What is strategic management?

It isn't easy to imagine an efficient company without a well-developed strategy. Not everything works flawlessly in a dynamically changing environment, but it is easier for the company to adapt to changes thanks to strategic management. Please find out more about it!

Strategic management is an element that active companies cannot function without it. Thanks to strategy, the company can constantly develop and stay ahead of the competition. An excellent strategy is a complete plan without which an organisation can quickly sink into the high seas of other companies.

Creating a professional and compelling business plan is related to understanding what strategic management is, which is the key to the company's success—increasing the company's value results in guaranteeing its stable development. The main goal of strategic management is to reduce the uncertainty surrounding the organisation. The decisions made by the top management are most often based on the methods and techniques supporting management used in conscious planning.

Strategic management - key aspects

Among the many different definitions of strategic management, certain aspects most often define what it is. By the KJB International Aid experts particular, it is:

  • planning horizon - a definition of long-term directions of continuous development of the company, reaching even from a few to several years. It depends on the industry and market dynamics;

  • goal thread - a set of values, mission, a vision of the company in the future, as well as strategic goals are the elements by which appropriate tactical actions are taken;

  • subject of management - the company is treated as a coherent whole, where strategic management integrates organisational functions and processes into one strategy, coordinating its operation;

  • management entity is a group or organisational unit dealing with strategic management, the so-called strategic top - supervisory board or management board.

Strategic management is a specific set of processes that allow you to react quickly to changes in the environment while creating and maintaining appropriate relationships between the company's strategic goals and the resources it has. In practice, managers use a set of guidelines when making decisions or specific actions in specific areas of the organisation. Among the distinguished regions, there are three levels of strategy development:

  • corporate-level - key decision-makers of the company are looking for methods to increase the value of the organisation through, among other things, diversification, acquisitions (mergers) or investments;

  • business (company) level - formulation of a strategy in this area consists mainly in selecting an attractive market offer, also a management method to achieve a competitive advantage in a specific industry;

  • functional level is a strategy implemented by managers of individual departments to optimise the company's operations.

Every manager dealing with defining the company's or department's strategy should answer three basic questions: where is the company at the moment, where it would be (what it wants to achieve), and how it wants to be there.

The process of formulating a strategy

Strategic management is, in a sense, an organisational cycle, and as you know, each process consists of several successive stages. When formulating the strategy, the following can be distinguished:

  • the stage of strategic planning in which strategic goals are set, supported by an earlier analysis of the present and future state of the enterprise. Then, an action plan is executed, based on which managers aim to achieve the target state. It is part of the management for which some formal techniques and methodologies have been developed to help.

  • the implementation phase of the strategy is the process of implementing the strategy. It is necessary to adjust the resources and operating conditions of the organisation to the guidelines set out in the action plan. It would be best if you did not stick too rigidly defined and planned implementation steps because it is necessary to refer to the actual conditions of the company, which can change relatively quickly. Often, higher-order goals may turn out to be less critical than assumed. During this stage, the organisational structure, management system and budget planning are selected.

  • the strategy supervision and control phase is an integral part of strategic management. Monitoring of current changes allows ensuring their compliance with the adopted assumptions as to the target state. Any