IMPORTANCE OF STRATEGIC MANAGEMENT
IMPORTANCE OF STRATEGIC MANAGEMENT:
• Shows the right direction to the organization
• Helps companies or organizations to turn proactive rather than reactive
• Guides the companies to prepare and face the challenges which may occur in future
• Plays an important factor in decision making
• Make sure to fight the competitions and have long term survival assurance
• Have a competitive edge over the market
• Last but not the least, helps in business development and success
Why values are important for strategic planning
When we talk about creating a strategy, the first part of the process is determining where your organization is going, and how it’s going to get there: your vision and mission.
Once you have defined your vision and mission, (the where and the why) then you can start the action stuff that moves the strategy forward and helps you achieve your goals. Your organizational values are the glue that keeps it all together.
Once you know where your organization is going, why you do what you do, and you have established a strategic plan, you then need your people on board to move everything forward. It’s easy to forget that there are people behind the charts and the numbers, and those people are driven by their own desires and purpose: your staff have their own personal vision and mission. Values alignment comes in two separate, but equally critical parts for high achievement:
1. The values of the organization as an entity are aligned, understood, and respected across departments and teams.
2. The values of the people within the organization are also aligned, understood, and respected.
You can iterate your values as part of your strategic plan and as part of your organization as a whole, but if they’re just words on a wall instead of the DNA of the people that roam the halls, your organization may struggle.
You might also have a culture, however if values are misaligned, it might not be the culture that you are going after.
Fostering culture across your organization through supporting aligned values is key.
If your organization and your people share the same values, you will:
• Follow the same rules
• Establish the same norms
• Develop mutual respect
• Have similar tolerances
• Share appreciations (from a purpose and destination standpoint)
Values are important for strategic planning because if everyone has the same values, passion and purpose when they come to work, then they are going to be working toward the same goal, regardless of what the strategic plan is.The hardest part of strategic planning is not figuring out what to do, it’s aligning your team and then doing what needs to get done to achieve your goals. If you have values alignment early, your strategic plan will be implemented much easier. If you ignore values alignment, you might still get your plan done, but it will likely cost more money, take more time, and cause more friction (Which means you’ll lose good people, or won’t be able to get them in the first place).
DISADVANTAGES OF STRATEGIC MANAGEMENT
Strategic management involves long-term plans and objectives that allow a company to leverage capabilities, increase opportunities, and achieve competitive advantage. Although there are many advantages to strategic management, such as reducing the resistance to change and promoting collaboration, there are also disadvantages. The strategic management process is complex, time consuming, and difficult to implement; it requires skillful planning in order to avoid pitfalls
A Complex Process
Strategic management involves continuous assessments of critical components, such as external and internal environments, short-term and long-term objectives, organizational structure, and strategic control. These components are interrelated, so a change in one component may affect other areas. For example, in an economic downturn, a company may need to reduce its workforce. The external factor, which is the poor economy, changes the internal environment, which is the number of people employed. Then, a company may need to review objectives and make necessary adjustments. All of these factors ultimately influence a company’s management, leadership and structural systems, which have a bearing on decision-making.
Managers spend a great deal of time preparing, researching and communicating the strategic management process, which may impede day-to-day operations and negatively impact the business. For example, managers may overlook daily issues needing resolution, and inadvertently cause a decrease in employee productivity and short-term sales. When issues are not resolved in a timely manner, higher employee turnover can result. This could force a company to redirect critical resources, putting strategic management initiatives on a sidetrack.
Difficult to Implement
The implementation process requires a clearly communicated plan, implemented in a way that requires full attention, active participation, and accountability of not only company leaders, but also of all members across the organization. Managers must continuously develop and improve synergies among employees to ensure buy-in and to garner support for the company’s objectives and mission. There are instances where this can become particularly challenging. For example, if a manager was involved in the strategic formulation process, but not equally involved in the implementation process, he in turn may not feel accountable for decisions made.
Requires Skillful Planning
Although strategic plans help reduce uncertainty in meeting long-term objectives, the planning process itself provides opportunities for missteps. An organization needs to anticipate the future, which involves various degrees of change as well as risks. In order to avoid pitfalls, managers need to have the right skill sets to plan the strategy and mitigate risk factors. For example, managers should monitor as well as develop business contingency plans to address possible future changes in the external environment, such as market conditions, competitive forces, and economic factors that may negatively affect the business.
In the recent years, most of the firms have understood the importance of strategic management – it plays a key role in the upbringing and downfall of any company. In a nutshell, we can conclude that the purpose of strategic management is possible if a company can provide dedicated resources and staff in order to formulate and implement the entire system.
If strategic management is implemented in the company thoroughly then there is no doubt that the company will survive all types of odds and competition and remain in the market for a long period of time. This is required in the present situation for all companies. It just calls for proper planning and right people in order to implement them in the company.
You need to keep a regular check on all external and internal factors affecting your industry; besides this check all your financial resources whether they are enough to expand your business. If you could keep in mind these things the implementation will become very easy and quick for any organization irrespective of their sizes.