Research indicates that organizations using strategicmanagement concepts are more profitable and successful than those that do not. Having been involved in strategic planning previously but never leading the. The current management is not possible without strategic thinking. A version of this article appeared in the july 1980 issue of harvard. Strategic surprisingly, here there is ready agreement. This activity enables them to establish a method for monitoring progress toward the desired results. What is strategic management, and why is it important. Mba strategic management lecture notes pdf download mba. Strategic planning includes analyzing the opportunities for a business and finding scopes for. David has listed the following benefits that strategic management brings for an organisation. Importance of strategic management in an organization keka. What do you understand by the term strategic management. Strategic management, linking the rigor of formal planning to vigorous operational execution, may prove to be the answer.
Collective set of processes and practices for identifying bene. Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of competitors strategies, increased. Corporate strategy corporate strategy focuses on how to manage resources, risk and return across a firm, as opposed to looking at competitive advantages in business strategy. Strategic management also encourages organizations to look everywhere for new ideas, which is truly the essence of entrepreneurialism. Historically, the principal benefit of strategic management has been to help organizations formulate better strategies through the use of a more systematic, logical, and rational approach to strategic choice financial benefits. These benefits of strategic management are as follow. Benefits of strategic management essay research has revealed that organisations that engage in strategic management generally outperform those that do not the connotation of the ancient greek word strategos, in its various grammatical forms, implies meaning of skilful manoeuvouring leading to achieving a highly crucial position or attaining a desired end. The process immensely helps a business to launch new products or to penetrate new group of target markets. Strategic management tools and techniques and organizational. To better understand how organizations identify projectdriven benefits, as well as how they align those benefits with strategic. Financial benefits of strategic management bizfluent. But far too few organisations have effective benefits realisation management processes in place.
Strategic management helps companies reap various financial benefits, including a better understanding of solvency and improved liquidity procedures. Special thanks is extended to those who participated in the case studies by sharing the details of their strategies. Strategic management is about success and failure, about the ability to plan wars and defeat them. There are many benefits of strategic management and they include tangible financial results and intangible cultural and behavioral aspects. What are the benefits of strategic management answers. Strategic management in the global marketplace, increased risk appetite generally reflects improvements in the economy. Strategic management is a way to transform the existing static plan in a proper systematic process. Take a strategic view of benefits managing project benefits underpins all aspects of strategic success. Mar 09, 2012 following are the benefits of strategic management process which allows the organizations to adopt it for the long term success. And, as pmis current findings show, they are missing an.
Strategic planning in an educational development centre. The opportunities are better identified, prioritize and exploit by the application of strategic management in the organization. Ltasks of strategic management lstrategic management is an ongoing process lwho performs the tasks of strategy lbenefits of managing strategically strategic management the art and science of formulating, implementing, and evaluating crossfunctional decisions that. Strategic management in an organization ensures that goals are set, primary issues are outlined, time and resources are pivoted, functioning is consolidated, internal environment is. The importance of the strategic management process in the. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry. Strategic management advantages and disadvantages wisestep. Dec 15, 2010 strategic management identifies the competitive advantages that can be generated through strengths of the organization and take necessary steps to effectively obtain it. Strategic management is the most exciting of management disciplines. Believe that these benefits of strategic management are enough to encourage people to hire a special team of strategist for the planning of their business. Jan 09, 2015 a great resource to get started with is our free strategic plan template which you can download as a pdf. When deciding between alternative strategic options, management can use the mission as a touchstone or benchmark against which to judge their suitability. Global strategic management offers a clear insight on the effect of globalization in business management and organizations and hence it demands that managers should respond in the same or higher intensity in order to reap in the high benefits that come with it, managers and ceos have to understand that the global phenomenon does not just.
Strategic management involves formulation and implementation of the major goals and plans taken by a companys top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization. Strategic management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. Strategic management identifies the competitive advantages that can be generated through strengths of the organization and take necessary steps to effectively obtain it. Benefits of business strategic management solution cunix.
This article is based on our experiences of developing a strategic plan for the teaching and learning centre in our faculty. Strategy the word strategy has so many meanings itself and all these meanings are useful, important and relevant to the people who. Pdf strategic management and strategic planning process. Besides, the challenge of strategic management also should be aware of so that it can be operated well in the competitive market. An effective strategic management performance can transform an organization, bring wealth to shareholders, or change the structure of an industry. The reason is strategic management helps a business to stay focused on its goals. Benefits of strategic management management study guide.
The 7 benefits of strategic planning strategic management. Benefits of strategic management to organization your. Benefits of strategic management reasons to avoid strategic. Strategic planning definition, steps, and benefits. In fact, many have no benefits management approaches at all. Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of competitors strategies, increased employee productivity, reduced resistance to change and a clearer understanding of performancereward relationships. Strategic planning is the art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives.
Strategic planning tells an organization where to focus its dollars. To achieve all this, strategic management is essential. Advantages of strategic management management guru. According to tapera 2016 19, a strategic plan is a tool. Defining strategic management, planning outline l why strategic management. Strategic management process strategic management process dr i. Strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives. Strategic management can have some immediate changes in the organization. Money is not wasted on a project that might benefit the group for a month or two but is useless next year.
The following mentioned are few pointers that help you identify the relevance of strategic management and its benefits. This chapter on the strategic management and strategic planning process provide an insight on the basic knowledge on what is strategy and strategic management. The work of strategic planning doesnt stop at the strategic plan, but its a start. In order to achieve my goal the importance of strategic management, it. Strategic management meaning and important concepts. Allows identification, prioritisation and exploitation of opportunities. The history is filled with the examples where the strategic management of offensives and counter offensives paved the path for decisive victories. Strategic management is the process of formulating, implementing and evaluating strategies to achieve its organization objectives. Their input, advice, and lessons learned, both successes and failures, have been incorporated into this document so that we may all apply better strategic management processes in our organizations. The advantages and disadvantages of strategic management.
It allows organizations to be proactive rather than reactive. This article discusses some of these benefits and cautions against the lack of strategic planning as that would lead to failure over the longer term. The crucial question will be, does the strategy help us along the road to being the kind of. What is strategic management definition and features. Organization acts proactively rather than reactive to any situation. Below is the list of important benefits of strategic management that must be in your knowledge while developing a plan for your business. The art of strategic management remained primarily associated with the military history. The major benefits of strategic management for businesses include identification, prioritization and exploration of the opportunities.
It allows you to hire talents and develop them for future higher positions in the company. Each organization has a particular goal in their mind and this requires the implementation of brilliant strategies to achieve their goals and missions. Pdf the importance of strategic management to business. Hiring strategic management consultants for your business will endow you several benefits. Strategy in the simple sense of the word is a plan designed to achieve an objective and planning as we all know is the primary function of management that lays down the base for the entire business. Chaneta department of business studies faculty of commerce university of zimbabwe abstract wheelen and hunger 2002 say that strategic management is a set of managerial decisions and actions that determines the longrun performance of an organization. Strategic management involves formulation and implementation of the major goals and plans taken by a companys top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes. There is an objective view about the problems of the management with the application of strategic management concepts. It is an essential management process to strategize and prepare for different odds. Strategic staffing comes with a lot of benefits for your organization. Not only is money not wasted, but neither is the organizations time and energy. It results into financial benefits to the organizations in the.
Mar 11, 2016 these benefits of strategic management are as follow. When benefits are delivered, organizations achieve their desired outcomes. The result of strategic planning process is a strategic plan which is a blue print for the organization as it moves into the future. Lead to better performance the successful strategic management should ensure that the company performs very well and generates profits for its owners.
Jun 06, 2016 strategic management and the role it plays in the accomplishments of firms has been a subject of thorough research and study for an extensive period of time now. Following are the benefits of strategic management process which allows the organizations to adopt it for the long term success. Therefore, given to these questions, the importance of strategic management should be further investigated. Nov 21, 2005 the disadvantages of strategic management. Defining the organizations business and developing a strategic mission as a basis for establishing what the organization does or doesnt do and where its headed. A great resource to get started with is our free strategic plan template which you can download as a pdf.