all the process we have till here; we put some goals in front of us to reach, made analysis to consider environment where we are, forecast about what will happen or what might be happen before, after or even during the process, made plan about steps we will implement, implement formation to formulate our plan and as the last we implement our strategy. Here is turn to monitoring: You must monitoring your all process to be successful. Monitoring means taking all the process under control to interfere and interfere if it is necessary.
By monitoring, organization could change its strategy for a moment during the process it will be need. It’s about action and reaction so organization knows it is right plan or not. Even if it is right plan we might need to make little changes in the plan, or it could be wrong plan and we might need to change the whole plan if it is necessary.
Prof. Rushen Chahal (2012), “Concepts and Process of Strategic Management”, 1-20
Publish of “Institute of Management Technology – Centre for Distance Learning, Ghaziabad”, 1
Publish of Horizon, The University of North Carolina at Chapel Hill, “The Strategic Planning Process”
Diana Wicks, Demand Media, “Key Concepts for Strategic Management and Organizational Goals” Article in Small Business Chron
Pearce and Robinson, “Strategic Management”, 7th Edition
Image is taken from http://jfstrategic.com/our-services/strategic-management-and-total-business-solutions/ address on January 8th of 2018
All the links and books checked at 26th of May, 2013 as the last time.