Strategy, as we have seen, can have many definitions, but is generally taken as a plan of action designed to achieve a long-term or overall business aim. We have now also considered strategy planning.
It therefore follows that the plan of action will need to be appropriately managed, so strategic management is seen as the identification, selection and implementation of an organisation’s long-term goals and objectives.
Let’s start this section with yet another definition – this time one of many available for strategic management.
Jauch and Glueck define strategic management as:
… the stream of decisions and actions which leads to the development of an effective strategy or strategies to achieve corporate objectives.
(Jauch and Glueck 1988)
Strategic management is therefore seen as a continuous process of strategic analysis, strategy creation, implementation and monitoring, used by organisations with the purpose to achieve and maintain a competitive business advantage.
Effective strategic management is seen as having three stages:
- Strategy formulation
- Strategy implementation
- Evaluation and control
These are explained as follows:
|Stage of strategic management||Explanation|
|Strategy formulation||Seen as the process of selecting the most appropriate course of action for the realisation of organisational goals and objectives and achieving the organisational vision.|
|Strategy implementation||Seen as the conversion of the selected strategy into action so as to achieve company goals and objectives. Viewed as the way in which an organisation needs to plan and develop its organisational culture, structures, and control systems in order to deliver the performance needed to realise a competitive business advantage.|
|Evaluation and control||Seen as the final phase in strategic management and is used to measure the overall effectiveness of the plan once it’s in operation and to ensure the anticipated outcomes are delivered.|
You have been asked to lead your construction organisation’s strategic plan exercise but have to apply for the role. As part of the selection process presentation, you need to identify the three main advantages of strategic management and the three main disadvantages.
Remember to share your answers in the comments.
To assist you in this, you may wish to read the following research paper: The importance of strategic management to business organizations (Tapera 2014).
Jauch, L. R., and Glueck, W. F. (1988) Business Policy and Strategic Management. 5th edn. London: McGraw-Hill
Jurevicius, O. (2013) ‘Strategic Management and Strategic Planning’. Strategic Management Insight. available from https://www.strategicmanagementinsight.com/topics/strategic-management-planning.html [27 September 2019]
Tapera, J. (2014) ‘The Importance of Strategic Management to Business Organisations’. Research Journal of Social Science and Management [online] 3 (11), 122-131. available from https://www.theinternationaljournal.org/ojs/index.php?journal=tij&page=article&op=view&path%5B%5D=2700&path%5B%5D=pdf [7 November 2019]
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