How Is Strategic Management Defined In The Text And What Are ✓ Solved
How is strategic management defined in the text and what are
strategic management is defined in the text and what are the four key attributes?
Understanding Strategic Management
Strategic management is a comprehensive approach to formulating and implementing strategies that enable an organization to align its mission, vision, and objectives with its resources and external environment. It involves the assessment of internal and external factors that can impact an organization's success and employs systematic processes to achieve organizational goals.
Definition of Strategic Management
According to Hill and Jones (2012), strategic management is defined as the "set of managerial decisions and actions that determine the long-run performance of a corporation" (p. 4). This definition emphasizes how strategic management encompasses critical decision-making processes at the organizational level that ultimately shape the direction and viability of a business. The authors further clarify that for effective strategic management, an organization must consider various internal capabilities and external environmental factors.
Four Key Attributes of Strategic Management
The study and practice of strategic management revolve around four key attributes that characterize effective strategic management:
- Long-term orientation: Strategic management is inherently future-focused. Organizations must evaluate their long-term goals and the feasible paths to achieve them while anticipating changes in market dynamics and competitive landscapes (Dess et al., 2019).
- Integrated approach: Strategic management integrates actions across different levels of the organization, ensuring that various departments and units align with the overall strategic vision. It requires coordination among marketing, operations, finance, and other departments to support collective objectives effectively (Wit & Meyer, 2010).
- Proactive decision-making: Effective strategic management involves anticipating future challenges and opportunities rather than merely reacting to them. This proactive approach promotes agility and responsiveness, enabling organizations to adapt to changes in their networks and external environments (Mintzberg et al., 2009).
- Resource allocation: A crucial element of strategic management is the optimal allocation of resources. Organizations must carefully assess and configure their resources—financial, human, and technological— to fortify their strategic positioning and execute their plans successfully (Barney, 1997).
Importance of Strategic Management
The significance of strategic management cannot be overstated in today’s competitive business environment. Organizations that engage in strategic management demonstrate superior performance compared to those that do not. Research indicates that businesses that successfully implement strategic management practices are more capable of achieving sustainable competitive advantages and long-term success (Hoskisson et al., 2011).
Moreover, effective strategic management fosters a clearer understanding of the market and competitive dynamics, enabling companies to identify opportunities for innovation and growth. This strategic insight equips organizations with the knowledge required to mitigate potential threats and harness advantages, ultimately redefining their position in the marketplace (Prahalad & Hamel, 1990).
Conclusion
In conclusion, strategic management is a vital process that encompasses a defined set of managerial actions aimed at achieving long-term organizational success. By focusing on long-term orientation, integrating various functions, promoting proactive decision-making, and effectively allocating resources, organizations can navigate the complex dynamics of the business environment. The application of strategic management principles ultimately leads to sustained competitive advantage and improved organizational performance.
References
- Barney, J. (1997). Gaining and Sustaining Competitive Advantage. Addison-Wesley.
- -dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2019). Strategic Management: Creating Competitive Advantages. McGraw-Hill Education.
- Hill, C. W. L., & Jones, G. R. (2012). Strategic Management Theory: An Integrated Approach. Houghton Mifflin.
- Hoskisson, R. E., Edelman, L. F., & Kinder, D. (2011). The Role of Dynamic Capabilities in Creating an Advantage in the Dynamic Environment. Strategic Entrepreneurship Journal, 6(3), 278-298.
- Mintzberg, H., Ahlstrand, B., & Lampel, J. (2009). Strategic Safari: A Guided Tour Through The Wilds of Strategic Management. Free Press.
- Prahalad, C. K., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review, 68(3), 79-91.
- Wit, B., & Meyer, R. (2010). Strategy: Process, Content, Context. Cengage Learning.