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What is Strategic Management
Strategic management is a management field focusing on long-term planning and direction of the organization. Strategic management in an organization ensures that things do not happen randomly but according to pre-planned, long-term plans.

Strategic Management“What business strategy is all about-what distinguishes it from all other kinds of business planning-is, in a word, competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as efficiently as possible, a sustainable edge over its competitors.”

Kenichi Ohmae

What is strategic management?

Strategic management is a management field focusing on long-term planning and the direction of the organization. Strategic management in an organization ensures that things do not happen randomly but according to pre-planned, long-term plans. It serves, on one hand, the transmission of the owners’ requirements to the management (Governance), and on the other hand, the organizational management for the organization, unification and direction the behavior of all people in all parts of the organization.

What are the processes and phases of strategic management?

Strategic management is a key and top management activity, where all management functions meet - it is one of the key pillars of management and it forms the skeleton of the overall management of each organization. It formulates operating rules, priorities and direction in the long term, including the direction the organization wants to go. The whole process of strategic management takes place in four primary, recurrent phases (the so-called Strategic cycle):

Strategic management is not just about setting long-term objectives. It’s a very comprehensive managerial discipline - strategic management is the art, science and skill of formulating, complex decision making and subsequent implementation of all what enables an organization to achieve its objectives. Strategic management represents a process of specifying the organization mission, its vision and objectives, different policies and plans, definition of program, projects, and various measures that help achieve a company´s objectives. There has to be a schedule which specifies when which objectives are to be achieved. There must be metrics by which to measure whether the objectives have been achieved.

What is essential for strategic management?

For strategic management is crucial achievement that all staff know what are the common goals and directs their behavior and actions to achieve them. This is true, and only the highest sense of strategic management.

What is the outcome of strategic management?

First of all, it’s a well-functioning and thriving organization and the objectives achieved. One of the outcomes of strategic management is also “The strategy” itself. It is usually a formalized document that contains a description of the first two phases of the strategic cycle, i.e. a description of the organization mission, its vision and strategic objectives and a schedule for their implementation. It should be as concise and clear as possible so that everyone knows what to do. The big mistake is writing many page documents that nobody reads.

The strategy may be only one?

There always has to be a key strategy (sometimes referred to as a business or a global strategy), which aggregately determines the overall direction of an organization or business. According to their needs, large organizations further operate with a hierarchy or other sub-strategies such as:

Who is responsible for the strategic management?

The determination of the mission and strategic objectives of the organization is a matter for the owner, or the Statutory Body that transmits them to the senior management of the organization through strategic objectives, his /her own images of an operation, identifies the entrepreneurship direction and defines the tasks which are to be accomplished. For example, by using the Balanced Scorecard (BSC), balanced objectives for all key aspectscan be achieved. In medium and large organizations, the main responsibility lies with the CEO, but individual tasks apply to all managers and correctly set strategic objectives are further propagated down to the level of the tasks of all individual employees. In small organizations, strategic management usually takes place at the level of the Statutory Body.

The most commonly used methods, models and techniques in strategic management

Related terms and methods:

Related personalities:

Related management field:

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Last update: 22.01.2016

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