Strategic management is “the set of decisions and actions resulting in the formulation and implementation of strategies designed to achieve the objectives of an organization.”
Strategic management is the responsibility of top management in the organization. The top management includes the CEOs, Managing Directors, owners of the company. It is a systematic process because it covers the four major aspects of formulation, implementation, evaluation, and control. Strategic management has universal application as it is applicable to both business organization as well as the non-business organization.
Strategic management plays a very important role in business. It enables the business to face competition effectively. Various strategies are adopted to discourage new competitors from entering the market. Innovative strategies are implemented to increase the profits which will bring about gains for everyone associated with the business such as employees, investors, government and community.
Strategic management aims at achieving long-term organizational success. By conducting SWOT (strengths, weakness, opportunities, threats) analysis the business is ever prepared to deal with any eventuality. Strategic management focuses attention on the best results at the minimum cost. It raises the overall efficiency of the business.
It is also known to provide better quality decisions. Managers are involved in all levels of decision making. They take every precaution to arrive at result-oriented decisions. As they are similar to the problems, they are confident to work out appropriate solutions. One of the major responsibilities of strategic management is to make the rational allocation of resources both human and non-human.
It helps in accessing performance of the organization.
In case the current performance is falling short of the targets, corrective measures are suggested to improve the results. It also facilitates control in the organization. Strategic management helps in establishing coordination between individual objectives and group objectives.
Without coordination, no organization can work. It incorporates planning at all levels in working out strategic decision making. It also helps in improving the morale of employees. Strategic management makes ways to provide ideal working conditions as well.
All these points, therefore, state that strategic management is very important in an organization. Without it, the organization won’t be able to work efficiently.