Strategic Management

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Strategic Management

Introduction

To deal effectively with the wide array of factors affecting the ability of a business to grow and prosper, managers need advanced processes they feel will facilitate the optimal positioning of the business in its competitive environment. Such positioning is possible with strategic management because this process improves preparedness for unexpected internal or competitive demands.

Therefore, strategic management is an all-encompassing approach for formulating, implementing and evaluating managerial decisions in a way that permits the business to reach its objectives.

For a strategic management plan to be successful, however, every manager should:

• Clearly see the need for change

• Be firmly committed to the idea of changing the business planning process

• Assure that the strategic management process has credibility with everyone involved

• Make sure that final plans are realistic and reflect actual resources and capabilities

• Train all participants in the procedures essential to the strategic management process

• Develop concise and well-organized plans

One of the world’s best performing natural resources companies created a unique organizational structure that combines the advantages of small business units with “virtual structures” - groupings of these business units - that can address different strategic issues and competitive environments.

Overview

The formality of the strategic management process varies widely. Formality refers to the degree to which membership, responsibilities, authority and discretion in decision making are specified. It is an important consideration in the study and application of strategic management because the degree of formality is usually positively correlated with the cost, comprehensiveness, accuracy and success of planning. The requirements for small business indicate the need for a moderate degree of formality. This is consistent with the ability to communicate face-to-face (size) and the need for flexibility (changing demands). The important issue is involvement with the process, not generating reams of paperwork (Camerer, 195-219).

Resistance to change should be reduced. Businesses vary in the processes they use to formulate and direct their strategic management activities. Many using sophisticated planning techniques have developed more detai...

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...heir management of their organizations, due to their important role in the culture formation and preservation process. They need to be continually aware of the cultural values espoused through their behavior and actions.

References

Astley, W.G., and C.J. Fombrun, 1983, Collective Strategy: Social Ecology of Organizational Environments. Academy of Management Review 8: pp. 576-587

Burgelman, R.A. 1996, A Process Model of Strategic Business Exit: Implications for an Evolutionary Perspective on Strategy. Strategic Management Journal 17: pp. 193-214

Camerer, Colin F. 1994, Does Strategy Research Need Game Theory? In Fundamental Issues in Strategy: A Research Agenda. Richard P. Rumelt, Dan E. Schendel, and David J. Teece (eds.). Pp. 195-219. Boston: Harvard Business School Press

Galbraith, Jay R. 1995, Designing Organizations: An Executive Briefing on Strategy, Structure and Process, San Francisco: Jossey-Bass Publishers pp. 12-15

Harrison, Jeffrey S., and Caron H. St. John, 1998, Strategic Management of Organizations and Stakeholders: Concepts. 2nd Edition. Cincinnati, OH: South-Western College Publishing, pp. 44-59

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