Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes. Strategy is defined as “the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.” Strategies are established to set direction, focus effort, define or clarify the organization, and provide consistency or guidance in response to the environment.
Strategic management involves the related concepts of strategic planning and strategic thinking. Strategic planning is analytical in nature and refers to formalized procedures to produce the data and analyses used as inputs for strategic thinking, which synthesizes the data resulting in the strategy. Strategic planning may also refer to control mechanisms used to implement the strategy once it is determined. In other words, strategic planning happens around the strategic thinking or strategy making activity.
Strategic management is often described as involving two major processes: formulation and implementation of strategy.
Strategic management is the process in which management implements a plan or strategy that maximizes the utilization of resources for the benefit of the organization. Often times companies implement a plan, but fail to execute a process that measures performance on meeting and achieving goals. The strategic management plan should be used as a general blueprint of the direction of the organization, which includes a strategic analysis, such as — SWOT (strength, weaknesses, opportunities and threats). And successful plans need to be flexible and innovative in order to adapt to complex fluid environments.
The term strategic is defined as a process by which an organization creates a plan or strategy that is designed to generate a positive outcome. Management is defined as the organization of processes within an enterprise based on specific policies designed to achieve stated objectives. Integrate the terms, strategic management, and you create a process for analyzing internal (strengths and weaknesses) and external (opportunities and threats) factors affecting the organization and provide a method for executing the strategy for the purposes of maximizing beneficial outcomes based on stated objectives. When conducting the strategic analysis either a “values” or “SWOT” analysis is required depending on the enterprise.