Relevance of Strategic Management

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If you're going to become a new manager in a public or private agency, there is a good chance that you will be asked to assist in strategic management. You'll be charged with getting employees and resources coordinated so that your business unit achieves its assigned goals. Appreciate the benefits of the strategic management process so that you can make the right operational decisions to facilitate success.

Setting Direction

  • An organization needs direction so that it has a plan for arranging its core activities. If you don't set goals through a strategic management process, your organization operates in a reactive mode. Use strategic management planning principles to set the course for the company and to spend business resources in ways that will help you achieve this course. Focusing on your direction also helps to avoid wasting resources along the way.

Situational Analysis

  • Strategic management is based on many concepts, and an important concept in this management style is called situational analysis. You want the organization you work for to evaluate its current position in the business market. And, you want the organization to define where it wants to be, in one year and in five years, such as acquiring a larger share of the market. This type of situational analysis and the strategic planning that follows it encourages managers to direct resources so that the desired business position is attained in a specific time frame.

Strategic Alliances

  • If you have a goal for the organization you work for to grow rapidly, then you look around for strategic market alliances, which is related to situational analysis. For example, private companies can use the acquisition of smaller companies to expand their market base and then introduce the products of those companies in their existing stores. Tie the growth of the organization to the strategic plan by stating precisely what growth will look like so everyone in the organization can visualize it.

Innovation

  • Strategic management also encourages organizations to look everywhere for new ideas, which is truly the essence of entrepreneurial-ism. For example, a U.S. chain store that expands into global markets can share ideas that work for managing a retail operation in another country with store managers in its home country. Managers are encouraged to test foreign ideas in their home market. This retailer realizes that goals can be achieved, even surpassed, by putting ideas into the hands of people who can use them. The entrepreneurial testing of new ideas is something that you want to be a part of in a strategically-managed company.

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