Strategic management is a process of systematic evaluation of the nature of a business that: defines long-term objectives, identifies quantitative goals and objectives, develops strategies to achieve these objectives and locates resources to carry out said strategies. It is a powerful tool for diagnosis, analysis, reflection and collective decision-making, around what to do today and the path that organizations and institutions must travel in the future, to adapt to the changes and demands imposed by the environment and achieve maximum efficiency and quality of its services.
The strategic management process
Hitt, Ireland and Hoskisson, (p.6) express that strategic management is a process composed of the complete set of commitments, decisions and actions that a company requires to achieve strategic competitiveness and obtain an above-average performance. In this process, the first step of the company is to analyze both its external and internal environment to determine what its resources, capacities and core competencies are; that is, the sources of "strategic inputs." With this information you define your vision and mission and formulate your strategy. In order to implement this strategy, the company takes measures to achieve strategic competitiveness and obtain higher than average returns. The summary of the sequence of activities is as follows:Effective strategic actions occur in the context of carefully integrated strategy formulation and implementation actions lead to the desired strategic results. It is a dynamic process because the markets and the structures of the competition do not stop changing and must be coordinated with the strategic inputs of the company that never stop evolving.
The following figure presents a proposal that condenses the strategic management process:
The strategic management process. Source: Biasca, p.109
Strategic management in decision making
For Daft (p.239), strategic management is a set of decisions and actions with which strategies are formulated and implemented that will give a competitively superior fit between the company and its environment in order to achieve its goals. Executives ask themselves questions like the following: What changes and trends are happening in the competitive environment? Who are our clients? What products or services should we offer? How can we offer them more efficiently? » The answers to these questions help them make decisions about how to position their company in the environment against its rivals. excellent performance is not achieved by mere chance. It depends on the decisions the executives make. senior managers use strategic management to define overall direction,which constitutes the global strategy of the company.
Strategic management answers the question, What is our business?
According to David, (p. 5) strategic management is defined as the art and science of formulating, implementing and evaluating decisions through the functions that allow a company to achieve its objectives. The purpose of strategic direction is to exploit and create new and different opportunities for the future. The strategic management process has three stages: formulation of the strategy, implementation of the strategy and evaluation of the strategy.
Peter Drucker says that the main task of strategic management is to think through the overall mission of a company:
… That is, ask the question: "What is our business?" The answer to this question leads to goal setting, strategy development and decision making today for tomorrow's results; These activities should be carried out by the part of the company that has the capacity to visualize the company as a whole, balance current objectives and needs with future needs, and allocate key human and financial resources
Professor Antonio Verdú, from the Miguel Hernández University of Elche, shares the following video-course "Strategy and Strategic Management" in which he covers aspects such as the levels of strategy, strategic management processes, value creation, business mission and vision and competitive advantage, among other topics that will help you better understand the concept and importance of strategic business management. (59 videos - 4 hours)
Bibliography
- Biasca, Rodolfo E. Change Management: The Biasca Model, Outskirts Press, Inc., 2005. Richard L. Daft. Management, Thomson, 2004. David, Fred R.. Strategic Management Concepts, 2003.Michael A. Hitt, R. Duane Ireland, and Robert E. Hoskisson. Strategic Administration, 2008.
