Importance of Strategic Management
At alignment.ie we believe all companies should understand and practice ‘Strategic Management’. During last century organizations focused on long-term planning. Long-term planning supposed that external and internal environment will remain stable for long period of time and thus they made plans for long duration. Today it is clear to the managers and entrepreneur’s that environment can change at any point of time and their plans should follow a strategy that includes contingency planning too.
What is a Strategy?
A strategy can be defined as a step-by-step plan to achieve a goal.
Strategic management is an ongoing process of formulating strategies for the organization that bring profit to the organization and create harmony between organization and its environment. It lists the strengths that the organization already possess for the achievement of its objectives; weaknesses that hinder in goals accomplishment; opportunities and markets that can be exploited in favor; and threats that are present in external and internal environment: this is in short called as SWOT analysis.
While making decisions about the strategy the organization analyses what are the distinctive competencies the company already possesses. Distinctive competency can be a valuable asset for the company. Distinctive competencies make the process of strategy formulation much more directional and successful.
Importance of Strategic Management in Organizations:
A well-formulated strategy can bring various benefits to the organization in present as well as in future.
- Strategic management takes into account the future and anticipates for it.
- A strategy is made on rational and logical manner, thus its efficiency and its success are ensured.
- Strategic management reduces frustration because it has been planned in such a way that it follows a procedure.
- It brings growth in the organization because it seeks opportunities.
- With strategic management organizations can avoid helter & skelter and they can work directionally.
- Strategic management also adds to the reputation of the organization because of consistency that results from organizations success.
- Often companies draw to a close because of lack of proper strategy to run it. With strategic management companies can foresee the events in future and that’s why they can remain stable in the market.
- Strategic management looks at the threats present in the external environment and thus companies can either work to get rid of them or else neutralizes the threats in such a way that they become an opportunity for their success.
- Strategic management focuses on proactive approach which enables organization to grasp every opportunity that is available in the market.