What is strategic management?

What is strategic management?

It should be all about implementing the corporate strategy.

Where we are in the strategic planning process?

After deciding the strategies, we move into the final stage of executing the strategic plan. Strategic management is monitoring results of implementing strategy. It also means taking action indicated by the results. This means reconnecting with ongoing management of the entity, as well as the new strategic projects.

With the strategies chosen and approved by the highest levels of the organization, the planning team has almost completed their task. They still have tasks to carry out - they must -

  • evaluate the strategies
  • put them into action
  • monitor them.

Monitoring is a vital part of strategic planning and is what leads to strategic management.

It permits the team to follow the progress of their strategies. It also provides a mechanism for alerting them when the strategies require revision. Monitoring also tells them when to restart the entire corporate planning process again. This should not be for several years. The organization continuously assesses the confidence in its current strategies, ready to spring into action on the planning process as required.

What is strategic management?
Getting plans to work.

The monitoring stage is not just the final step in the corporate strategic planning process. It is also the first step to ‘strategic management’.

A team of executives continually act as corporate strategic planners. They constantly scan the environment for new trends and events. They keep thinking about the long-term future direction for their organization.

What is strategic management? It is a management approach with these key elements -

  • A system for monitoring internal operations of the organization and its external environment. I do not mean an occasional glance, or even occasional ‘review’. I have in mind a system of scanning the items previously agreed through the planning process as having strategic significance.
  • A group of skilled people ‘on watch’, people who have been properly briefed about what to look for. Their accountability would include reporting any evidence that might signal a new strategic trend or event.
  • It is essential that that this scanning process should link to a strategic planning system such as the one described at this website. It is not much use knowing that some momentous event may happen next year if the enterprise is ill equipped to put together a strategic response to it.
  • Therefore, the enterprise should organize itself to be able to act strategically on the new strategy. This suggests that there must be a small management team at the top, obviously including the chief executive, whose job explicitly involves making strategic decisions. In essence, these top executives, whether they have day-to-day operational roles covering parts of the organization or not, behave as the strategic planning team for the corporate whole.

Elements of a definition of strategic management

Many managers, academics, and business commentators would agree on these five key elements -

  • the major courses of action pursued by general managers
  • on behalf of organizational beneficiaries such as shareholders
  • involving resource allocation
  • to achieve acceptable levels of performance of organizations
  • in their external environments.

For a study of these elements see - What Is Strategic Management, Really? Inductive Derivation Of A Consensus Definition Of The Field, by Rajiv Nag, Donald C. Hambrick, and Ming-Jer Chen.

Strategic management consists of an integrated system. The organization systematically and monitors its operations. It also watches environmental trends. It responds to trends and events quickly — even, as may be required, while they are still emerging.

Return from What is Strategic Management to Strategic Management Process.

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Some resources on strategic management -

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