STRATEGIC MANAGEMENT Essay Example

  • Category:
    Management
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    1
  • Words:
    590

Strategic Management

College:

Strategic Management

Organizations with effective strategies succeed in the market. It provides overall direction the firm should follow when executing their tasks (Hill & Gareth, 2012). Besides, it contributes to effective resource utilization thus enhancing organizational productivity. The purpose of this paper is to answer the strategic management question.

What is the difference between strategy and strategic management?

Strategic management is the process that entails analysis of various functions across different departments and making an appropriate strategy with the aim of improving organizational performance. It is the process of analyzing the internal and external business environment to understand its dynamics and identify the business opportunities (Kvint, 2009). After understanding the environment, the next decision is to think about the actions plans to take to exploit the existing opportunities. Finally, the management develops a plan how to implement the actions plans it has formulated. Therefore, strategic management is the process of developing long term plans for an organization with the aim of achieving the organizational goals and objectives.

On the other hand, a strategy refers to the technique that a business uses to define its core existence and the procedure it follows to execute its tasks. It incorporates the vision and mission statement as well as organizational values (Zhexembayeva, 2014). For instance, an organization can have customer-oriented strategy where its focus is based on the customers. Therefore, a strategy is the long term plan that provides direction to the organization.

Lack of business strategy

It is not possible for an organization to survive without a business strategy. It is because the business strategy provides clear direction to an organization so that stakeholders understand what they want to achieve. The first reason a business cannot survive without a strategy is that it lacks business objectives. Companies formulate business objectives based on the overall strategy (Hill & Gareth, 2012). Therefore, without a clear strategy it is not possible to set goals and targets to achieve at the long run. Therefore, the business will be in operation but without knowing its aim and this can eventually lead to losses.

The other reason is that the business will misuse its resources and will not achieve its corporate vision. If an organization does not have clear strategy, it will not budget for its resources appropriately. For instance, budgeting is not possible because there is no clear strategy that guides the company in its operations. As a result, the company cannot achieve its desired goals and objectives because of the misappropriation of resources. It also encourages embezzlement of funds. Finally, lack of business strategy hinders communication in the organization (Zhexembayeva, 2014). Communication is an important function that influences the success of an organization. As a result, the stakeholders do not understand the aim of the company thus they cannot invest their resources in the company. For instance, investors cannot invest in the business since they do not think they can get value for their investments.

Conclusion

Strategic management is an essential function that provides clear direction to an organization. Strategic management is the process of developing long term goals and objectives that provide clear direction it should take. Without a business strategy, an organization will not survive because of poor communication and misuse of resources.

References

Hill, C & Gareth R. J. (2012). Strategic Management Theory: An Integrated Approach, Cengage Learning.

Kvint, V. (2009). The Global Emerging Market: Strategic Management and Economics. London: Routeledge.

Zhexembayeva, N. (2014). Overfished Ocean Strategy: Powering Up Innovation for a Resource- Depleted World. San Francisco, CA: Berret-Koehler Publishers.