Strategic management and decision making Strategic management is a disciplined effort or control to make necessary decisions that have an effect on a business or an organization; the aim of strategic management is mainly to develop new, innovative or diverse ideas and opportunities for potential or development, and facilitates or assists an organization to achieve its goals (SM, 2010). In reality, strategic management not only can be used or applied to determine mission, vision and values or objectives, but it also establishes roles and responsibilities or timelines in a business (David, 2009). In the following sections, this study will focus on and examine the nature of strategy formulation, implementation, and evaluation activities, and analyze the potential pitfalls or risks in using a strategic-management approach to decision making. Formulation Strategy formulation is the process of establishing the firm's mission, goals, and choosing among alternative strategies or plans; it involves and implies that preparing the best approach to respond to the circumstances of a firm's environment, whether or not its conditions are known in advance; being strategic and tactical, then, means being clear about the management's aims; being aware of the company's resources, and incorporating both into being consciously responsive to a dynamic environment (SM, 2010). As nearly all businesses have limited resources, top leaders and management must determine which alternative plans or strategies will do well to the organization most; strategic management requires attention to the big picture and the motivation to adapt to circumstances, and consists of the following aspects: Formulation of the organization's future ... ... middle of paper ... ...c management or planning presents a structure or agenda for dealing with issues and solving problems, therefore, understanding potential risks or pitfalls of strategic management and being prepared to deal with them is critical and vital to success. Strategic management not only permits top leaders and managers to be more proactive than reactive in building or developing their own potential or outlook in an organization, and it also lets them to make the first move and influence activities, consequently, executives and management can control or in charge of the company’s own future, and achieve its main goals and objectives. Overall, increasing cost-effectiveness and efficiency, improving the value for its stakeholders, and advancing customer services and management excellence are the key objectives of strategic management and decision making in an organization.
Blue Nile is one of the largest jewelry companies that sell jewelry products online. Blue Nile was formed in the year 1999 (Arthur, 2007). It is recognized as the company with the largest volume of sales in the world. It was recognized by internet retailer, a US magazine, as established in terms of size more than three largest jewelry retailers that conduct their businesses online. It has won several business awards in its historical times. It has also been ranked as the leading company in internet based customer service by consumers in 2002. It is the only jewelry company known to have received this award. Blue Nile has been selling wedding and engagement rings to more than 80,000 partners between the year 2000 and in the mid 2006. Internet retailer also recognized Blue Nile as the leading with the best web in 2007. In 2006 it also received an award from Kiplinger’s as leading best online jewelry retailer.
Strategic management has many purposes like designing a formal system of strategic management the role of strategic planning within the strategic management. ...
Strategic planning is an organizational management action that is utilized to set needs, focus energy and resources, reinforce operations, guarantee that employees and stakeholders are moving in the direction of common objectives by setting up a full understanding around intended results, and evaluating and conforming the organization 's direction in response to a changing environment. It is a disciplined effort that produces key decisions and activities that shape and guide what an organization is, who it serves, what it does, and why it does it, with an attention on what 's to come. Effective strategic planning explains not just where an organization is going and the activities expected to operate, but also how it will know whether it achieves success. Having said that, many of the strategic plans cannot accomplish their goal, and there are many reasons; however, in this paper I will discuss three major issues that lead any strategic plan to failure, which are the lack of consensus, having too ambitious plan and the failure to integrate the plan into the culture, operations, and budget.
The strategic management process implies sequential and interrelated activities, situation analysis (scanning and evaluating the current organizational content and internal environments), strategy formulation (developing and then choosing appropriate strategies), strategy implementation (putting strategies into action), and strategy evaluation (evaluating the implementation and outcome of strategies), leading to some outcome. These interrelated activities result in a set of strategies the organization uses in doing business. To manage strategically means to analyze the current situation, develop appropriate strategies, putting those strategies into action and then evaluating and changing those strategies as needed. The three main types of
According to Wheelen & Hunger, strategic management “is that set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control” (2004, p2). All eleven good to great companies are benefit from strategic management and gain long term strategic advantage then lead to outperforming compared companies.
“Strategic management analyses the major initiatives taken by a company’s top management on behalf of owners, involving resources and performance in internal and external environments”. There are many well known strategists for strategic management.
Strategic planning is a critical process for any successful business. It outlines the framework in which the organization operates. Therefore, each area of the process should be carefully considered and developed, with the understanding that some areas are relatively static, whereas other areas change and grow depending upon the environment. By far, the most important part of the strategic planning process is its implementation. If the process is never implemented, its development is just wasted energy.
Generally, strategic management is a set of managerial decisions and actions that determines the long-term performance of a company, involving both internal and external environmental scanning, strategy formulation, strategy implementation, and evaluation and control. According to the study of strategic management, the corporation should concentrate on monitoring and appraising outside opportunities and threats based on an organization’s strengths and weaknesses (Thomas Wheelen and David Hunger, 2012).
Strategic management refers to the management of company’s resources for achieving its objectives and goals. It is the preparation and application of the major goals and initiatives that are taken by the top management of the company on behalf of CEO. It includes assessment and evaluation of resources before making a final decision. It involves setting goals, analysis of competitive environment, assessing strategies, and ensures their alignment with company's goals. In Nike, the strategic management is strong and the company uses all resources so that it can achieve its goals effectively.
Strategic management can be portrayed as set of official activity and conclusions that aides in forming the long-run performance of the business. It is comprehensive of ecological examining, both internal and external environment, and strategy definition, execution of systems, evaluation and control forms (Hunger, 2003). From this time forward, strategic management highlights on the assessment and observing of the external dangers and prospects out of sight of association's internal potencies and shortcomings. Diverse researchers characterized strategic management in distinctive ways. According to Rumelt (1991), strategic management is a surge of decisions and activities, which prompts the advancement of a compelling strategy or techniques to help accomplish corporate goals. The strategic management procedure is the route in which strategists focus goals and settle on strategic decisions. He further recognized that strategic management's primary center is the accomplishment of
Strategic management is the process of formulating and implementing strategies in organizations. Strategy formulation is the first strategy in strategic management, which is the process of creating strategy and that involves assessing existing strategies, develop new strategies and strategic plans. The second strategy in strategic management is called strategy implementation, which is the process of allocation resources and putting strategies into action.
At the corporate level, the strategic management process includes activities that range from appraising the organization’s current mission and goals to strategic evaluation. The first step in the strategic management model begins with senior managers evaluating their position in relation to the organization’s current mission and goals. The mission describes the organization’s values and aspirations; it is the organization’s raison d’être and indicates the direction in which senior management is going. Goals are the desired ends sought through the actual operating procedures of the organization and typically describe short-term measurable outcomes.
Strategic management is regarded as an important process for businesses (Bowman and Asch, 1987; Kumar, 2010; Thomson and Strickland, 2003; Viljoan and Dann, 2003). The growing environment where these organization or company compete somehow will determine whether the company standstill or gone. Thus, most companies are trying to improve their performance to survive and expand. Strategic management process is important for a firm’s success because it enables a firm to develop a future direction, provides the ways to achieve its mission, and ultimately leads to value creation (Porth, 2003). A review of literature by Powell (1992) also indicates that firms who adopt strategic management generally improve their performance.
Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Strategic management hinges upon answering three key questions:
Strategic management is the way of implementing different business strategies and plans to attain certain specific aims and objectives. It involves collection of decisions and different rules and policies that tend to define the results that are generated in the form of better business performance. For undertaking these activities, management should possess an in depth understanding and be able to assess the general and competitive external and internal business environment to take proper business decisions (Cornelis, 2010). McDonalds is an organization that offers a range of products and services in a very effective manner that makes it a market leader in providing fast food services all over the world. By enforcing suitable strategies, McDonalds can increase its level of sales and will also help in upgrading as well as sustaining the market by acquiring competitive advantage (Schoenberg, Collier and Bowman, 2013).