STRATEGIC MANAGEMENT

Meaning
Strategic management is a broader term than strategy. It includes analysis
of organizational environment by top management. Strategic management is a
set of decision and actions that result in the formulation of a strategy and the
plan for implementing and controlling the strategy that is designed to achieve
the objectives of the organization. It integrates strategic planning into a single
process. It is a comprehensive and ongoing management process aimed at
formulating and implementing effective strategies; a way of approaching
business opportunities and challenges.

Definitions

Sharplin defines strategic management as the “formulation and

implementation of plans and carrying out of the activities relating to the matters
which are of vital, pervasive, or continuing importance to total organization.”

According to Glueck, “strategic management is the art and science of

formulating, implementing and evaluating cross functional decisions that enable
an organization to achieve its objectives.”

Features of Strategic Management

Strategic Management plays significant role in modern business scenario.

It involves continuous process of decision making that are vital for survival,
growth and flourish of an organization. The following are the features of
strategic management.

1. Strategic management is a process: Strategic management has emerged

out of management in other areas where the concept of management is
taken as a process for achieving certain objectives of the organization for
which it is brought into existence. .

2. Strategic management focus on external environment: The open

system in which the firms interact with the environment, calls for
strategic decisions to be made in the light of how suppliers, creditors,
customers, competitors and government are likely to react to
environmental changes
3. Strategic management is basically top management function: Since
the environment of the organization is always changing, providing new
opportunities and threats, top management must spend more and more
time on this aspect. Thus, there is a considerable change on the emphasis
of top management functions in the organizations, particularly in large
and complex organisations. The change is from operational management
to strategic management.

4. Strategic issues warrant top management decisions: Strategic

decisions are having far reaching impact on several areas of firms
operations. Hence top management involvement in decisions making is
imperative. These decisions must be made by top management as these
are the pillars of organisation.

5. Strategic issues involve the allocation of large amounts and

resources: By vary nature, strategic issues call for allocation of large
amounts and resource deployment. The strategic issue is one of expansion
or expanding the production capacity, or entering into new market or
modernization to cut cost (technological upgradations).

6. Strategic issues are likely to have impinging impact on the long term
prosperity of firm: The strategic decisions are such that their impact,
good or bad, will be known in the long run. When a company sticks to a
particular strategic option, its competitive image and merits are tied to
that strategy option only.

7. Strategic issues are future oriented: Strategic decision making are

future oriented and has considerable impact on long term prosperity of
the organization.

8. Strategic issues warrant due weightage to the firms’ external

environment: Each business unit is a sub-system that exist in open and
supra system which is otherwise known as environment. A firm as a sub
system has great influence of the environmental forces on it and it has its
own impact on environment.