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Contribution of strategic management to organizational performance

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  1. Introduction
  2. Strategic management
  3. Three key principles of Michael Porter
  4. Elements of the strategic management process
  5. A look into business pressures and organizational responses
  6. Benefits of strategic management process
    1. Financial benefits
    2. Non-financial benefits
  7. Limitations of strategic management
  8. Approaches to strategic management
  9. Strategic management in practice
  10. Conclusion
  11. Bibliography

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. [...]

[...] Elements of the Strategic Management Process Source: Hunger & Wheelen 1996, p Environmental Scanning. Environmental scanning is composed of the external and internal analyses. External analysis is where the external business environment of an organization is analyzed in terms of the threats and opportunities it presents to the said organization. These form part of the Opportunities and Threats in the S.W.O.T. analysis. Environmental scanning is important because the factors making up a business' environment presents pressures that the organization needs to respond to, otherwise it risks becoming obsolete. [...]

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