Advantaes and Disadvantages of Strategic Management

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Introduction

Strategic Management

A set of decisions and actions that result in formulation and implementation of plans designated to achieve company’s objectives (Pearce and Robinson, 2009:3)

Strategic management involves a series of actions/ steps in which the top management analyze the current situation, decide on strategies, put them in action, evaluate and change as desired.

It is concerned with planning and implementation

Strategic management makes organizations to be proactive, rather than reactive. It needs a lot of commitment and if implemented properly, results in a number of advantages. This process is not smooth. There are advantages and disadvantages linked to this process.

Question 1A

Advantage of Strategic Management:
Involvement ensures understanding

Before staff members can adopt any new strategy, they must first understand it. When a new strategy is introduced, people must be active participants. They must understand exactly what is expected of them and what their role is. According to (Robin Speculand, 2009), everyone needs to answer the question” what actions should I take to participate in the new strategy.

Successful implementation needs people to be motivated.
Strategic planning and management is not for top management only. Even though planning is done by top management, everyone in the organization needs to be involved when it comes to implementation.

When Roll Royce rolled out its new strategy, it used strategy storyboards to share the new message across. These boards explained the new strategy and what the staff members was expected to do differently.

75 managers were trained to conduct the briefing and hold at least 4000 presentations around the world. After this effort, staff members were able to understand the strategy and knew exactly what to do to help implement it.

According to (Pearce and Robinson, 2009)” the involvement of employees in strategy formulation improves their understanding of the productivity-reward relationship in every strategic plan and thus, heightens their motivation”.

The top management decides on the strategy to be followed, the middle and lower management has to make sure that the strategy is implemented successfully. For them to take ownership, they have to be fully involved and understand the strategy. You cannot sell an idea that you not sure of.

Even in the contemporary business, amongst stakeholders are the unions who are fighting for involvement. If for instance there’s going to be some restructuring, they need to be part of the process from beginning to end. When they have information, it becomes easier for them to explain to their members. Therefore organizations have to be very careful when it comes to issues of involvement otherwise they might end up with strike actions.

Question1B
Disadvantage of Strategic Management:
Resistance to change

Many organizations suffer during the era of change because people are not embracing it. There are many reasons that could cause management to effect change in strategy. Obviously if the top management chooses to change strategy, change needs to take place across the board to support the new strategy.

Upon implementing the change, management would expect enthusiasm, acceptance and commitment from the employees. According to (Paul Strebel, 1996)”Why employees resist change?” organizations would get breakdown; implementation plans missing their mark and results falling short.

Many employees and middle managers do not see change as something positive; they see it as something disruptive. Management should explain why there is change and why it is imperative.

There has to be alignment between senior management, lower-level managers and employees. In fact, there has to be change of attitude across the board. For people to embrace change, they have to be included. When people feel included, they support the change. For change to be effective, personal compacts...
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