Introduction
Strategic management is the process of formulating and implementing actions, which through analysis and diagnosis of both the external environment and the internal environment of the organization, emphasizing competitive advantages, can take advantage of opportunities or defend against threats that the environment presents the organization in order to achieve its stated objectives.
Abstract
Strategic Management is the process of formulation and implementation of actions, that through the analysis and diagnosis, both of the external environment, such as the internal environment of the organization, emphasizing the competitive advantages, it can take advantage of the opportunities or defend against the threats that the environment introduces you to the organization in order to achieve its stated objectives.
Development of the topic
Strategic Administration is the process of formulation and implementation of actions, which through analysis and diagnosis, both of the external environment and the internal environment of the organization, emphasizing competitive advantages, can take advantage of opportunities or defend against threats that the Environment presents you to the organization in order to achieve its stated objectives. Strategic management - "organic" management. Unforeseen, open or flexible situations predominate, as opposed to the “mechanical” administration, in which stable, closed, rigid, bureaucratic situations predominate.
Efficient administration. It responds to operational problems, with current limitations or resources, for today's businesses: getting things done right (as Peter F. Drucker would put it).
Background
The strategy is not new in business, surely it has been applied for several centuries, but it was only until the beginning of the sixties that it was considered important by academics and administration scholars to achieve business success.
Initially Chandler proposed a concept of "strategy" like this: "determination of long-term objectives and plans, actions to be taken and allocation of the necessary resources to achieve the proposed". As we see, this conception is basic and at the same time very complete, in addition, it includes several interesting aspects such as:
- The concept of the long term comes into play a determining role, which has been applied since then and until today, albeit with variations. The how of the strategy is taken into account, not only the results. advance certain actions and that these actions need to consume certain resources to be advanced. It involves the parts of a strategy and turns them into a whole.
Strategic management has various definitions, one of them refers to the art, technique and science of formulating, implementing and evaluating decisions, through the activities that companies carry out to achieve their objectives.
The Strategic Administration seeks the integration of Senior Management, line units such as: Finance, Marketing, Production, Administration and other areas. The activities of the Strategic Administration (Management) are carried out with the participation of all the members of the Organization and its hierarchical levels. The Strategic Administration (Direction) refers to the Formulation, Implementation and Evaluation of the Strategic. Whereas Strategic Planning refers only to Strategic Formulation. The strategic organization will achieve its long-term objectives by scaling the fulfillment of the short and medium-term objectives of operational management.
Strategic management, according to Drucker, is "… to do well what must be done, because there is nothing more frustrating for human beings than to do well what is useless." Having pointed out the specific courses of action, they should be done well, efficiently.
According to their attitude towards strategic planning, four types of organization are distinguished:
1. Defenders: organizations that have a limited market scope for their products and in which top-level managers are experts in the operational area but do not tend to seek new opportunities outside their current scope.
2. Explorers: Organizations that continually seek market opportunities and often experiment with potential responses to environmental trends. They are generally the creators of change, but due to their excessive concern for innovations in their product and in the market, they are not completely efficient.
3. Analyzers: these organizations operate in two areas, one relatively stable and the other changing. In the first, they operate routinely and efficiently through the use of formalized structures and processes, and in the second, managers closely observe their competitors for new ideas by adopting the most promising ones.
4. Respondents: Organizations in which managers frequently realize how change and uncertainty affect their organization's environments, but are not able to respond efficiently because they lack a consistent relationship between structure and strategy.
5. Anticipators: They are the ones who really assume the knowledge that it is better to anticipate future events instead of suffering and adapting to events that occur and affect them. Thus, they constantly make planning as part of their Strategic Administration, which implies being aware of the change that occurs in the environment day by day, and this means not only stating intentions, but setting measurable and achievable objectives, proposing specific actions and knowing the needs of resources (human, physical, financial and technological) to carry out these actions. It also means solidity at work, since the entire organization will move in search of common objectives applying common strategies.
The nature of strategic management
In the strategic management process it is important to consider the following approaches:
- Communication is basic, it represents the key to success in the institution's human and systemic interactions. Adequate communication between trusted and unionized workers, with the participation of synergic and empathetic processes, will result in greater participation by the organization, promoting the knowledge, quality, productivity, co-responsibility and commitment necessary to achieve the mission and objectives. Globalization and the ability to adapt to new changes demanded by the environment have an impact on making appropriate strategic decisions. Borders between countries no longer impose limits on us, looking at our activities from a global perspective will be strategic for proper institutional development. The environment is a key element of the strategy.It is a priority to make the organization aware of the environment.
goals
- The Strategic Administration has the general objective of conceiving the current need to develop an organizational strategy, as part of the administrative work aimed at achieving the greatest effectiveness in meeting organizational objectives and with the support of functional areas. defines as the process that is carried out to ensure that an organization has an appropriate organizational strategy and benefits from its use. There are too many risks for the executive to work based on his intuition to determine courses of action. Successful strategists are organized to identify Where you are and where you want to go in a given time. Companies plan ahead to facilitate and achieve goals. A good strategist constantly formulates and evaluates plans.Business success depends increasingly on the offer of products and services that are increasingly competitive globally and not just locally. If the price and quality of products and services are not competitive, they will fail in the market where they are located.
Strategy development
The strategy of an organization or company is the action plan that administrators (Management and executives) must develop to strategically position themselves in the market, satisfy customers, compete successfully and achieve economic and financial profitability. In this order of ideas, it can be said that the strategy is the way, the form, and the style that the business administrator uses through various competitive mechanisms and a business approach. Strategy is fundamental and essential that contributes to guide decisions in the management process.
Path to adapt to the environment and achieve goals
This concept was taken and developed by other scholars who proposed the strategy as a process rather than as a series of fixed determinations. Later, in the mid-1970s, the strategic management approach emerged, based on the following principle: the overall design of an organization can only be described if the achievement of "objectives" is added to "policies" and strategy as one of the key factors in the strategic management process. (Hofer and Schendel).
Hofer and Schendel focused on the four most representative aspects of the concept: the objectives (establishment), the strategy (formulation and implementation) and changes and achievements of the administration (activities). From these concepts the strategic administration as it is known today is molded. Those who have the responsibility of leading the organizations must try to anticipate future changes in the environment and design flexible plans and structures that allow adaptation, innovation and face any unforeseen situation.
Planning, strategy and policies
Planning has a lot to do with foresight, planning is trying to anticipate situations that can affect us, positively or negatively, that is why it is necessary within organizations this type of exercise, to try to anticipate future changes or events, trying to face them and catalyze them for good. Unfortunately, administrators are not magicians or mentalists who can accurately predict the future, what some do have, fortunately, is that they are visionaries who look beyond the others and therefore are successful in projecting the future. The strategies are generalized provisions of the actions to be taken to meet the general objectives, if there are no clear and well defined objectives, surely there will not be an appropriate strategy to achieve them, in addition,The strategies proposed must contemplate the use of resources necessary to carry out the activities that will lead to results, and must take into account how these resources will be obtained and how they will be applied to increase the probability of success. Next to planning and strategy are policies, which are basically guidelines that guide the administration in decision-making and generally do not require action, policies, strategies and the plan itself must be one unique mixture that allows to achieve good results.Next to planning and strategy are policies, which are basically guidelines that guide the administration in decision-making and generally do not require action, policies, strategies and the plan itself must be one unique mixture that allows to achieve good results.Next to planning and strategy are policies, which are basically guidelines that guide the administration in decision-making and generally do not require action, policies, strategies and the plan itself must be one unique mixture that allows to achieve good results.
Other definitions of strategy
- It is the Action Plan that integrates the main goals and policies of an organization, while establishing coherent sequences of activities to be carried out. It tells us how the objectives set by the organization will be achieved. The properly designed and technical strategies help us to competitively maximize internal and external conditions. The development of the strategy did not come about overnight. As Dan Schendel and Charles Hofer demonstrate, it emerged from the old approaches to policy formulation and initial strategy. The Policy Formulation approach refers to the concept of implementing rules that set limits and scope on the functional unit that could or do not work. The initial strategy approach encompasses determining the objectives and goals of the company,the actions to be undertaken and the allocation of resources necessary to achieve these objectives.
When formulating strategies, it is recommended to consider some aspects of the strategic management process. It specifies where the organization wants to go and how it plans to achieve the objectives.
The aspects it comprises
- What are the purposes and objectives of the organization? An appropriate strategy reflects the correct purpose of the company and its objectives. Know where the organization is currently headed. Know the scenario and the environment where the organization operates and / or would develop. What could be done to optimally achieve the future organizational objectives? The answer to this question is given through the results of applying the strategy.
Formulation of strategies by business segments
- The corporate level strategy is formulated by Senior Management when supervising various organizations with different lines of business. It raises questions such as: What are the objectives and expectations for each business? What type of business should the company be involved in? What and how are the resources allocated to achieve the resources? Peter Drucker stated that when developing goals at the corporate level, companies must decide where they want to be located. In turbulent situations the Corporation uses all its resources to achieve stability or survive; the Corporation would have to withdraw or carry out a withdrawal strategy from its growth plans. The strategic business unit strategy asks questions such as: What products and services will it offer?How will resources be distributed within organizations? How will the various functions (Financial, marketing, production) be managed. Functional-level strategies create the framework for managing functions. The strategies at the functional level will be defined from the business unit strategy, a study of the functional area of the company must be made in order to define intelligent actions to follow. There are no generic strategies at this level, so, for its establishment, it depends on the type of company and the activities of each function.The strategies at the functional level will be defined from the business unit strategy, a study of the functional area of the company must be made in order to define intelligent actions to follow. There are no generic strategies at this level, so, for its establishment, it depends on the type of company and the activities of each function.The strategies at the functional level will be defined from the business unit strategy, a study of the functional area of the company must be made in order to define intelligent actions to follow. There are no generic strategies at this level, so, for its establishment, it depends on the type of company and the activities of each function.
The aspects it comprises
- Strategy Formulation Strategy Implementation Strategy Evaluation
The purpose of Strategic Management is to identify, evaluate, create new and better opportunities for the future. Optimizing the management processes, the product, greater knowledge and customer satisfaction, having a good organizational climate, better uses of resources and technology.
Strategy formulation
It includes the identification of the Mission, Vision, Values, Strategic Diagnosis (Strengths, Opportunities, Weaknesses and Threats), Strategic Objectives (medium and long term), Strategies (general, specific and alternative), and Management Indicators. It also includes the distribution of resources, diversifying operations, entering new local and international markets, probably merging with other companies. Strategies determine long-term competitive advantages. Strategic decisions generate consequences for good or bad effects in various functions and activities of the company.
strategy implementation
The company will carry out the design of objectives, formulate its policies, motivate its workers, fair economic compensation of salaries, adequate distribution of resources, the development of a culture, the design of an organic and functional structure, the elaboration of programs and budgets, effective coordination of staff efforts. Its implementation requires managers, strategists, good technical judgment, experience, skills in interpersonal and group relationships. Each division or area of the company must ask itself: What should we do when implementing our part of the strategy? That we can also do the work?
Strategy evaluation
All the strategies are for future evaluations, due to the conjunctural variations of the environment (external factors) and internal situations, which are constantly changing. Certain actions are recommended in the evaluation:
- Constant verification of internal and external factors. Measurement of performance and productivity (Indicators). Take corrective actions if necessary.
Importance of Strategic Management
Through the Strategic Administration we can determine plans to follow to achieve objectives set at the beginning of a management in any organization, for this you must use all the administrative, technical, financial and human resources tools that the organization has. There are different types of strategies to follow according to the need to be corrected.
One of the most significant reasons is that it can make a difference in the performance of the organization. Another reason is that it refers to the fact that organizations of all kinds and sizes encounter constantly changing situations, whether they are changing small or large. This is where strategic management comes in. Managers examine the relevant variables to decide what to do and how to do it. Managers with strategic management better deal with uncertainties in the environment.
Strategic management is also important due to the nature of the organizations, which are made up of divisions, units, functions and work activities which must be coordinated and focused to achieve the company's goals. Without plans, managers cannot know how to organize people and resources; in the most extreme case, they do not even have a clear idea of what they need to organize. Without a plan, you cannot confidently lead or expect others to follow. And without a plan, managers and their followers are unlikely to achieve their goals or know when and where they are straying from their path.
Conclusion of the topic
Good strategic management and administration are decisive for the proper management of the different areas of the organizational pyramid, it must be taken into account that this tool is not only applicable to large organizational companies, since it is also suitable for small and medium-sized companies, helping them to define their objectives and feasible goals to be achieved, with ambitious visions that force them to become support and advisory units.
The Strategic administration is essentially a support that any organization that wants to improve its constitution, situation, since the analysis of the internal and external environment helps them to make preventive decisions thus counteracting risks and costs, is very useful since It helps to carry out or design better strategies to create a solid company or improve those already established. From a systemic perspective, it can be established that strategic management is the art and science of formulating, implementing and evaluating international decisions that allow the organization to achieve its objectives. This involves integrating administration, marketing, finance and accounting, production and operations,research and development and computerized information systems for the success of the organization.
Bibliography
- Thompson Arthur and Strickland. Strategic Management and Administration. Mexico. McGraw-Hill.Porter Michael. Competitive strategy. Mexico. Cecsa.Koontz Harold and Heinz Weihrich. Management A Global Perspective. Mexico. McGraw - Hill.Charles W. Strategic Management A Comprehensive Approach. Mexico. McGraw - Hill.Mintzberg Brian.1991. The Strategic process. Mexico. Quinn Prentice - Hall.
