Strategic management

Strategic management is of vital importance as CEOs and managers have to constantly reassess their strategy management models and implement change and improvement wherever needed. Premiercallcentre.co.uk provides independent professional strategic management services, fully managed to help your business needs. We are an expert in call handling services and our staff whom are based in our UK site, are on hand to answer your call for any strategic management questions you may have.

To understand the true importance of strategic management, you need to know about the most effective strategies available to you and also build your knowledge on strategic management theory that has been tried and tested by the experts.

Every manager is familiar with the acronym KISS or ‘Keep It Simple, Stupid’ in full. Simplify a process or a strategy, and you make them easier to implement. Go for a complex and complicated solution and you greatly increase the chances of going seriously wrong.

KILS or Keep It Lean, Stupid is a very close relative to KISS - and the alternative to KILS can literally kill a business. On the other hand, leanness is life: indeed, a whole new way of business life. Try these three deceptively simple questions for a start:

• Just how old is the information you are acting on today?
• How many days ago was the order triggered that you are now producing?
• And how many days ago did the customer ring up about the problem you are now fixing?

What is Strategic management?

Strategic or institutional management is the conduct of drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. It is the process of specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives and then allocating resources to implement the policies, and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives.

Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency".

Strategy formulation

Strategic formulation is a combination of three main processes which are as follows:

• Performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both micro-environmental and macro-environmental.
• Concurrent with this assessment, objectives are set. These objectives should be parallel to a timeline; some are in the short-term and others on the long-term. This involves crafting vision statements (long term view of a possible future), mission statements (the role that the organization gives itself in society), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives.
• These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to achieve these objectives

Strategy implementation

• Allocation and management of sufficient resources (financial, personnel, operational support, time, technology support)
• Establishing a chain of command or some alternative structure (such as cross functional teams)
• Assigning responsibility of specific tasks or processes to specific individuals or groups
• It also involves managing the process. This includes monitoring results, comparing to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, and making adjustments to the process as necessary.
• When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with (and/or conversion from) legacy processes.

Thus, when the strategy implementation processes, there have been many problems arising such as human relations and/or the employee-communication. At this stage, the greatest implementation problem usually involves marketing strategy, with emphasis on the appropriate timing of new products. An organization, with an effective management, should try to implement its plans without signaling the fact to its competitors.

In order for a policy to work, there must be a level of consistency from every person in an organization, including from the management. This is what needs to occur on the tactical level of management as well as strategic.

Strategy evaluation

• Measuring the effectiveness of the organizational strategy, it's extremely important to conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to figure out the strengths, weaknesses, opportunities and threats (both internal and external) of the entity in question. This may require to take certain precautionary measures or even to change the entire strategy.

Knowledge-driven strategy

Most current approaches to business "strategy" focus on the mechanics of management -- e.g., Drucker's operational "strategies" -- and as such are not a true business strategy. In a post-industrial world these operationally focused business strategies hinge on conventional sources of advantage have essentially been eliminated:

• Scale used to be very important. But now, with access to capital and a global marketplace, scale is achievable by multiple organizations simultaneously. In many cases, it can literally be rented.
• Process improvement or “best practices” were once a favored source of advantage, but they were at best temporary, as they could be copied and adapted by competitors.
• Owning the customer had always been thought of as an important form of competitive advantage. Now, however, customer loyalty is far less important and difficult to maintain as new brands and products emerge all the time.

In such a world, differentiation is the only way to maintain economic or market superiority (i.e., comparative advantage) over competitors. A company must OWN the thing that differentiates it from competitors. Without IP ownership and protection, any product, process or scale advantage can be compromised or entirely lost. Competitors can copy them without fear of economic or legal consequences, thereby eliminating the advantage.

Reasons why strategic plans fail

There are many reasons why strategic plans fail, especially:

• Failure to understand the customer

          - Why do they buy?
          - Is there a real need for the product?
          - Inadequate or incorrect marketing research

• Inability to predict environmental reaction

          - What will competitors do?
                + Fighting brands
                + Price wars
          - Will government intervene?

• Over-estimation of resource competence

          - Can the staff, equipment, and processes handle the new strategy?
          - Failure to develop new employee and management skills

• Failure to coordinate

          - Reporting and control relationships not adequate
          - Organizational structure not flexible enough

• Failure to obtain senior management commitment

          - Failure to get management involved right from the start
          - Failure to obtain sufficient company resources to accomplish task

• Failure to obtain employee commitment

          - New strategy not well explained to employees
          - No incentives given to workers to embrace the new strategy

• Under-estimation of time requirements

          - No critical path analysis done

• Failure to follow the plan

          - No follow through after initial planning
          - No tracking of progress against plan
          - No consequences for above

• Failure to manage change

          - Inadequate understanding of the internal resistance to change
          - Lack of vision on the relationships between processes, technology and organization

• Poor communications

          - Insufficient information sharing among stakeholders
          - Exclusion of stakeholders and delegates

Limitations of strategic management

Although a sense of direction is important, it can also stifle creativity, especially if it is rigidly enforced. In an uncertain and ambiguous world, fluidity can be more important than a finely tuned strategic compass. When a strategy becomes internalized into a corporate culture, it can lead to group think. It can also cause an organization to define itself too narrowly. An example of this is marketing myopia.

Many theories of strategic management tend to undergo only brief periods of popularity. A summary of these theories thus inevitably exhibits survivorship bias. Many theories tend either to be too narrow in focus to build a complete corporate strategy on, or too general and abstract to be applicable to specific situations. Populism or faddishness can have an impact on a particular theory's life cycle and may see application in inappropriate circumstances.

It is tempting to think that some elements of strategic management is for you when actually some could damage, us premiercallcentre.co.uk for more answers, we cover all aspects of this industry.