Strategic Management Basics Essay Example | Topics and Well Written Essays - 3000 words

Strategic Management Basics - Essay Example This is the prime reason why strategic management today is being adopted into all the large organisations and at all levels. Strategic management is not just a concept, but it is a "process that can be utilized throughout all organisational levels and can be integrated into nearly every job" (Buhler, March 1994). Buhler (March 1994) notes that seeing the "big picture" is at the "heart of strategic management". She indicated that when "an organisation is viewed as an integrated and inter-related whole" managers can easily identify what needs to be done. Moreover, the external environment should always be considered in analysing the organisation. Combining the external focus with an internal analysis of the organisation would be beneficial identifying what went wrong and what are the factors that need to be considered in order not to repeat the past mistakes of the organisation. Realizing the essence of this concept, Kinicki and Williams (2003) deemed that "strategic management is a process that involves managers from all parts of the organisation in the formulation and the implementation of strategies and strategic goals". They added that their definition does not connote that managers at the top can easily dictate ideas to be followed by subordinates under their volition. Indeed, precisely because middle managers are the ones who will be asked to understand and implement the strategies, they able should also help to formulate them. Also, with that definition, we can draw the three key elements of strategic management. These are formulation, implementation and evaluation. Formulation The formulation part is considered to be the planning stage of management. Although most entrepreneurs do some form of planning for their ventures, it often tends to be informal and unsystematic (Naffziger & Kuratko, October 1991). The actual need for systematic planning will vary with the nature, size, and structure of the business. In other words, a small two-person operation may successfully use informal planning because little complexity is involved. But an emerging venture that is rapidly expanding with constantly increasing personnel size and market operations will need to formalise its planning because a great deal of complexity exists. It is also possible that an entrepreneur's planning will need to shift from an informal to a formal systematic style for other reasons. First is the degree of uncertainty with which the venture is attempting to become established and to grow. With greater levels of uncertainty, entrepreneurs have a stronger need to deal with the challenges facing their venture, and a more formal planning effort can help them to do this. Second, the strength of the competition (in both numbers and quality of competitors) will add to the importance of more systematic planning in order for a new venture to monitor its operations and objectives more closely (Chaganti et al., Spring 1989). Finally, the amount and type of experience the entrepreneur has may be a factor in deciding the extent of formal planning. A lack of adequate experience, either technological or business, may constrain the entrepreneur's understanding and thus necessitate formal planning to help determine future paths for the organisati on. To integrate strategic management, managers should take into account the concept of "strategic planning". As defined, strategic planning is the