Truly, business is a high-stakes game (Brandenburger & Nalebuff 1995, p. 57): the wrong strategic move could mean millions of dollars lost, or thousands of jobs jeopardized, or even the bankruptcy of a firm. Strategy setting, to be successful, must consider the organization as a whole and not as an entity made of distinct and independent business units, and must include everyone in the organizational. Strategy is a detailed plan for a business in achieving success. It is the bundle of decisions and activities an organization chooses to achieve its long-term goals; in other words, it is the path it chooses.How does a company make or formulate strategies? Simply, every organization needs to figure out what it wants to achieve, and then how it is going to make it happen, with its products, customers, and operations. The thing is who will figure out what an organization wants to achieve. Traditionally, strategy is an area delegated solely to the CEOs, and much depends on the analysis of data, detailed planning, and to-down command. This structure of strategy formulation is in-lined with Michael Porter's management principles. But the world where Porter formulated his management principles is much more different from the world today, so naturally the way companies formulate strategies would also change.In this paper, I discuss what strategic management is, its potential benefits and limitations, its different elements, and strategic management in practice. Through this I aim to contribute to the existing literature on strategic management and facilitate its understanding.
[...] The then HP Vice President, Executive Leadership and Corporate Functions HR, Jackie Kane, described the strategic management processes used to align around the strategy and realize the full potential of the combined portfolios in a meeting with the Northern California Chapter of Association for Strategic Planning (ASP) (Davidson 2004). Kane emphasized that the key to the strategic management process for the integration of the two companies is culture, and outlined a five-step post-merger management process: cultural diagnostic phase, designed to identify the values of the two companies; a structuring phase where the various business entities within the two companies were combined; a “push down” phase where the new structure and values were communicated to all employees; a resource allocation and implementation phase; and making certain that the organization had the right leadership capabilities to make all of this transition pays (Davidson 2004). [...]
[...] Strategic management presents a way wherein a business organization can best keep abreast with the changes in its operating environment. Through it, companies can assess the changes in heir environment well before others could, and hence, could alter it processes accordingly, and gain a first- mover advantage. References Arthur, W. & McCollum, J ‘Cost of information limits strategic management', Business Forum, vol no.3/4, pp. 19-23. Bennigson, L ‘Hunting for perfect strategy', Strategy & Leadership, vol no pp. 36-37. Brandenburger, A. [...]
[...] Strategic myopia is a situation when managers who are involved in the strategic management fail to perceive the significance of changing external conditions because they are partially blinded by strongly held beliefs. Another limitation of strategic management is the cost of information. Arthur and McCollum acknowledged that economics of information must be taken into account to understand successful strategic management” (1998). It was pointed out that a growing portion of the labor force today handles information rather than goods (Arthur & McCollum 1998). [...]
[...] The nature of strategic management is that it allows a business organization to be more attuned with its environments, as such, the four elements can happen simultaneously. While an organization is implementing it strategies, it can, at the same time, do an environmental scanning. This serves as an evaluation and control on whether the said strategy is still fit with what is going on in the organization's business environment. This environmental scanning might even lead to an opportunity or a threat that the first environmental scanning didn't see. [...]
[...] Hunger and Wheelen, two prominent authors of several strategic management books and related literatures said that: “Strategic management is that set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning, strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control” (1996, p. 3). Although, strategic management, in the olden days, was referred to as business policy, strategic management differs markedly from it. Business policy tends to be intrinsic in its approach as it is concerned with the synchronization of the different functional activities of a corporation, and has a general management orientation (Hunger & Wheelen 1996, p. [...]
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