What Is Strategic Management?

Strategic management is when a company manages its resources to more effectively reach objectives and goals. This type of management requires the company to set concrete objectives, assess the competition, look at how the internal organization is run, identify and analyze strategies, and make sure that the new strategies are incorporating throughout the organization. There are two types of strategic management most commonly seen in the workplace:

• Prescriptive management: This type of management is when the organization lays out how strategies should be developed. This is done before an organizational issue arises and helps prevent issues from occurring due to the strategies already in place.
• Descriptive management: Descriptive management refers to when an organization implements strategies on an as-needed basis, such as when an issue arises.

In most cases, upper management is responsible for developing and implementing strategies across the organization. Flexible organizations often find it much easier to change their current strategies to meet the new strategy, while inflexible companies tend to struggle more with changing the environment of their business. The business culture, organization structure, and abilities and knowledge of employees all affect how well an organization adapts to a new strategy.

There are several benefits that strategic management can offer companies, including:

• Growth: Strategic management can increase performance and productivity in the workplace as well as streamline processes, all of which contribute to the sustainable growth of the organization.
• Goal achievement: Implementing strategic management makes it easier to achieve goals by incorporating a clear and concise process in which these goals can be met.
• A leg up over the competition: Using strategic management in the workplace provides a leg up over the competition thanks to the proactive nature it fosters. When a company is constantly proactive, it is also constantly aware of the changing market and able to quickly adapt to meet the market’s needs.
• Proactive results: Using strategic management means a company is constantly thinking ahead to prepare for potential challenges and industry changes. By taking a proactive approach, companies are better able to face these challenges successfully.
• A united organization: This type of management requires constant communication and that everyone is working toward a common goal. This means that the organization as a whole is on the same page and is more likely to achieve goals as a result.

Incorporating strategic management into an organization requires the company to devise a strategy statement that clearly outlines the long-term goals, procedures, and policies of the organization. This statement should include:

• Intent: This refers to the company’s purpose as to why it is in business and why it should continue to be in business as well as what the organization needs to achieve its goals.
• Mission statement: Many strategy statements also include a mission statement, or how the company plans to deliver to its stakeholders. The mission statement should be clear, unique, attainable, and credible.
• Vision: A vision statement should also be included in the strategy statement. A vision statement identifies where a company wishes to be in the future in order to best meet the needs of its stakeholders.
• Objectives and goals: Specific, precise, and measurable goals should also be included in the strategy statement to help keep the organization on track.

There are five steps involved in the strategic management process. These steps include:

1. Setting goals: The first step in strategic management is to get clear on the organization’s mission and overall goals and objectives. These goals should include both short-term and long-term objectives as well as what it will take to accomplish them. There should also be a clear understanding as to what employees and managers will be needed to implement each task required to achieve the goals.
2. Analysis: Once the organization’s goals have been clearly established, it’s now time to evaluate the current procedures and processes in place and how those need to change to accomplish the new goals. Consider what has been working and what is no longer working for the organization. This stage should involve gathering input from stakeholders, upper management, and employees who are directly involved in the processes being analyzed. There are several tools that can be used during this stage, including the SWOT (strengths, weaknesses, opportunities, and threats) analysis.
3. Formulation: Next, you’ll need to determine a strategy to acquire any necessary resources needed to accomplish the goals set in the first step. Formulating a strategy to acquire these goals should be prioritized and worked on until all resources are available for use by the organization with the intent of accomplishing a goal.
4. Implementation: Once resources have been attained, it’s now time to implement the strategy to propel the organization towards its goals. This step in the strategic management process requires all employees and other members of the organization to be on the same page and understand the processes that will be put in place. They should also fully understand their direct role in the strategy to achieve a common goal.
5. Control and evaluation: After the strategy has been in place for a set period of time, you should regularly evaluate how well the strategy is working, how far along the organization is towards its goals, and what’s working and what isn’t. If there are certain factors of the strategy that are not working, these will need to be assessed and changed to ensure the processes are as effective and efficient as possible. Corrective actions are a common component of strategic management, and regular assessments ensure that the organization knows when to best implement them.