Strategic Management

Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.

Role of Luck in Strategic Management

While some firms hope to yield above expected normal returns from implementing business strategies, they must however be consistently conversant with the future value of those strategies than other firms playing in the same market. Other firms gain advantage in strategy implementation which is either a manifestation of these special insights into the future value of strategies, or a manifestation of a firm’s good fortune and luck, as sometimes, the price of the strategic resource acquired may be based on expectations on the return potential of that strategy

However, unexpected greater organisational profits can simply be unexpected, a surprise, and a manifestation of a firm’s good luck and possibly not its ability to accurately anticipate the future value of a strategy.… Read the rest

Abey Francis

Effects of Innovative Culture on Organizations

Growth creates a need for structure and discipline, organisation changes which can strain the culture of creativity that is so vital to future success. To sustain competitive advantage, companies need to institutionalize the innovation process; they need to create an internal environment where creative thinking is central to their values, assumptions and actions.

Management changes and management generally is about implementation. When the managers of an enterprise feel pressured, the fear-driven response is generally to implement better and which generally results doing more of the same only quicker or cheaper. While this is great for doing more of the same, it is still the same and meanwhile everything else is changing — customer’s needs, technology, society, macroeconomics and geopolitics are all changing.… Read the rest

Abey Francis

Role of Management Accounting Information in Strategy Formulation

Management accounting can be defined as a process of providing appropriate information primarily intended to assist managers in making better decisions. In previous years, management accounting techniques like traditional budgeting, cost-volume-profit analysis, standard costing and variance analysis, were adaptable to the business environment when product varieties were few, competition was low, overhead costs were relatively low, automated processes were minimal and firms were mostly labor intensive. However, many businesses and environments began to evolve as a result of technological changes, globalization and changing customer mix. Authors identified inadequacies in these techniques, when used as tools in planning and control decisions. Awareness amongst companies on the need to achieve excellence in manufacturing/service delivery and use such an achievement as a strategy to compete effectively grew.… Read the rest

Abey Francis

Differences Between Management Control and Operational Control

Meaning of Operational Control

Operational control or task control is the process of assuring that specific tasks are carried out effectively and efficiently. The focus of operational control is on individual tasks or operations. For instance, it is concerned with scheduling and controlling individual jobs through a shop rather than with measuring the performance of the shop as a whole. It involves control over individual items for inventory rather than the management of inventor as a whole.

Operational control is concerned with activities that can be programmed. For instance, if the demand for an item, the cost of storing it, its production cost and production-time, and the loss involved in not filling an order are known, then the optimum inventory level and the optimum procurement schedule can be prepared.… Read the rest

Abey Francis

Importance of Management Control in an Organization

Importance of Management Control

Control is an indispensable function of management. Without control function, the management process is incomplete. In business organizations, the need for control arises due to several factors;

  1. Firstly, it is difficult to establish fully accurate standards of performance in large and complex organizations. An executive needs all kinds of timely information, which are not always available. Control is required to judge the accurate of standards.
  2. Secondly, there are several temptations in business. Employees are entrusted with large sums of money and valuable resources. In the absence of control employees may yield, to these temptations. An efficient control system helps to minimize dishonest behavior on the part of employees.
… Read the rest
Abey Francis

Impact of Organizational Culture on Strategic Management

An organization is a common platform where individuals from different backgrounds come together and work as a collective unit to achieve certain targets and goals. It contains individuals with different specializations, educational qualifications and work experiences all working towards a common objective. Culture is something which one inherits from the ancestors and it helps to make a distinction between one individual and others. It is termed as culture with the attitude, identify and behavioral patterns by means of governing the way an individual interacts with others.

Meanwhile, strategic management is the process in which a management team develops a mission and vision, objectives and goals, roles and responsibilities and values which ensure the success of the organization.… Read the rest

Abey Francis