1.1 Strategic management concepts
The strategic management process, dynamic in nature, is made up of the set of commitments, decisions and acts that the company needs to carry out to achieve strategic competitiveness and obtain above-average profits.
It is defined as the art and science of formulating, implementing and evaluating multidisciplinary decisions that allow a company to achieve its objectives. As this definition suggests, strategic management focuses on integrating management, marketing, finance and accounting, production and operations, research and development, and information systems, to achieve the success of an organization.
It is a set of decisions and administrative actions that determine the long-term performance of a corporation. It includes environmental analysis (both internal and external), strategy formulation (strategic or long-term planning), strategy implementation, as well as evaluation and monitoring.
1.1.2 Importance of strategic management
Without plans, managers cannot know how to organize a company's people and resources, they may not even have a clear idea of what needs to be organized.
It is also important due to the nature of the organizations, which are made up of divisions, functions and work activities, which must be coordinated and focused to achieve the company's goals. One of the most significant reasons is that it can make a difference in the performance of the organization.
1.1.3 Impact on entrepreneurial and innovative activity in companies
Entrepreneurial activity and corporate innovation is linked to strategic management and some concepts are handled in this area such as investment, innovation and imitation. There are certain characteristics that an entrepreneur must have, such as aggressiveness, pro-activity and innovation.
Corporate entrepreneurial activity is vital in companies, since it is the set of capabilities that a company possesses to produce or acquire new products and services and direct the innovation process, this is today something very essential in organizations, since The role of leaders is to inspire members of the organization to work in teams to obtain significant results and thus create a favorable corporate attitude for the performance of their activities.
1.1.4 Benefits of strategic management
The greatest benefit of strategic management has always been that it helps organizations to have better strategies because they use a more systematic, logical and rational approach to choose their strategies. These benefits can be divided as follows:
Financial benefits: Some research shows that organizations that apply strategic management concepts are more profitable and successful than those that do not.
Non-financial benefits: These are tangible benefits, for example, a greater alert to external threats, a better understanding of strategies, etc.
Other benefits:
- It allows to detect opportunities, classify them by priority and exploit them. It offers an objective vision of administrative problems. It represents a framework to better coordinate and control activities. It reduces the consequences of adverse changes. It allows the improvement of resource allocation. It reduces the amount of time and resources devoted to correcting wrong decisions. Constitutes a framework for internal communication. Contributes to incorporating individual behavior into total effort. Offers a basis for delineating individual responsibilities. Encourages reasoning. Offers a cooperative approach. a positive attitude towards changes. Provide discipline and formality to business administration.
1.1.5 Nature and scope
The nature of strategic management is manifested in the following approaches:
- Communication is basic. Globalization and the ability to adapt to new changes required by the environment have an impact on making appropriate strategic decisions. The environment is a key element of the strategy.
The strategic administration must be seen from a systemic approach, that is, from a global point of view in which all the angles and points that affect the project to be developed or managed are appreciated, it is important when you are with this approach, that you analyze all the ends that we sometimes let loose, because they seem insignificant, but they are related. Therefore, the strategic administration has a systemic scope in the development of projects, that is, it covers the entire extension from planning to the end of execution and evaluation.
Strategic management nowadays has generic tools, both for formulation and for execution, which can be applied to any organization.
Without a systemic description of the strategy, executives cannot easily communicate it, either to each other or to employees. Without a shared understanding of the strategy, executives cannot create alignment around it.
1.2 Elements of strategic management
1.- Strategic planning should be evolutionary rather than directive:
- Contain a few broad-spectrum objectives. The objectives are the result of reflection and dissemination over a long period of time. The objectives are designed to give departments priorities for institutional development.
2.- Provide an organizational structure within which a wide variety of individuals can identify and solve their own problems:
- Effective two-way communication between the central authority and the operating units. Create an environment that strengthens trust and credibility in the staff. Encourages dialogue and discussion within the organization in order to avoid or minimize the external threat.
3.- Focus management on performance and continuous improvement:
- It encompasses a means-strategies-ends approach instead of means-strategies-ends. The approach encourages immersion in personnel, who will move the company to its goals. The culture of participation and evolution allows everyone to understand and commit to achieving goals.
4.- The strategic plan must be supported by a competent authority.
1.3 Challenges of strategic management
- Threats from new competitors-barriers to entry. Threats of substitution. Negotiation power of buyers and suppliers. Presence of rivalries. Adapt to change. Make realistic strategic management planning (achievable plans).
1.4 Social and ethical dimensions of strategic management
According to their attitude towards strategic planning, 4 types of organizations are distinguished:
- Defenders: Organizations that have a small market scope for their products, and in which top-level managers are experts in the operational area but do not tend to look for new opportunities outside their scope. Explorers: Organizations that continually look for market opportunities. and they often experiment with potential responses to environmental trends. Analyzers: These organizations operate in two domains, one relatively stable and the other changing. Respondents: Organizations where managers frequently realize how change and uncertainty affect to the environments of your organization.
1.5 Entrepreneurial activity and corporate innovation
The strategic purpose focuses on the internal environment of the organization, and involves identifying its resources, values, capacities and aptitudes to give them momentum and make the most of them and thus achieve their goals in the competitive environment.
It is concerned with winning competitive battles and achieving global leadership.
When established in a strong way, you can make staff perform like you never imagined.
It plays a fundamental role, since an entrepreneurial attitude goes hand in hand with the strategies, procedures and goals to be achieved, also when innovation is required in a productive activity or simply in an institution, whatever its turn requires to follow a Adequate planning, according to their needs for change and above all to see a perspective of what they want to improve in order to implement and develop a strategic administration that improves productivity, establishes an environment of complete trust among workers, and that improves their quality. of life.
