Strategic management is a not a new concept. It has been defined as a management system which links strategic planning and decision making with the day-to-day business of operational management. Strategic management is not a simple, step by step process, but a complex and iterative process which needs hard work and dedication from many people in an organization to implement it toward the objective. It is the process for the leading members of an organization to forecast its future and develop the necessary procedures and operations to achieve its future. Strategic management is usually found in high levels of management to help organization gather, analyze and organize useful information to keep up with industry and competitive trends. The rational and dynamic approaches to strategic management are two different schools of thought. The rational approach is well-planed and more prescriptive on strategy selection. However, the dynamic approach is opposite. Rational ApproachContinue reading
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.
Resource-Based View (RBV) Strategy Formulation
The resource-based view (RBV) is a tool to determine strategic resources and how it affects the performance of the firm based solely on reviewing its internal environment while the external environment remains fixed. Firms using RBV competes in terms of their resources and capabilities. The aim of this article is to study the factors that influence a firm’s performance. The RBV emphasizes the firm’s resources as the essential elements of competitive advantage and performance. It assumes two assumptions in examining sources of a competitive advantage which are that the firms are heterogeneous in terms of the resources they control and that resource heterogeneity can continue over a period as the resources used to implement their strategies are not easily portable across firms. The RBV method of analyzing a firm’s performance is focused that other vital factors that tend to be disregarded. Resources are not valuable of themselves; instead, they areContinue reading
Relationship between Strategic Management and Leadership
Strategic Management is defined as the process by which organization’s objectives are set, policies are developed and plans are laid out to achieve these objectives. This requires the management to allocate resources to implement the plans. Essentially, this refers to the top echelon of management in an organization which strives to provide the overall direction of the whole enterprise to achieve their set targets and goals. These responsibilities are usually performed by their Chief Executive Officer (CEO) and the executive team, guided by organizational mission and vision statements. The strategic management is the on-going process that can be broken down into several stages. First and foremost, a plan (strategy formulation) is established whereby the functions or purpose of an organization is identified. This helps to shape and implement the broad objectives of the organization. It involves identifying the companies’ strategic advantages and core competencies, whether to focus customer service, grossContinue reading
Role of Social Responsibility in Managing Stakeholder Relationships
Why do companies feel social responsibility is so important in running a business? Social responsibility is defined as volunteering to manage the company’s operations and what they do with stakeholders to have a good impact on the community where the company works. Companies have many responsibilities and one of them is helping out the community to show that the company cares about other things besides making a great profit. Social responsibility increases company’s reputations and makes the company look good, and these companies get rewarded with customer satisfaction. If these companies show poor social responsibility it can ruin revenue and stakeholders may go to another company. Social responsibility is very important because it shows that companies can treat customers, employees and investors fairly. One example of social responsibility is when a car manufacturer doesn’t put a stop on a bad product. First the car manufacturer claimed that it was notContinue reading
Strategy Formulation and Stakeholder Influence
Strategy is defined as the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a changing environment and to fulfil stakeholder expectations. A strategic plan is therefore large scale future oriented activities that allow interaction with the competitive environment in order to achieve company objectives. It follows that strategic management is the process whereby a strategy is formulated, evaluated, and continuously improved. Strategic planning flows from the definition of an organization’s vision, mission and objectives and subsequent environmental scanning, to understand the organization’s strategic position with respect to the macro external environment, its industry, competitors, internal resources, competencies and expectations and influence of stakeholders. This initial process establishes a basis for strategic choice by means of a match of identified strengths to opportunities. The translation of strategic choice into action is then implemented across all levels ofContinue reading
Intuition and Analysis in Strategic Decision Making
In the global marketplace, intuition and rational process both play a crucial role in effective strategic decision making. In various firms, intuitive process is used under the strategic management to develop effective decisions for attaining organizational goals and objectives. Intuition indicates to solve the problem with the help of using sensing and without using rational process. It can be discussed as a process to reach at the conclusion with the help of fewer information those are required for taking appropriate decisions. It is a built-in capacity that is used by the individuals to reach at the solution of the problem effectively. At the same time, it is negatively related with the stable competitive environment. Intuition is used as a business tool in many organizations to conduct and run the business successfully. Intuition is a psychological function supports to individuals for using her/his experiences and knowledge to isolate and integrate theContinue reading