Strategic management

Strategic management tools

In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization operates.[1][2][3][4] Strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans.[5] Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics.[6] Strategic management is not static in nature; the models can include a feedback loop to monitor execution and to inform the next round of planning.[7][8][9]

Michael Porter identifies three principles underlying strategy:[10]

  • creating a "unique and valuable [market] position"
  • making trade-offs by choosing "what not to do"
  • creating "fit" by aligning company activities with one another to support the chosen strategy

Corporate strategy involves answering a key question from a portfolio perspective: "What business should we be in?" Business strategy involves answering the question: "How shall we compete in this business?"[11][12] Alternatively, corporate strategy is strategic management of a corporation (a particular legal structure of a business); business strategy is the strategic management of a business.

Management theory and practice often make a distinction between strategic management and operational management, where operational management is concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization's strategy.[citation needed]

  1. ^ Nag, R.; Hambrick, D. C.; Chen, M.-J (2007). "What is strategic management, really? Inductive derivation of a consensus definition of the field". Strategic Management Journal. 28 (9): 935–955. CiteSeerX 10.1.1.491.7592. doi:10.1002/smj.615.qn|date=June 2018
  2. ^ Alkhafaji, Abbass F. (2003). Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment. New York: Routledge (published 2013). ISBN 9781135186357. Retrieved 2018-06-17. Strategic management is the process of assessing the corporation and its environment in order to meet the firm's long-term objectives of adapting and adjusting to its environment through manipulation of opportunities and reduction of threats.A corporation-oriented view
  3. ^ Courtney, Roger (2002). Strategic Management for Voluntary Nonprofit Organizations. Routledge studies in the management of voluntary and non-profit organizations. Vol. 5. London: Psychology Press. p. 8. ISBN 9780415250238. Retrieved 2018-06-17. [...] 'Strategic Management' as 'the process of strategic change' (Bowman and Asche 1987) or as 'the process of making and implementing strategic decisions', 'strategic decisions' being those 'that determine the overall direction of an enterprise and its ultimate viability in light of the ... changes that may occur in its ... environments' (Quinn 1980).
  4. ^ Pfeffer, Jeffrey 1946- (2009). The external control of organizations : a resource dependence perspective. Stanford Business Books. ISBN 978-0-8047-4789-9. OCLC 551900182.{{cite book}}: CS1 maint: numeric names: authors list (link)
  5. ^ A Simple Approach to Strategic Management A_Simple_Approach_to_Strategic_Management A Simple Approach to Strategic Management
  6. ^ Cite error: The named reference Ghemawat1 was invoked but never defined (see the help page).
  7. ^ Hill, Charles W. L.; Jones, Gareth R. (2012). Strategic Management: An Integrated Approach (10 ed.). Mason, Ohio: Cengage Learning. p. 21. ISBN 9781111825843. Retrieved 2018-06-17. The feedback loop [...] indicates that strategic planning is ongoing; it never ends. Once a strategy has been implemented, its execution must be monitored [...]. This information and knowledge is returned to the corporate level through feedback loops, and becomes the input for the next round of strategy formulation and implementation.
  8. ^ (Lamb, 1984:ix)
  9. ^ Lamb, Robert, Boyden Competitive strategic management, Englewood Cliffs, NJ: Prentice-Hall, 1984
  10. ^ Porter, Michael E. (1996). "What is Strategy?". Harvard Business Review (November–December 1996).
  11. ^ Chaffee, Ellen Earle (January 1985). "Three Models of Strategy". Academy of Management Review. 10 (1): 89–98. doi:10.5465/amr.1985.4277354.
  12. ^ Playing to win: how strategy really works. 2013-08-20.