What Is Strategic Management? Understanding as a Manager

A leader standing up talking to four people around a table on strategic management.

Table of Contents

Strategic management is a way to meet goals and objectives for organizations. A strategic manager oversees the process of creating plans and devising strategies that will allow an organization to meet its benchmark goals, but it can be difficult for inflexible companies to make changes. Five stages of the strategic management process are brainstorming, analysis, strategy design, implementation, and evaluation. There are also different types of strategies that may be used by managers in order to achieve desired outcomes.

Why Is Strategic Management Important

In the business world, strategic management is very important because it allows a company to analyze different areas for improvements. In some cases, they can follow an analytic process where you identify potential threats and opportunities, or simply create and enforce general guidelines by your organization for improvements.

You may choose from either a prescriptive model which outlines strategies that need development and execution or a descriptive approach where this strategy will then describe how one could develop these ideas themselves while still adhering to certain principles of operating within their own structure efficiently.

Examples of Strategic Management

Imagine a large company that wants to achieve ambitious online sales rates. To meet these goals, the company needs to develop an effective strategy and communicate its plan across various departments in order for every employee to be on board with it. If executed correctly, this should integrate seamlessly into both employees’ lives along with your own personal life because you’ll have all of the help you need when tackling more obstacles like those seen during difficult economic times.

How Does Strategic Management Work

Strategic management is a complicated process that entails establishing goals for the business, analyzing competitive actions, and reviewing current strategies. It also asks us to evaluate if these strategies are being implemented across the board or whether they’re just applicable in certain departments of our organization.

Strategic management can be split into two kinds: descriptive or prescriptive. Prescriptive strategy means developing plans on how we’ll address an issue before it happens. Meanwhile, descriptive strategy means implementing a plan when needed (though both approaches use similar methods, namely management practices and theory).

Upper management is accountable for executing and handling strategies, goals, ideas, or organizational problems that can appear from all members of the business. While most companies hire strategists whose job it is to plan and think strategically to enhance company function—all employees and stakeholders are encouraged to offer their opinion and feedback regarding how they feel on operations so that they can together progress as a whole team.

Types of Strategic Management

Strategic management can be tackled in various ways. Next here, we will look at well-known types of strategic management:

Balanced Scorecard

This aids you in finding which parts of your business should have improvements by summarizing the performance evaluation process into four segments. This method can provide timely, relevant feedback on all aspects of a company’s success or shortcomings. These four areas are:

  • Growth and learning
  • Customer perspectives
  • Financial data
  • Business processes

SWOT Analysis

A SWOT analysis is a strategic management tool that helps you identify your strengths, weaknesses, and opportunities for improvement. It also identifies the threats to success in order of importance so as not to be caught off guard by any one particular issue or event;  This type can help companies make informed decisions about their future direction based on an objective assessment form.

Five Stages of Strategic Management

Every day in the world of business, there are leaders using their skills and knowledge to ensure that organizations succeed. For this reason, it is imperative for managers to be knowledgeable about strategic management practices so they can guide an organization through change and help them achieve desired results.

To do this successfully, a manager must execute five phases:

  • assessing the company’s current direction;
  • identifying strengths/weaknesses both inside & outside of your company;
  • formulating action plans from these findings
  • executing those strategies which will lead you back on course or propel you toward success
  • evaluating regularly and changing as required

Communication and data analysis are not the only factors to consider when implementing a strategic plan. The organization’s culture should also be taken into consideration because it can affect how things go for your strategic management process as well. When there is misalignment between these two elements of an organizational structure, you will have trouble with every other part that falls under its umbrella — from communication all the way down to what goes on in individual departments or business units across different divisions. These problems arise due to a lack of cross-functional oversight before making decisions which could potentially conflict with long-term goals set forth by higher levels within the company hierarchy (such as executives).

Advantages of Strategic Management

There are two types of benefits that come with strategic management. The first is financial, which includes the ability to maintain a positive outlook on business and improving efficiency in operational processes such as marketing strategies or production costs. Nonfinancial benefits include focusing employees’ efforts toward achieving goals through specific objectives while remaining connected at all times via social media platforms like Twitter where communication between departments can be managed more easily than before for quick response time when faced with an emergency situation.

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