The correct strategy can simplify the complexity of business equations. When you work on a planned strategy before, you are still more confident and regulate when doing any assignments. It ensures that you can meet your target within the desired time limit.
Before digging sophisticated bricks in it, let’s first understand what is actually by strategic management.
Strategic management is based on analyzing the main initiatives taken by brass over the company on behalf of the owner. Professionals who practice strategic management have their involvement into the resources and problems of internal & external companies. This requires determining the following main aspects related to the company
1. Organizational mission,
3. Objectives, develop policies and plans, usually in terms of projects and programs, designed to achieve these goals, and
4. Resource allocation to implement policies and plans, projects and programs.
The importance of strategic management in business –
• Strategic management helps you identify the potential of each individual in the organization, so, you can help them in improving and issuing the best to benefit the organization. With this, the level of alertness among employees increases ensures the settlement of the objectives or targets that are rapid and effective.
• This determines the long-term performance of the organization by maintaining the check of internal and external elements to influence the growth of the organization.
• It makes you pro in utilizing limited resources with their maximum efficiency and generate maximum gains from them to increase the profitability of your business.
Approaching strategic management –
Approach for strategic management can be classified into the following three main categories –
• In the bottom-up approach, employees submitted proposals to their managers who turned on the best ideas up the stairs. Usually part of the capital budgeting procedure, where, proposals are based on financial benefits. Therefore, the approved proposal based on this management forms a substance of business strategies.
• Top-down approaches are popular and practiced so far. In this case, the company’s top brass, CEO and directors make decisions regarding the direction of growth for the company. Strategies flow down and each employee works together.
• There is a third method of strategy formation which is a collaborative technique. This results in new ideas in the process of utilizing information technology progress. Collaborative management believes in shared goals between management and employees and emphasizes the use of knowledge management systems to share information and create common goals.
The latest trend in strategic management –
At present, two management theories are highly practiced throughout the world
1. Man management theory (Ouchi theory)
2. Reach the advantage
• Z management theory is made with careful analysis of the success of the Japanese organization. These theories are widely practiced in the world everywhere. Z. Ouchi theory is based on seven parameters related to employees, evaluations, responsibilities and control mechanisms, etc. This parameter also determines the differences in the basic principles between Japanese and American companies.
• Achieving excellence is the theory developed by Peter and Waterman depends on the eight basic principles of superior companies, which are pressurized on system values, action-based work, simple structure and lean staff etc.
Strategic management future –
The strategy plays an important role in bringing the organization ahead. Strategic management is a serious concern for companies in an increasingly competitive environment. It expands the horizons of imagination and innovation for an organization and makes it unique with respect to work, service, and performance.