Because of projects' limited scope and short execution time, senior managers can use them to analyze operational issues, solve problems and explore new possibilities without disrupting tactical operations. Strategic management operates on long-term plans and applies information gained from projects to set the organization's future priorities. As part of the strategic management process, projects may focus on both the external customer environment and internal activities required to support better alignment of operations and strategic objectives.
Research and Development
Many large companies allocate a portion of their profit or operating capital for research and development – R&D -- projects. Companies select R&D projects based on an assessment of potential revenue or their desire to acquire patents and intellectual property that support strategic initiatives. The selection of R&D projects helps position an organization to test new product ideas and find ways to solve existing quality challenges, reduce defects or improve performance.
Prototype solutions developed on projects may offer a solution to customer problems or demonstrate potential products that can become part of marketing campaigns to increase an organization’s customer base. The business intelligence function of strategic management identifies future business areas for consideration. Using information on the needs of current customers or a marketplace analysis, the business analyst suggests demonstration projects to enhance the company’s competitive position.
Identifying and managing risks to business operations fall within the purview of strategic management. Areas of potential risk assessed by management include problems with customer satisfaction, product failures and competition. Not all risks can be eliminated. However, using projects to assess the business impact of risk conditions allows strategic managers to choose which risks they should address pre-emptively and which ones they can either monitor or ignore.
Strategic management continuously seeks to identify and mentor promising employees for future roles in management. By giving aspiring managers or lead technologists the opportunity to manage a project, senior managers have the opportunity to assess their potential for advancement under realistic management conditions. The role of project manager offers many opportunities for training in key skills that can later apply to operational or senior management positions, such as creating a work breakdown, assigning and monitor staff performance and managing a project budget.
- Photo Credit Jupiterimages/Brand X Pictures/Getty Images
Role of the Board of Directors in Strategic Management
A Board of Directors (BOD) forms the highest level of authority in the governance of a company and includes elected individuals who...
Explanation of the Management Science Approach
The scientific method works as an objective, fact-based method for making new discoveries and learning new ways of doing things. Management science...
The Role of HRM in Strategic Management
Every day, scores of professionals contribute their intellectual wealth to improving companies' performance, paying attention to strategy management and human resources management,...
Strategic Vs. Tactical Project Management
Project management connects both strategic and tactical elements. The two components of the strategic planning process are integrally connected, yet different in...
The Roles of a Project Team
Managers and groups of people serve different roles on project teams. Some of these roles are more leadership-oriented, while others are work-intensive....
Strategic Management & Project Management Differences
A business would not succeed without both strategic management and project management. Both types of management tools will help a company to...
The Role of Strategic Management Accounting
Strategic management accounting is usually done in larger companies, and it involves an accountant taking information and trying to analyze the impact...