For successful management of different enterprises, planning activities for the future is very important. The strategy helps to think through possible risks, to work out the ways of movement and development in order to become the best in the chosen activity.
What is the strategy in management?
The management function that applies to long-term prospects and actions is called strategic management. Thanks to the proper development of methods and their implementation, we can count on successful prospects. Many experts say that strategic management is the concept of survival among competitors. With the help of planning and action planning, you can roughly understand what the organization will be in the future: its position in the market, advantages over other companies, a list of necessary changes, and so on.
Describing what strategic management is, talk about the field of knowledge that deals with learning techniques, tools, methods of adoption and ways of implementing ideas. Use three sides of management: functional, process and element. The first considers leadership, as a set of certain activities that help achieve success . The second side describes it as an action to find and solve problems. The latter represents leadership, as work on organizing the interrelations of structural elements.
The essence of strategic management
The management function helps to find answers to three basic questions:
- First: "Where is the firm at the moment, that is, what niche does it occupy?" And it describes the current position, which is important to understand for choosing the direction.
- Second: "At what stage will it be in a few years?" And it helps to find an orientation for the future.
- The third: "What should be done to implement the plan?" And it is connected with the proper implementation of the enterprise policy. Strategic planning in management is focused on the future and helps to lay the foundation for solving operational issues.
The main types of strategies in the field of strategic management
Specialists distinguish four types of actions: reduction, intensive, integration and diversification growth. The first type is used if the company has been working at a fast pace for a long time and needs to change its tactics to improve productivity. Types of strategic management, implying growth, we will consider separately:
- Intense . Such a plan is more profitable than others in the case when the company has not yet deployed its activities in full force. There are three subspecies: a serious penetration to the market, expanding the boundaries of their own capabilities and improving products.
- Integration . Used when the company is firmly established in the selected sector, and it can move in different directions in it.
- Diversification . This option is suitable if there is no possibility to expand in the selected sector or if the entrance to another industry foreshadows great prospects and profit. There are three subspecies: the addition of similar goods, the inclusion of new positions in the assortment and the performance of works that are not included in the core business.
The difference between strategic management and management
In most cases, specialists compare the operational and strategic management. They differ in the main mission, so the first option is engaged in activities to obtain privileges, and the second - it plans to survive the enterprise in the future. Using strategic financial management, the manager is based on the problems of the external environment, and the operational focuses on shortcomings within the organization.
| Symptoms of comparison | Strategic Management | Operational management |
| Mission | Survival of the organization in the long term by establishing a dynamic balance with the environment, which allows to solve problems interested in the activities of the organization | The production of goods and services in order to obtain income from their sale |
| Solved problems | Problems of external environment, search for new opportunities in competition | Problems arising within the enterprise related to more efficient use of resources |
| Orientation | In the long term | In the short and medium term |
| The main factors of building a management system | People, the information system and the market | Organizational structures, techniques and technologies |
| Efficiency | Market share, sales stability, profitability dynamics, competitive advantages, adaptability to changes | Profit, current financial indicators, internal rationality and economy of work |
What is the purpose of strategic management?
According to the conducted research it was possible to establish that the firms that use planning in their work are successful and profitable. You can not find a business that could survive in a competitive struggle, without the existence of specific goals in the work. There are the main tasks of strategic management, which should be considered for success:
- Choice of activities and formation of directions in business development.
- Use of common ideas in a specific field;
- The right embodiment of the plan to get good results.
- Successful implementation of the chosen direction.
- Evaluation of results, analysis of the market situation and possible adjustments.
Functions of strategic management
Several interrelated functions are used and planning is the main one. The system of strategic management, through the definition of goals, establishes a single direction for development. Another important function is the organization, which implies the creation of a structure for the implementation of ideas. The notion of strategic management includes motivation, which implies stimulating each member of the enterprise, so that he copes well with his duties. To achieve success, no less important is the control of achievement of the set goals.
Leadership in strategic management
To become successful and create a profitable business, you need to combine two important positions: management function and leadership. They perform key, but different tasks. The first is necessary for the formation of stability, but the second one for carrying out changes. The effectiveness of strategic management lies in the successful implementation of ideas to achieve goals and success in work. Leadership affects the activities of employees, which directly affects the performance indicators, and helps to find new talented employees.
The main stages of strategic management
To develop a plan for the future, you need to go through several stages. First, the environment is analyzed to create a platform for choosing the direction of motion. Stages of strategic management include analysis of both internal and external environment. After this, the purpose of the work is determined and an action plan is formulated. Then comes an important stage - the implementation of the plan, but it is due to special programs, budget and procedures. At the end, the results are evaluated, during which the previous stages are often adjusted.
Tools of strategic management
To implement the planned plans, special tools are needed, which are methods of preparation and decision-making, different means of forecasting and analysis, and multiple matrices. In fact, strategic management allows the use of a huge number of tools, but the main ones are the following options:
- Matrix of the rationale for the strategy . They use it to analyze and correct the deficiencies in order to establish a connection between the arising trouble and the ways of its solution.
- Matrix of balance . With the help of this tool, you can identify the shortcomings, advantages and features of strategic management. In addition, they are compared with possible market risks.
- Choice of economic zones . This tool is used in connection with the diversification of production, which was provoked by competition and increased instability.
Strategic thinking in management
In order for the enterprise to be successful, the leading link should develop the thinking skills that help to translate ideas, solve problems, work in a team and so on. It is difficult to imagine an organization that would be built and operated without using the functions of management and planning. The analytical toolkit in strategic management includes five stages:
- Organization of the enterprise, which implies all employees, structure and resources.
- Observation to understand the motives of people's behavior, eliminate shortcomings and find the best among alternative options.
- Analysis of multiple points of view: the environment, the market, the project and the importance of the moment.
- Identify the driving forces, that is, the things that employees must devote the maximum amount of time.
- Formation of its own ideal position, which includes conditions for the efficiency of the enterprise and the niche of the market.
Problems of strategic management
Each company thinks through a strategy, and it does not depend on whether it was previously developed or originated during work. The main problems of strategic management are related to the fact that many do not know how to use its principles and most of the information is incomprehensible. This particularly applies to regional enterprises. This defect in most cases is solved by itself due to progress.
Companies that apply strategic management face the problem of the lack of technology to develop far-sighted goals. The solution lies in the fact that you need to independently form a strategy, focusing on the analysis done. Another drawback is the lack of an implementation mechanism, that is, it is important not only to build a development plan, but also to implement it correctly.
Strategic management - books
The problems mentioned that many people have no idea how to properly implement and schedule long-term plans, so the literature that provides the necessary information is relevant. Questions of theory and practice can be read in the works:
- A.T. Zub - "Strategic Management. System approach ยป .
- Arthur A. Thompson-Jr., AD Strickland III - "Strategic Management. Concepts and situations for analysis . "
- Ryan B. - "Strategic accounting for the manager . "