Impacts of Strategic Management in Business Management - Research Paper Example

Impacts of Strategic Management in Business Management Introduction The economic environment is rapidly changing and economists characterize this economical change as globalization, changing investors and customers’ demands, and resulting in an increase in productivity-market competition. In order for business organizations to be able to compete fruitfully in this changing environment, they continually need to advance their performance through cost reduction, innovating processes and products as well as improving quality of product, productivity, and speed (Adair 45). Strategic management in a business organization is a continuous process that controls and evaluates the business organization and the industries, which it involves, makes competition assessment and sets strategies and goals to enable it meet all potential and existing competitors. The business organization, then reassesses each employed strategy quarterly and annually (regularly) to evaluate its implementation to determine whether it is successful or they are need of replacement with a new strategy, which will meet charged circumstances, new economic environment, new technology, new competitors, and new financial, social, or political environment (Adair 50). Attaining a competitive advantage and enhancing business performance relative to its competitors are the core objectives of a business organization. This paper purports to discuss how strategic management can affect business organization. Strategic management depends on the size of the business organization and its environment’s proclivity to change. This means that a global transnational business organization needs to employ more structured strategic management approach, due to the large size, operations’ scope, and encompass views and requirements of its stakeholders. Most of major management theories emphasize that private business organizations can exercise choice of strategy (Adair 52). The manner and way in which they face strategic issues may affect the overall development and growth of the business. Additionally, strategic management must address fundamental aspects such infrastructure constraints, resource base, appropriate technology level, and input of raw materials. Strategic management Impacts of Strategic planning and leadership in a business organization In terms of strategic planning functions, one can define it as an action employed by a business organization to achieve a superior performance in order to maximize its profits. Strategic planning is a part of strategic management, which assists a business organization to be able to determine the actions and decisions that are extremely important than others (Bryson 70). This enables a business organization’s management to create critical decisions on the most relevant things to attain organizational success. Strategic planning acts as a management tool that helps a business organization to focus on its energy review and amend its way in reaction towards the changing economic environment (Bryson 72). It gives the management team in an effort to create critical measures and decisions, and be able to direct the organization’s activities effectively. Strategic planning brings positive effects to any top business organization since it is significant to its competition and can boost the organization’s efficiency up to more that six times (Bryson 78). If well implemented, and conceptualized, strategic planning results to strategic management. Strategic management treats it as a pervasive tool for running and controlling a business organization. Strategic planning precisely entails resource allocation to ensure programmed activities in the business in a way that enables it to achieve intended goals in a dynamic competitive business environment. Therefore, strategic management is a team of actions and decisions that leads to the development and significant organization strategies, which help to achieve corporate goals and objectives (Eigenhuis and Rob 56). Strategic management can be seen as five P’S- plans, patterns, ploys, perspective, and position. The plan is a sort of intended action course. In this situation, strategic management enables business organizations to decide its goals and objectives and how to achieve them. Poor strategic management has contributed to the failure of many business organizations due to the current changing economic environment. A ploy is part of a strategic plan. The pattern is consistent processes and behavior that emerge because of strategic thinking, because of unintended or intended actions (Eigenhuis and Rob 58). Moreover, position refers to the acceptable location for a business organization in an economic environment. Strategic management enables a business organization to boil down to its services and products market position in the chosen market. This effectively enables the business organization to compete with its competitors successfully (Eigenhuis and Rob 59). An excellent example of an organization that has benefited from position planning is Nigeria Bottling Company (NBC). This company uses position strategy planning to compete with other soft drink industries. Perspective means examining internal factors of a business organization. Strategic management with an extremely high degree of perspective approach results in a management that shares vision and views hence making a positive impact towards business growth and performance. Strategic management is highly essential in business organization because it focuses efforts and promotes coordination of all business activities. Without strategic management, a business organization becomes a bunch of individuals (Bryson 85). Therefore, business organizations require strategic management since it ensures the concentration of efforts and collective actions towards achieving business goals and objectives. Strategic management helps in defining an organization’s activities to both outsiders and insiders. Strategic management as a plan, pattern, ploy, position, and perspective helps in defining an organization through the provision of proper understanding about the organization of people and serves as a tool of differentiating it from other business organizations (Bryson 88). A clear defined strategic management approach leads to enthusiasm among several stakeholders-suppliers, shareholders, customers, creditors, employees, and promoters. As a result, this promotes commitment that enhances better performance leading to organizational development and growth. Strategic management provides stability and consistency in a business organization. It focuses on behavior irregularity and aims at reducing uncertainty about the organizational operations. Strategic management resists environmental changes, therefore ensuring consistency (Bryson 82). This consistency gives an organization a sense of management control and relief from complexity anxiety. This does not necessarily mean a stationary or static situation but instead it implies a positive response towards the business environment, ensuring continual domination, stability, and retention of business and market leadership of the organization (Bryson 80). This enables the business organization to focus on its resources and exploitation of opportunities, skills, and knowledge to their fullest. An organizational strategic management determines the organization’s ultimate objectives in developing its management capabilities, corporate values, operational decision making, and organizational responsibilities at all hierarchical operational levels and across all functions and business lines of authority. Strategic planning and leadership Impacts of Strategic management on business performance Traditionally, a business organization related to increasing value of shareholders. In addition, an organization can measure its performance in terms of improved occupational health, safety performance, reduction in environmental footprint, increased customer satisfaction, among others. Strategic management positively influences organizational, financial performance. Therefore, the more a strategic management is formal, the more the performance of that organization will improve (Hitt, Ireland and Robert 67). Most economists continue to emphasize that employees are the most effective resources in any business organization and therefore, their valuable performance results to successful organizational performance. Therefore, strategic managers should implement effective management strategies that enable them to control employees as organizational assets, which are more productive. This is only occurs by ensuring strategic management in the business organization (Hitt, Ireland and Robert 69). Strategic management also joins the business values and organizational goals and objectives as well as its culture. Organizational culture is one of the critical aspects in a business organization, which can influence successful organizational performance. Therefore, strategic management emphasizes on organizational culture as well as offering training programs aimed at enabling employees to meet all organizational needs effectively (Hitt, Ireland and Robert 74). Strategic management in an organization also ensures that the organization meets all the requirements of technology advancement. Technology advancement contributes to varying approaches through which an organization performs business activities to attain a competitive advantage. Many business organizations nowadays make use of advance technology to add value to its products and other business resources. Many business organizations fail even if they integrate advanced technology due to lack of effective strategic management skills (Hitt, Ireland and Robert 77). For instance, many business organizations utilize electronic marketing to enable them reach a huge number of customers and reveal to them their products. However, due to lack of quality strategic management skills, these organizations end up incurring high cost, thus failing to achieve successful organizational performance. Strategic management in such situations, enables an organization to implement profitable technology strategies hence improving its performance. Additionally, strategic management ensures the use of sociological approaches and industrial organization, which are effective in ensuring business performance (Hitt, Ireland and Robert 79). Strategic management and business performance Advantages and disadvantages of strategic management The foremost advantage of strategic management is that it helps a business organization to improve its performance. Strategic management focuses on the future of the business- what should be? As such, strategic management serves as a guiding tool that steers the development of an organization (Kirchner 233). Strategic management can incorporate team and individual effort to accomplish organizational goals and objectives. Strategic management also helps to incorporate individual efforts to form a team effort. It assists in developing quality management as well as objective-oriented performance appraisal systems. Strategic management itself acts as a team. Finally, the process of strategic management transforms opinions away from distinct and separate projects. Although strategic management seems to be more advantageous to business organization, it also has some disadvantages as well. Strategic management tries to make future predictions. Unfortunately, the future cannot forever be predicted. A major environmental, financial, political, or social crisis can cause radically varying results from the ones predicted. Secondly, strategic management focuses on long-term goals. However, most investors have interest on short-term goals (Kirchmer 235). Therefore, strategic management often creates short-term losses to enable it create long-term values for the organization. Thirdly, strategic management leads to poor adaptability to environmental changes since it can make a business organization extremely rigid and bureaucratic leaving it unable to adapt to chances. The last disadvantage with strategic management is that, it is a difficult task. For a business organization to develop and implement strategic management, it must hire specialized and highly trained individuals, most of them being master degree or doctorate holders (Morrill 56). These individuals are often costly to employ hence forcing the business to incur extra expenses. Conclusion In conclusion, strategic management helps business organizations to determine the actions and decisions, which are more beneficial than others are (Adair 66). Much of strategic management has positive impacts to business organizations, hence improving organizational performance. In order for business organizations to be able to compete fruitfully in this changing environment, they continually need to advance their performance through cost reduction, innovating processes and products as well as improving quality of product, productivity, and speed. However, strategic management brings some negative impacts, which hinder organizational development and growth (Morrill 58). Work cited Adair, John E. Strategic Leadership: How to Think and Plan Strategically and Provide Direction. London: Kogan Page, 2010. Print. Bryson, John M. Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement. San Francisco, CA: Jossey-Bass, 2011. Internet resource. Eigenhuis, Ap, and Rob . Dijk. High Performance Business Strategy: Inspiring Success Through Effective Human Resource Management. London [u.a.: Kogan Page, 2007. Print. Hitt, Michael A, R D. Ireland, and Robert E. Hoskisson. Strategic Management: Competitiveness and Globalization : Concepts. Mason, OH [etc.: South-Western, 2007. Print. Kirchmer, Mathias. High Performance Through Process Excellence: From Strategy to Execution with Business Process Management. Berlin: Springer, 2011. Internet resource. Morrill, Richard L. Strategic Leadership: Integrating Strategy and Leadership in Colleges and Universities. Lanham: Rowman & Littlefield Pub. Group, 2010. Internet resource. Read More