Benefits of Strategic Management - Case Study Example

Running Head: STRATEGIC MANAGEMENT Topic: Strategic Management Lecturer: Presentation: Introduction Businesses today are faced with various challenges due to globalization, rapid technological changes, increase competition and workforce dynamics. As such, managers are faced with tough decisions to make in order for the business to remain relevant in a changing environment. They have to come up with strategies that will help the organization to improve performance as well as gain competitive advantage. Strategic thinking which involves matching opportunities with available resources is therefore required leading to strategic management. According to Alkhafaji (2003 p 18), strategic management is the process of assessing corporation and its environment in order to meet long-term objectives through manipulation of opportunities and reduction of threats. It involves determining company objectives and formulation of strategies to achieve the set objectives. As we shall see in the rest of the paper, strategic management can also be applied in a health care setting. Components of Strategic Management There are four major components of strategic management namely; environmental scanning, strategy formulation, implementation and evaluation and control (Alkhafaji 2003 p 33). Environmental scanning entails assessment of internal and external factors that impact on company objectives. SWOT analysis is carried out whereby the strengths and weaknesses represent internal factors while opportunities and threats are external factors. Internal environmental factors relate to the workforce, finance and production processes among others. A strong workforce is an asset to the company as it increases productivity, performance hence competitive advantage. External factors such as competitors, technological changes, government policies also have great impact on company’s success. It is therefore important to scan the environment so as to predict the future direction of the organization. After scanning the environment, a manager can then set the mission, goals and objectives of the company although some companies start with setting the mission, goals and objectives. To achieve the objectives, strategy formulation is important. This involves planning on how the set mission, goals and objectives will be achieved. Policies are formulated that guide the decision making process and define direction of the business. Strategies formulated are for a long period of time mostly five years and should be flexible to allow changes prompted by environmental changes. The mission statement is important in strategy formulation as it defines the overall strategy of the business and the relationship between the organization and other stakeholders (Alkhafaji, 2003 p 13). It enables the employees, customers, suppliers among others to know the direction the business is heading hence gain commitment and as a result improved performance and competitive advantage. Mission should be clear and concise. All strategies to be formulated are based on the company mission where goals and objectives are derived from. The values and beliefs of managers also impact on strategy formulation. Good communication between stakeholders and management affects choice of strategies chosen. Managers should be able to appreciate change and involve employees in formulating strategies. Values also impact on mission setting for the company which is important in strategy formulation. After formulating strategies, the implementation begins. This involves assignment of tasks and responsibilities to staff aimed at achieving the set objectives. Tasks can be allocated to individuals or groups depending on the competencies and desired results. The interests of all stakeholders are put into account so as to satisfy them and gain their support in implementation and ensuring success of the strategies. Resource provision is also crucial as without resources, no implementation would take place. Feedback is given in order to know how it’s progressing. Implementation is followed by evaluation and control. This entails evaluating the success of the strategies. The predicted results are compared with actual result and ineffective strategies are changed and proper strategies put in place where required. The process is thus repetitive in order to formulate effective strategies. Good performance is rewarded so as to encourage employees to improve performance and achieve the set goals. Benefits of Strategic Management Strategic management is essential in healthcare organizations as it enables the management to set the direction of the business hence make proper decisions. It also enables the organization to establish its strengths and weaknesses as well as opportunities and threats and thus take advantage of available opportunities and be ahead of its competitors. By setting a vision, mission, goals and objectives, the employees are aware of the direction of the business hence become more committed to their duties and provide high quality services to clients. The patients on the other hand, will continue visiting the health facility as they are assured of good services through the mission statement and actual services given. The strategic management process is very crucial in decision making processes. It helps to establish an organization culture that takes care of its responsibilities to all stakeholders seriously. The management also has set vision and mission which they strive to accomplish hence all decisions are geared towards achieving the set objectives. Instead of making decisions on daily basis, a long period plan is made and policies formulated to guide the running of the business hence simple mistakes that can ruin the business are avoided. It also helps in planning resources and achievement of objectives hence increased returns. Improved productivity and customer satisfaction leads to improved financial performance of the business. The organization carries out a thorough scan of the environment frequently and hence it is able to overcome challenges brought about by environmental changes. The management is aware of any technological changes and any threats facing it hence change strategies before any damage is done. The organization is also able to act responsibly towards its employees, customers, suppliers, government and the community at large hence increase chances of survival (Alkhafaji, 2003).The organization also takes advantage of any arising opportunities and be ahead of the competitors. By analyzing its weaknesses and strengths, the organization is able to use its strength against competitors and try to minimize its weaknesses. Conclusion Amidst rapid globalization, environmental and economic changes, a company is able to maintain its competitive advantage through strategic management process. A health care organization is also faced with similar challenges and aligning its activities with strategic goals is a step forward in remaining competitive and providing quality services. Reference Alkhafaji, A. (2003) Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment. New York: Haworth Press, Inc. Read More