Strategic management is an essential task of the highest levels of business leadership. It is integral to combining the many facets of business management into an overarching strategy to sustain competitive advantages in volatile global markets. Directing an organization's strategic management is generally the purview of upper-level management, which includes senior staff and C-suite executives.
The University of Northern Colorado (UNC) online Master of Business Administration (MBA) incorporates all core subjects of study into a capstone course in strategic management. Building on the program's curricula, this capstone experience allows students to implement what they've learned into the real world. This preparation provides graduates with the knowledge and skills needed to lead organizations through well-devised and executed strategy.
How Is Strategic Management Defined?
As strategic management is a combination of many nuanced managerial processes, it can be defined in numerous ways. Some definitions focus on the purposes of strategic management, namely:
- To sustain and grow an organization's competitive advantage.
- To proactively help guide an organization through environmental and organizational change.
Other definitions focus on the actual component processes involved in strategic management. The Association for Project Management defines strategic management as simply:
"… the identification, selection and implementation of an organization's long-term goals and objectives."
In an article on strategic management for the International Journal of Scientific and Research Publications, H.K.S. Hanasini Athapaththu writes: "Strategic management is a collection of ongoing activities of strategic analysis, strategy creation, implementation and monitoring."
Athapaththu further states that strategic management aligns an organization's resources with its vision, mission and strategy.
What Are the Core Components of Strategic Management?
There is no single design for effective strategic management, because it is, by definition, developed based on an organization's unique environment and goals. But some common elements and processes at the most basic level are as follows:
The Analysis Stage: The organization, including all internal and external environmental factors, is analyzed top down. This means stating clearly what the organization's mission and vision are. The mission should spell out the broader criteria upon which strategies can be evaluated, and they must support the long-range elements of the organization's vision.
This process also consists of analyzing the organization's strengths and weaknesses, both intrinsically and as compared to competitors. A common framework is the SWOT analysis:
- Strengths: What the organization excels at compared to the competition.
- Weaknesses: What the organization needs to do better.
- Opportunities: What resources the organization can tap to increase competitive advantage and market share.
- Threats: What competitors' advantages pose a threat to the organization's market share and potential.
Strategizing and Planning: Based on careful analysis, along with clarity of mission and vision, strategic management enters the planning phase — setting long-term goals that support the organizational vision and desired outcomes. These could be any combination of desired outcomes such as growth, revenue increases, market expansion, brand awareness, public relations improvement, etc. Short-term goals are set with desired outcomes or benchmarks. And operational strategies are devised to achieve these short- and long-term goals.
Implementation: This is the execution phase where plans are put into action throughout an organization's structure and functions.
Evaluation and Monitoring: As with the scientific method, one of the most important aspects of strategic management is constant monitoring and assessment of results. The efficacy of executed strategy is evaluated according to measures set forth by goals and desired outcomes. And, as a cyclic or iterative process, effective strategic management continuously learns from this phase. These findings are integrated into a corrected strategy. Then the adjustments then further evaluated.
The master of strategic management can accurately analyze an organization, taking into account various stakeholders and environmental factors, internal and external. With knowledge gained from the integration of various aspects of business management and the specific application of strategic management, graduates of UNC's online MBA program stand uniquely equipped to successfully manage organizations of all types.
Learn more about UNC's online MBA programs.
Sources:Business Jargons: Strategic Management
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