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Strategic management – what is it and what is it about?

Every entrepreneur struggles with many problems in his daily work. Their crowds can lead to serious consequences that can lead to the collapse of the company. With this in mind, enterprises implement strategic management into their activities. It enables better preparation not only for failures, but also for successes, the effects of which should be maximized.

The modern market is characterized by rapid changes that force enterprises to dynamically improve. Appropriate management strategies are indispensable for this. The most important elements of strategic management that can significantly contribute to the development of your company will be described below.

Strategic management – what is it? Definition

Many people are able to intuitively define what strategic management is all about. However, the encyclopedic definition shows how much area this concept covers:

In short, strategic management applies to the entire organization. It covers all aspects of its activity in a sufficiently long time perspective and the need to constantly improve tasks and processes.

However, such information still does not give the full picture of the importance of implementing various management strategies.

What is strategic management and what it is best explained as a company’s long-term action plan that sets goals and makes it easier to make key decisions. Such a strategy must take into account both the company’s strengths and its limitations. Thanks to this, it is possible to avoid many mistakes in the current activity, which will result in harmonious development. The management strategy must also take into account the principles and mission of the company, which should be the basis on which the further improvement of all internal processes is based.

The essence of strategic management

The essence of strategic management is to create a development plan that constantly brings the company closer to achieving success in the field of finance, technology or strengthening its position on the market. An in-depth analysis allows you to verify all aspects of the company’s operation, and thus correctly define the space for development. It must be carried out continuously so that the obtained results are not buried by dynamic changes on the market.

The main problem in the implementation of strategic management is too narrow approach to the subject. If the entire procedure is to bring tangible benefits, it is necessary to act in many ways in every department, team and project. It is also important to rely not only on your intuition, but also on the collected data and in-depth tracking of news and trends appearing on the market.

Elements of strategic management

Strategic management is a key element of the company, therefore you should be properly prepared for its preparation and implementation. The most important elements of strategic management are:

Strategic analysis: is the analysis of all processes within the organization. Finding strengths and weaknesses is the basis of its correct execution. For this purpose, various methodologies can be used, tailored to the current needs. It can be the most popular SWOT analysis or less popular SPACE, ASTRA and others. It is important to analyze the condition of the company both in terms of internal processes and position in relation to the competition.

Designing and implementing a management strategy: having accurate data from the analysis performed, you should choose the optimal development path. In this element, you need to show a large dose of intuition, which will allow you to adapt well to the challenges of the market. The next step is to implement the strategy, which is one of the most difficult parts. It requires all employees to work hard to improve the company’s operations.

Strategy control: strategic management is a long-term perspective of the company’s development, so an important element is the supervision of its correctness in the face of a dynamically changing market. By analyzing the effects of implementing the plan, you can discover new problems or opportunities that shape anew the reality in which the organization finds itself.

Strategic management – models

When creating a management strategy, two models can be used that allow the management to plan the company’s operations in the future. Two models are available:

A. Model based on rigid subordination of analytical data
B. Model based on interpersonal relationships and employees’ needs

What is strategic management based on analytical data can be best explained on the example of large companies that use their market position to maximize profits in every possible aspect of their business. The staff is clearly divided into teams, and only the managerial part has the conditions for working on innovations. The rest of the employees are to perform the assigned tasks as soon as possible. In addition, the team of analysts regulates the company’s policy on an ongoing basis, taking into account various statistical data.

The model focused on the needs of employees also analyzes the situation inside the company and on the market on an ongoing basis, but offers better working conditions for each employee. Thanks to this, work is more efficient, and employees are more willing to try to improve the operation of the company.

Strategic management methods

Both of the above models of strategic management have advantages and disadvantages. The best way to create a coherent corporate strategy is to create hybrid models that combine the positive qualities of both of them. In such a case, a factual analysis supported by hard figures is obtained, but taking into account the needs of the staff and its impact on the development of development.

With this in mind, you need to adapt your strategic management methods to your business needs. The elements that will influence the choice of the appropriate method are:
– the size of the enterprise,
– the level of qualifications of the staff and management,
– technological level,
– market position,
– business development opportunities.

Benefits of using strategic management

Among the many benefits of using strategic management, the most important is better preparation of the company for the activities undertaken in the long-term perspective. Thanks to this plan, all employees know what their goals are and can better adjust to the surrounding reality. Additionally, through strategic management, it is possible to better adjust the budget to the needs and to finance the most urgent projects.

The disadvantages of strategic management, which can affect the company, should not be forgotten either. The main disadvantage is the time and money required to create the entire plan. This applies not only to the development and implementation phase, but also to the subsequent control. Flexibility in implementing the strategy’s assumptions is also important. Too strong attachment to the written rules may result in the lack of an appropriate reaction to random events.

Remember that the right approach to strategic management will improve the activity and quality of your company’s work. It will also facilitate its more dynamic development. Consider the elements listed in this article to consciously approach the issue of strategic management in your company.

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