To date, there is no unambiguous enough clear definition of the concepts of “strategic management.” Scientific articles give the most common definitions.
It is the sprout of determining the interaction of a crew with its encirclement expressed through the use of selected goals and achieving the desired result by allocating the resources of the crew in accordance with an effective plan of action.
The second definition is as follows. This is the spout through which managers set directions for the amplification of the crew, its specific goals, develop strategies for achieving them in the light of all possible circumstances, and adopt the chosen plan of action.
Here is the third one. This is the operation of a crew that relies on human potential as the basis of the crew, directs the production activity to the needs of consumers, flexibly reacts and conducts timely changes in crews that meet the challenge from the encirclement and allow achieving competitive boons, which together gives the crew the opportunity to survive in the long run, while achieving its goals.
Content of strategic management Plans
The content of strategic planning includes:
- determination of the purpose and main objectives of the firm’s business;
- strategic disquisition of the company’s external environment;
- a disquisition of its internal situation;
- selection and amplification of the business strategy;
- the disquisition of the portfolio of a diversified firm, the design of its structure;
- choice of degree of integration and control systems;
- operation of the complex “strategy – structure – control”;
- definition of standards of behavior and policies of the firm in certain areas of its activities;
- ensuring feedback of the results and strategy of the company.
The Essence of Strategic Planning Process
The essence of strategic management model is to rejoin three crucial interrogations:
- In what position is the enterprise currently located?
- In what position would it want to be in three, five, ten years?
- In what way to achieve the desired position?
To rejoin the first interrogation, managers need to understand the current situation in which the enterprise is located before deciding where to proceed. For this, an information basis is needed that ensures the sprout of making decisions with appropriate data for analyzing past, present, and future situations. The second interrogation reflects such a crucial feature as its orientation to the future. To rejoin it is necessary to clearly define what to aim for, what goals to set. The third issue relates to the incarnation of the chosen strategy, during which the two previous steps can be adjusted. The most crucial components or limitations of this stage are management system, structure, and personnel, which will implement the chosen strategy.
It is possible to underline five the most crucial task. They include:
- determination of the type of commercial activity and formation of directions of its amplification;
- the transformation of common goals into a specific area of work;
- skillful incarnation of the chosen plan to achieve the desired indicators;
- the effective incarnation of the chosen strategy.
In terms of its substantive content, strategic management essay addresses only the basic sprouts at the enterprise and beyond, paying attention to the opportunities for building up the potential of the enterprise. It is based on strategic decisions.
Such decisions are
- future-oriented and lay the foundation for the adoption of operational management decisions;
- connected the involvement of significant resources and can have extremely serious, consequences for the enterprise;
- and involve significant uncertainty, since uncontrolled external factors affecting the enterprise are taken into account.
These solutions include:
- reconstruction of the enterprise;
- introduction of innovations;
- changes in the legal form of the enterprise, the structure of production and management, new forms of a crew and pay, interaction with suppliers and consumers;
- access to new markets;
- the acquisition, merger of enterprises, etc.