Strategic Management- Meaning, Concept & Objectives
Meaning of Strategic Management
Strategic Management is a stream of decisions and actions which lead to the development of an effective strategy or strategies to help achieve corporate objectives. The Strategic Management process is the way in which strategists determine objectives and make strategic decisions. Strategic Management can be found in various types of organizations, business, service, cooperative, government, and the like.
It can be defined as “the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives”. In fact, Strategic Management focuses on integrating management, marketing, finance accounting, production/operations, research and development, and computer information systems to achieve organizational success.
The term Strategic Management is used synonymously with the term Strategic Planning. The later term is more often used in the business world whereas the former is often used in academia.
Definition
Definition Provided by Eminent Authors Lamb Robert, Learned, Schendel, Hofer, Bracker, Jemison, Van Cauwenbergh, Fredrickson and a Few Others
Strategic management has been defined by various thinkers philosophers and practitioners. It can be defined as the formal process for defining company vision & mission, assess internal & external environment, formulate strategies under resource constraints implement strategies, and evaluate the strategies. Strategic management is the art and science of formulating, implementing and evaluating cross function decision that enable the business to achieve its objectives.
Lamb Robert (1984) – Strategic management is an on-going process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e., regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment, or a new social, financial, or political environment.
Learned (1965) – It is the study of the functions and responsibilities of general management and the problems which affect the character and success of the total enterprise.
Schendel and Hofer (1979)-Strategic management is a process that deals with the entrepreneurial work of the organisation, with organisational renewal and growth, and, more particularly, with developing and utilizing the strategy which is to guide the organisation’s operations.
Bracker (1980) – Strategic management entails the analysis of internal and external environments of firms to maximize the utilization of resources in relation to objectives.
Jemison (1981) – Strategic Management is the process by which general managers of complex organisations develop and use a strategy to co-align their organisation’s competence and the opportunities and constraints in the environment.
Van Cauwenbergh and Cool (1982) – Strategic management deals with the formulation aspects (policy) and the implementation aspects (organisation) of calculated behaviour in new situations and is the basis for future administration when repetition of circumstances occurs.
Schendel and Cool (1988) – Strategic management is essentially work associated with the term entrepreneur and his function of starting (and given the infinite life of corporations) renewing organisations.
Fredrickson (1990) – Strategic management is concerned with those issues faced by managers who run entire organisations, or their multifunctional units.
Teece (1990) – It can be defined as the formulation, implementation, and evaluation of managerial actions that enhance the value of a business enterprise.
Rumelt, Schendel, and Teece (1994) – Strategic management is about the direction of organisations, most often, business firms. It includes those subjects of primary concern to senior management, or to anyone seeking reasons for success and failure among organisations.
Bowman, Singh, and Thomas (2002) – The strategic management field can be conceptualized as one centred on problems relating to the creation and sustainability of competitive advantage, or the pursuit of rents.
Objectives
- To exploit and create new and different opportunities for tomorrow.
- To provide the conceptual frameworks that will help a manager understand the key relationships among actions, context, and performance.
- To put an organisation into a competitive position.
- To sustain and improve that position by the deployment and acquisition of appropriate resources and by monitoring and responding to environmental changes.
- To monitor and respond to the demands of key stakeholders.
- To find, attract, and keep customers.
- To ensure that the company is meeting the needs and wants of its customers, which is a cornerstone in providing the quality product or service that customers really want.
- To sustain a competitive position.
- To utilize the company’s strengths and take full advantage of its competitor’s weaknesses.
- To understand the various concepts involved like strategy, policies, plans and programmes.
- To have knowledge about environment-how it affects the functioning of an organisation.
- To determine the mission, objectives and strategies of a firm and to visualize how the implementation of strategies can take place.
- To find the solutions of problems in real-life business.
- To develop analytical ability to identify threats and opportunities present in the environment.
- To develop the skills of strategic decision making.
- To develop a creative and innovative attitude and to think strategically.
Important links
- Strategy Management- Definition and Processes
- Major factors in Formulating Strategic Objectives
- Scope of Strategic Management
- Strategic Management- Nature, Benefits & Limitations
- Personal Goals- Meaning, How to Achieve Personal Goals
- Mission- Definition, Purpose, Advantages & Disadvantages
- Vision- Definition, Characteristics, Purpose
- Strategy- Meaning, Features, Essence & Importance
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