Strategic management analyzes the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in external environments. It entails specifying the organisation’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Recent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders.
"Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment." Strategic Management can also be defined as "the identification of the purpose of the organisation and the plans and actions to achieve the purpose. It is that set of managerial decisions and actions that determine the long term performance of a business enterprise. It involves formulating and implementing strategies that will help in aligning the organisation and its environment to achieve organisational goals."
The term strategy has been defined in a variety of ways. Early descriptions ranged from strategies as integrated decisions, actions, or plans designed to set and achieve organizational goals to strategy as simply the outcome of the strategy formulation process. Strategy is a series of goal-directed decisions and actions that match an organization's skills and resources with the opportunities and threats in its environment. First of all, strategy involves an organization's goals. The chosen strategy should help an organization achieve its goals. But formulating and deciding a goal-directed strategy isn't enough. Strategy also involves goal directed actions the activities to implement the strategy. In other words, an organization's strategy involves not only what it wants to do, but how it's going to do it. Also, a single, simple action is not a strategy; strategy is a series of related decisions and actions throughout the various levels and departments or divisions of the organization. The organization's strategies should be designed so they take into account its key internal strengths and external opportunities and threats. This matching idea is important to the concept of strategy and strategic management.
Strategic management involves those decisions and actions in which organizational members analyze the current situation; develop appropriate strategies; put those strategies into action; and evaluate, modify, or change those strategies as indeed. It entails all of the basic managerial functions: planning, organizing, implementing, and controlling. The organization's strategies must be planned or formulated, organized, and put into effect, and controlled. In other words, we can describe the basic activities of strategic management as strategy formulation, strategy implementation, and strategy evaluation.
Four aspect of strategic management set it apart. Strategic management is, by nature, interdisciplinary. It is not like other types of management that focus on specific areas such as human resources or operations. Next, strategic management is characterized by its emphasis on the interactions of the organization with its external environment, that is, strategic...