Summary
In this work the theoretical bases are developed with which the comparative analysis of the work is sustained. The various points of view of the authors of the most important theories and contributions of the Strategic Direction are mentioned.
The success of strategic management lies in the ability to adapt to the environment and achieve better and more stable results than the competition. Different authors already point out that the world is presented in this 21st century as:
"A global scenario, where the market is a game of all against all" Chiavenato, I. 1998.
The leading companies of greater dimension have among their principles of action to act as a small company and train their executives to perfect their way of managing.
For the improvement efforts in a company to be successful, it is necessary that most of the members of the organization are aligned in a common purpose, forming part of a single vision, with a mission, values and a clear and shared organizational strategy..
It is necessary to create the conditions for the development of the strategic planning process with sufficient realism and freedom, promoting coordination and the fluidity of knowledge and information between management and the entire organization.
Introduction
Companies currently face the challenge of assimilating strong and continuous changes, not only in the environment, but also in social, technological, regularization, legislation, capital resources, among others. Hence, it is necessary to make decisions within the business environment in order to adapt to this changing and complex world. This process is called Strategic Management, which can be defined as the art and science of putting into practice and developing all the potential of a company, which ensures long-term survival and, if possible, beneficial; always considering the social, economic, political, environmental, temporal and material conditions.
The Strategic Directorate is a powerful tool for diagnosis, analysis, reflection and collective decision-making, regarding the current task and the path that organizations must follow in the future, to adapt to the changes and demands imposed on them by the environment and achieve maximum efficiency and quality of its services. (De Souza, 2000)
The environment plays a relevant role in these planning processes. Its greatest significance lies in the fact that due to its changing nature, it puts pressure on organizations to build capacities to identify external critical factors that may affect the performance of their activities. (De Souza, 2000)
Having analyzed the environment, attention to the interior of the organization is regularized. An analysis is made through which some qualities contained in it are sought, which can be exploited to take advantage of opportunities and combat threats. Such qualities are labeled strengths. The analysis also tries to locate negative characteristics that may become an obstacle to dealing with the environment, and which will therefore need to be eradicated. These characteristics are considered as weaknesses.
Obtained these four elements, strengths, opportunities, weaknesses and threats (present in the SWOT matrix analysis), a relationship is made between them in a kind of intersection, through which master strategies can be generated whose engine is a purpose lacking specificity, which can be approximated but not specified and known as mission. From the master strategy are derived programs and projects with achievable and measurable ends, which form a chain of actions aimed at the approach of the mission.
The decade of the sixties of the 20th century was an important impulse for many scholars, who leaned in and addressed the issue of Strategic Management, stimulated by the need for pro-activity in the face of aggressiveness and turbulence in the environment, hence the Strategic Management become one of the most widely used management tools in companies worldwide.
Overall objective
Prepare a document linking the basic concepts of strategic management, from the search for updated bibliography.
Once the general objective of this work was designed, the
Following specific objectives:
- Conceptualize the term strategic management from the perspective of various authors. Analyze the origin and evolution of strategic management. Analyze the importance of strategic management.
Present and conceptualize the elements that make up strategic planning, as one of the components of strategic management
1. Theoretical foundations of strategic management
1.1. Origin and evolution of strategic direction
To talk about the concept "Strategy" and its evolution, the reference to the year 300 before our era is taken, with the book by Tzun Tzu Ping Fa or "The Art of War", in which, based on the experience of the old campaigns, it establishes recommendations on how to make war, the organization for armies, the use of weapons, as well as explaining the influence of geography and politics in war.
The term strategy comes from the Greek «Strategos» which means «a general». In turn, this word comes from roots that mean «Army» and «Acaudillar». The Greek verb Strategos means "Plan the destruction of enemies by reason of the effective use of resources." The concept of strategy in a military and political context has been well known for hundreds of years.
One of the first uses of the concept of strategy in a commercial context was presented in Ancient Greece, when Socrates faced the Greek militarist Nicomachides. The Athenians had just held elections to elect generals. Nicomaquides was upset that Antistenes, a businessman, had beaten him. Socrates compared the activities of a businessman with that of a General and pointed out to Nicomachides that, in any task, those who properly execute it have to make plans and move resources to achieve the objectives.
Jeffrey Bracker says that this view apparently disappeared with the fall of the Greek city-states and did not reappear until after the Industrial Revolution.
The first step in the evolution of Strategic Management took place in the late 1950s, when companies invented a systematic approach to deciding where and how the company would conduct its future business. The analytical part of this approach is called strategy formulation, and the process by which managers formulate it together is called strategic planning.
The second step is carried out in the 1960s, discovering that the internal configuration (capacity) of the company has to be transformed whenever a company makes a discontinuous change in its strategy.
The third step was taken in the late 1970s, in response to the increasing frequency of rapidly developing discontinuities in the environment, particularly the social, political, and technological ones whose consequences were difficult to predict; To address them, companies began to use a current strategic response technique called problem management.
In this decade, many companies detect changes that they do not know how to face the instruments and techniques of conventional management, with budgetary control, long-term planning was inadequate to face new problems.
In the fourth and most recent decade in the 1980s, there was a reaction to the limitations of strategic planning, trying to overcome technical, economic and socio-political-cultural variables. In order to carry out a strategy, it is necessary to have adequate capacities, that is, personnel, trained and adequate leaders.
Today, management scholars support the strategic management approach. This important approach has emerged over time, primarily based on old approaches to policy formation and initial strategy.
Today's companies face more than ever the challenge of assimilating strong and continuous changes, not only in the environment, but also in social, technological means, new regulations and legislation, capital resources, etc.
It is important to remember that strategy must always go hand in hand with innovation and the creation of added value. Any company that wants to be successful and looks for benefits must submit to a formal strategic management system. The company must commit to it, not only in order to obtain the highest levels of profitability but also in order not to be doomed to certain failure.
1.2. Strategic direction
The Strategic Direction starts from the English "Strategic Management" and is understood by the philosophy of business management that aims to align the efforts of organizations towards sustainable transformations in the long term. It favors the analysis of the environment and the use of prospective techniques.
It is considered a theoretical structure for reflection on the great options of the company, reflection that is based on a new organizational culture and a new attitude of management, where it is no longer about escaping the difficulties brought about by a turbulent environment, but to meet them, where they flee from the improvised in search of the analytical and the formal
Peter Drucker defines the organization's strategy with the answer to two questions:
What is our business?
That should be?
- KI Hatten, 1987. Strategic Management is the process through which an organization formulates objectives, is aimed at achieving them. Strategy is the means, the way to obtain the objectives of an organization. It is the art (trick) of intermingling internal analysis and wisdom used by leaders to create values of the resources and skills that they control. To design a successful strategy there are two key rules: Do what you do well, and choose the competitors you can defeat. Analysis and action are integrated into the strategic direction. David, 1991. Carry out strategies that reap the benefits of your internal strengths, take advantage of external opportunities, mitigate internal weaknesses and avoid or lessen the impact of external threats.In this process lies the essence of strategic management. Mintzberg, 1993. The word strategy has been defined in different ways: five definitions with “P”.
The five “P's” of the strategy.
Figure # 1: The five “P's” of the strategy. Source: Mintzberg, H. and Brian James, VJ (1997). The strategic process. Concepts, Contexts and Cases. Ed. Prentice Hall Hispanoamericana. Mexico.
The conceptual definitions provided by Mintzberg for each of the elements that make up the figure previously exposed.
- Strategy as a plan: Indicates that the strategy is a set of steps, a plan, a consciously programmed course of action. The particularity of this concept is given by the anticipated elaboration of the actions, and they are proposed consciously and intentionally directed to a purpose. Strategy as a guideline of action: It is argued that strategies can be emergent and deliberate. That is, it acts as a maneuver to dominate the competition.Strategy as a Pattern: of behavior in the course of an organization, consistency in behavior, although it is not intentional.Strategy as a Position: identifies the position of the organization in the environment in which moves (Business Type, market segment, etc.) Strategy as perspective: strategy as perspective Corresponds to a broader vision,It implies that it is not only a position, but that it is also a way of perceiving the world. Strategy is a concept, an abstraction in the minds of the actors. The important thing is that the perspective is shared by and among the members of the organization, through their intentions and actions.
- F. David, 1994. Strategic Management. A strategy has to carry out strategies that take advantage of its internal strengths, take advantage of internal opportunities and avoid or lessen the impact of external threats. In this process lies the essence of Business Management. Koontz, Strategy. Planification and control. Strategies are general programs of action that carry commitments of emphasis and resources to implement a basic mission. They are goal patterns which have been conceived and initiated in such a way, with the purpose of giving the organization a planned direction. Kenneth, Andrew. The strategy is the set of missions and main objectives or goals, as well as essential policies and plans to achieve those goals,presented in the form of selection of activities to which the company is dedicated or is going to dedicate itself.
As you can see, different authors propose different conceptual definitions of strategic direction, and in all of these there are similarities and approaches.
1.3. Stages of strategic direction:
The Strategic Direction ”arises to cover the deficiencies of the Planning and it is developed in a complete process and articulated in two great basic and interrelated stages:
- Formulation, Implementation and Control
Stages of the Strategic Management process.
Figure # 2. Stages of the Strategic Management process. Source: self made
In the first stage, the strategic planning approach is basically included, which consists of guiding the activities of the company in the future, combining the aspirations for the company with the opportunities and threats that the environment presents and from the point of view of internal view the capabilities it has.
The second is intended for the implementation of the chosen strategies, where it is unavoidable to capture lines of action specially designed for different areas and organizational levels until the formulated strategies are allowed to become operational.
It is controlled based on an analysis of the deviations between the results obtained and the expected results, the control aims to ensure compliance with the plans, objectives and the continuity of the strategic reflection. For a correct execution of the strategy it is necessary to assign the different tasks and responsibilities to the members of the company, coordinate and integrate the actions, establish the lines of authority, the communication channels, so that the appropriate information must flow. The ability of the management team to stimulate the activity of human resources so that the objectives are effectively achieved, as well as the organizational structure and business culture that support implementation, is important.
The existence of an information and communication system that makes it possible to respond on the one hand to the analysis needs of the former as well as, on the other hand, to the requirements posed by the mere performance of the planning, control and organization functions, represent another element key that, together with the organizational structure, the style of management and leadership and the organizational culture, constitute the superstructure of the Strategic Management.
1.3.1. Strategy formulation
This stage of strategic management is understood in three fundamental phases: intelligence, conception and choice, for the formulation or design of possible alternatives, both at the business level and at the corporate and functional level, as shown in figure # 3:
Formulation of the Strategy.
Figure # 3. Formulation of the Strategy. Source: self made.
a) Intelligence stage.
"In this phase it is about identifying the strategic problem, which can be understood as the gap between the desired situation of the company in relation to its own aspirations and the evolution of its environment and the potential situation in the absence of a new strategy, structure in three great stages: the strategic diagnosis, the differentiation of the general objectives of the company, and the determination and analysis of the strategic gap ”
Strategic diagnosis: it consists of analyzing the current environment and the future evolution of these, as well as an evaluation of the resources and skills that the company possesses, which allows us to know its potential in relation to the environment and capabilities compared to the competition, external analysis It tries to identify the threats and opportunities that characterize the environment in which the company is located and the internal analysis seeks to determine and evaluate the set of factors that constitute the strengths and weaknesses of the company. The interrelation of these two external and internal factors will allow us to recognize a better way to detect opportunities and threats and to identify strengths and weaknesses.
Determination of the objectives: This stage will be conditioned by the mission of the company and the result of the strategic diagnosis and the demands of the business environment (internal and external actors of the organization)
Strategic gap: It allows knowing to what extent the current strategies allow to meet the objectives and which strategic modifications will be required, if the current ones are insufficient.
b) Design and selection stage
In this phase, the possible consequences of the strategy are defined and evaluated in search of the strategic alternatives that will obviously cover the gap in the previous stage. If there is congruence between the demands of the environment, the company's aspirations and capabilities, a problem will appear for which will look for a solution analyzing and proposing some changes in the existing strategy.
1.3.2 Implementation and Control
This stage is considered the most important and therefore the most difficult because at this point in the management process, managers with the capacity they admit to relate to and motivate employees must implement the strategies formulated. Controlling the effectiveness of the strategy to achieve the objectives of the organization and managing the feedback that supports the emerging strategies is another of the functions of this phase. Strategic Control is essential since efficient control provides adequate attention, in a timely manner and with the least waste of time and effort. Strategy implementation is often said to be the active stage of strategic management.
The Strategic Direction is the visualization of the integral operation of an organization, immersed in an environment; It is a continuous process of interrelation between external and internal influences, to achieve excellence and try to fully respond to the demands of the environment. It constitutes a very complex task at present, since the essence of any commission, however small it may be, will always be based on an optimal use of the inexhaustible potentialities of men and their interrelation with resources. It is the art and science of putting into practice and developing all the potential of a company, which will ensure its long-term survival.
1.4. Basic elements of the methodology for the strategic design process
Since the 60s of the last century, the need for organizations and in particular companies to carry out their strategic designs has been gaining strength in order to aspire and obtain the necessary results in terms of both economic efficiency and effectiveness. What are some of the reasons for this need? Among others, the following can be mentioned:
- Changes in the environment. Given the conjunction of a group of factors, since the early 1960s the environment in which organizations operated became more and more variable and unstable, so that before, companies could only with a retrospective analysis and with strong springs of the market get more or less the results that were intended; In these new conditions it became impossible to propose results and achieve them without taking into account the environment with its variations and demands. Today the environment has become so changeable and unstable that it can be said that the only truly stable and regular thing is the instability of change. So, under these conditions, the question is: Is Strategic Planning more necessary or not? This factor has a decisive and determining influence on the rest of the factors.The rhythms of technological changes. Scientific-Technical Progress as an evolutionary and upward development process has always been the most important factor in achieving the increase in labor productivity and therefore a decisive and dynamic factor in the development of the productive forces in any society, however from the second half of the last century, the rhythms and levels of Scientific-Technical Progress have not been unmatched in history, affecting all spheres of social life. Competition. It has become increasingly intense, varied and virulent, which causes the need to know it well and to know which are the main forces that act in its environment and in its sector of competition, with a view to having the possible competitive advantages identified..The globalization,as an objective phenomenon that affects today the development of the productive forces that interrelate the economies of the countries. So, in a globalized economy, it is essential to know the action scenario, the environment, its potential customers and needs and how to guarantee business sustainability. The need for organizations to act proactively. The changes in the environment and their speed mean that organizations today cannot act reactively, as they cannot afford to wait for things to happen and then change and foresee them, but they must have enough Intelligence and Vision to “anticipate changes”In a globalized economy, it is essential to know the action scenario, the environment, its potential customers and needs and how to guarantee the sustainability of the business. The need for organizations to act proactively. The changes in the environment and their speed mean that organizations today cannot act reactively, as they cannot afford to wait for things to happen and then change and foresee them, but they must have enough Intelligence and Vision to “anticipate changes”In a globalized economy, it is essential to know the action scenario, the environment, its potential customers and needs and how to guarantee the sustainability of the business. The need for organizations to act proactively. The changes in the environment and their speed mean that organizations today cannot act reactively, as they cannot afford to wait for things to happen and then change and foresee them, but they must have enough Intelligence and Vision to “anticipate changes”The changes in the environment and their speed mean that organizations today cannot act reactively, as they cannot afford to wait for things to happen and then change and foresee them, but they must have enough Intelligence and Vision to “anticipate changes”The changes in the environment and their speed mean that organizations today cannot act reactively, as they cannot afford to wait for things to happen and then change and foresee them, but they must have enough Intelligence and Vision to “anticipate changes”
As alluded to in the introduction, a methodology for a strategic process of change is presented, which is based on the model proposed by Michael Doyle, which is represented in figure # 4. Therefore, the Strategic Planning model itself it is a model of change.
General Model of Organizational Change.
Figure # 4. General Model of Organizational Change. M. Doyle.
Source: Collective of authors. Management of cadre training and management studies. Ministry of Higher Education Havana, 2007 second edition
The basic elements of the methodology that we propose are listed below and are contained in the Model See Figure # 5: in Annex # 1:
- Mission, Vision, Shared Values, Strategic Diagnosis, using the SWOT Matrix, Scenarios, Key Results Areas, Strategic Objectives, Strategies, Control and Evaluation System of the Objectives.
Each agency has the power to use the methodological order for the projection of the planning that it considers most appropriate to its characteristics, however it must include the 9 basic elements mentioned above, which are reflected in figure # 5. The use of elements that include other models of Strategic Design will be left to the decision and capacity of the organization or territory to do so.
1.6. Essential elements of strategic direction
According to the texts consulted and considered by the author, the base contains (see figure # 3) the beliefs or values of the company and its managers. The mission and vision of the company are built on them. These are the foundation on which the objectives are based. The strategy must be the way to achieve the objectives (from the mission and vision) and finally, the policies will be guidelines for action that accompany the strategy.
The Objectives are the highest part of the figure of the key concepts, they are the goal; the end to achieve. We could define them as the specific purposes, levels or results defined in response to the question: What will we try to achieve within the framework of our business mission? Therefore, the Goals should be measurable, achievable and scheduled over time, covering all critical areas for the viability of the company. Mission-Vision Model (See Fig. # 6: in Annex # 2):
1.6.1. Mission
The Mission must explain what the organization does, what its reason for being is. You must define your purpose or socio-economic purpose, in which business is the company, By means of three simple questions the company knows exactly, and can rethink, the business to which it is dedicated:
- What kind of need does the company want to satisfy? Who should it satisfy? (segment of the population or market) How? (With what technology or know-how will it do it?).
If the Mission is focused on the present of the company, the Vision has the same purpose, but it is focused on the future, on the future that the company wants to achieve; where to go. Many companies include in their definition of Mission to Vision, offering in it both temporary perspectives.
Mission character
- It must be clear in such a way that all the members of the organization can understand it and assume it. It should not be too short to become a solgan, nor too long to make it tedious. It must be unique. It must be elaborated in the form of objectives. be inspiring.
| KEY QUESTIONS TO DEFINE THE MISSION | |
| About us? | Identity and legal recognition that gives legitimacy to our action |
| What are we looking for? | The main functions of the organization. Fundamental changes that we want to achieve in the environment in which we work. Reason of being of our organization. |
| Why do we do it? | Principle values and motivations of a moral, religious, political, social and cultural order. |
| Who do we work for? | Social sectors towards which our efforts are mainly oriented. |
Table # 1. Key questions to define the mission. Source: own elaboration.
1.6.2. View
The word Vision derives from the Latin videre: ver. This association is significant; The more detailed and visual the image, the more persuasive it will be. Being tangible and immediate, a vision infuses the future of the organization with shape and direction and helps people to set goals that serve as an impulse.
In a company that makes twice as much effort to get to know both its current reality and its desired future (vision) very well, what Fritz calls Creative Tension can be produced. Tension in the sense of force that leads to change, to achieving this desired vision.
| KEY QUESTIONS TO DEFINE A VISION | |
| What is the desired image? | In other words, what is the desired future situation for our clients, users or beneficiaries? |
| What will we be like in the future? |
That is, what will be the future position of our organization in relation to other organizations. |
| What will we do in the future? |
What are the distinctive contributions we want to make in the future and / or what are the main projects or activities that we want to develop. |
Table # 2. Key questions to define a vision. Source: own elaboration.
1.6.3. Values
Values are the basis on which the key decisions of a company are based: each organization is a product of how its members think and interact (Senge). Values should describe how we aim to operate day by day, while pursuing our vision.
A set of guiding values could include: guidelines for reciprocal conduct, appreciation of the clientele, the community and the dealers, the limits that we will set ourselves. The best way to express values lies in behavior; if we act as we should, what would an observer see us do? How would we be thinking?
When values are elaborated but ignored, a fundamental part of the shared vision is canceled. On the other hand, when values are a central part of the shared vision project and are made available to all, they become a symbol that guides behavior that will help people move towards that vision. From these values the strategies will emanate first and then objectives; it is the values that guide the entire work of the company.
Following the work proposals of Salvador García and Simón Dolan in their book.
Management by values, we must remember that every culturally structured company must have clearly defined two large groups of shared values or principles that guide its daily action goals: The values associated (where are we going?) With its mission and the mission itself (raison d'être of the organization, why?)
The instrumental or operational values associated with the way of thinking and doing things with which the organization intends to face the demands of its environment and integrate its internal tensions to achieve its vision and mission.
What gives coherence to an organization is precisely the clarity and consensus of its goals (ends) and its principles (values). Values (our organizational reference) should be few and clear.
All of us communicate our values: who we are and what is important to us. Knowing that the most meaningful communications about values take place through behaviors and not through words, our values are revealed by acting instead of speaking. Values are communicated at any level of human interaction (interpersonally, organizationally, culturally, psychologically, socially, politically, and economically). The values most frequently and effectively communicated in organizations are:
- For what we reward, for what we punish, for what we say, for what we do, for consistency or hypocrisy, for processes, for relationships, for character.
Values communications fail when organizations act or appear to be hypocritical, when their values directly conflict with each other, and when the values adopted do not match their actions. On the contrary, they are synergistic when the organizational values are aligned with the Personal ones, with those of the teams or the units that compose it.
Therefore, having an explicit formulation of the company's strategic values should add another additional utility to that of increasing synergy and internal coherence:
The values that a company expresses abroad, through advertising and other means, serve to make customers trust and even identify with it.
1.6.4. Strategy
A Strategic Vision allows to fulfill two vital functions:
- Establish the Reference Framework to define and formalize the Mission, which in turn must be the Guiding Criterion of Strategic Planning. Inspire, motivate, integrate or move the people who make up the organization to act and enforce the raison d'être (Mission) of the company or Institution.
Clearly understanding where we want our company to be is even more important than knowing where it is. It should not be forgotten that an adequate knowledge of the current reality of the company is essential, since it is the difference between these two situations, the real and the desired, that produces the force that leads to change.
The Strategies, in this context, are the way to achieve the objectives based on the mission and vision of the company (taking into account the values). We could define the strategy of a company as:
The set of the main decisions, reflected in the distribution of resources, aimed at achieving a certain competitive position within its market, in order to achieve the objectives set within the framework of the company's mission. Any decision on which the long-term situation of the company depends depends on the strategy.
1.6.5. Policies
Policies in the field of strategic management are guidelines for action, guidelines or decision criteria for the selection of strategic alternatives. Therefore they are of a lower level than the strategies. Its function is to delimit the field of strategy, channel it, as the figure in which policies accompany strategies wants to express. For this reason, they have a longer life, since, although the strategies, as we have seen, can hardly be repeated, the policies tend to be more effective.
The shared mission must provide focus by driving the shared strategies and values that must provide control by guiding their implementation in the company. Success in the implementation of strategies will lie in the capacity of each organizational unit, of each group, to translate, at the operational level, concrete changes that lead to the fulfillment of the mission of the organization.
1.7. Strategy levels or hierarchy of strategies
The strategies to be adopted by any organization to achieve its objectives can be classified (see Figure # 8: in Annex # 3)
Three levels of strategy definition can be considered, corresponding to different hierarchical levels in the organization, each of which is assigned different powers regarding decision-making.
The three levels are clearly differentiated in diversified companies, that is, they operate with different products or markets, in which it is possible to distinguish the overall performance of the company, understood as a set of activities or businesses, with respect to its specific behavior in each one of these activities.
- Strategy at the Corporate or company level Strategy at the business unit level Strategies at the functional and operational levels.
a) Level of corporate or company strategy: This strategy is formulated by senior management in order to supervise the interests and operations of organizations that have more than one line of business. The main questions to be answered at this level are:
What type of business should the company be involved in?
What are the goals and expectations for each business?
How should resources be allocated so that goals can be achieved?
b) Level of business strategies: This strategy is formulated to achieve specific business goals and deals with the administration of the interests and operations of a particular business. It deals with questions such as:
How will businesses compete within your market?
What products and services should I offer?
Which customer are you trying to serve?
How should the various functions (Production, Marketing, Finance, etc.) be managed in order to meet market goals?
How will the resources be distributed within the business?
This strategy tries to determine the approach that should be applied to your market and how a business should be conducted, keeping in mind the resources and market conditions.
Many corporations have varying interests in different businesses. Senior management executives find it difficult to organize such complex and diverse activities in their corporation. One way to deal with this problem is to create strategic business units. A strategic business unit (UCE) groups all business activities within the multi-business corporation that produces a particular type of goods or services and treats them as a single business unit.
The corporate level provides a set of guidelines for that unit, which then develops its own strategy at the business unit level. The corporate level then reviews the plans of these units and negotiates the changes if necessary.
Single-business companies resort to formulating strategies at the business unit level, unless they are looking into expanding to other types of businesses. At this time, strategic planning at the corporate level is necessary.
c) Functional and operational strategy level: This strategy is formulated by a specific functional area as a reinforcement to carry out the business unit's strategy. In this strategy the reference framework for the administration of functions is created Among them:
- Human Development. Innovation and technology. Production. Marketing and commercialization. Logistics. Finance.
In this way, the strategy at the business unit level is sustained.
In a functional organization, different business functions such as marketing and finance are grouped into different departments, each of which will have to develop a strategy that in turn will help in relating the strategies to higher levels.
Functional and operational strategies are more detailed than organizational strategies. In addition to that their time horizons are shorter. Its purpose has three aspects:
- The communication of short-term objectives. The description of the actions necessary to achieve short-term objectives. The creation of an environment that favors their achievement.
It is of utmost importance that lower-level guidelines participate in the development of functional and operational strategies, so that they properly understand what needs to be done and feel more committed to the plan.
Functional and operational strategies need to be coordinated with one another in order to minimize unavoidable conflicts, as well as to improve the chances of achieving organizational goals.
One aspect that must be carefully taken care of is the integration between all types of functional strategies. The key to good management is to achieve this coherence and integration between all strategies.
To decide whether or not the strategy is suitable for the situation at hand, there are different principles for its evaluation. Exposed.
- Consistency: The strategy should not present inconsistent goals or policies. Consistency: The strategy should present an adaptive response to changes in the environment. Advantage: The strategy should facilitate the creation and preservation of competitive advantages. Feasibility: The strategy should be viable in terms of resources and results.
Conclusions
This chapter collects as a whole theoretical considerations of some authors on the term strategic management and its components. It is the author's consideration that for the use of all this theory it is necessary to adapt it to the conditions of our organization.
Strategic planning is necessary to anticipate the actions to be taken to achieve certain ends or purposes within the organization.
Consideration should be given, not only to internal processes, but to involving all operational and administrative areas to reach consensus on the actions to be taken.
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Annex # 1: Figure # 5. Strategic planning model based on the basic elements of the proposed methodology.
Strategic planning model based on the basic elements of the proposed methodology.
Source: Collective of authors. Management of cadre training and management studies. Ministry of Higher Education Havana, 2007 SECOND EDITION
Annex # 2: Fig. # 6. Mission - Vision Model
Source: MSc. Carlos Abel Olivera Rodríguez (2007) umcc.
Annex # 2: Fig. # 6. Strategy levels or hierarchy of strategies.
Strategy levels or hierarchy of strategies.
Source: Business Strategy: basic elements for its design, implementation and control. Dr. VC Díaz Pontones and MSc. MA Ramírez Reyes, School of Hospitality and Tourism of Camagüey. 2005.
