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Sunday, December 12, 2010

Strategic Management

Strategic management is the highest level of executive intervention in an organization which has far reaching impact on the survival, sustainability and growth of the organization.

Importance of Strategic Management

Strategic management plays the most crucial and decisive role in respect of the following pertinent questions:
  • What an organization must do to become successful?
  • What should the overall approach to business execution be so that the organization continues to stay successful at what it does?
Right Strategy is Important - Execution of Strategy is Equally Important

Choosing the right investment opportunities is the first major decision for a corporation. Deciding on the overall investment strategy for the selected opportunities comes next.

Then comes putting the strategy into action by assigning personnel and resources. And finally, monitoring and correcting the execution is needed to ensure success.

End to End Strategic Management

Strategic Management involves following key activities:
  • Strategy Formulation
    • Evaluating alternative investment opportunities
    • Selecting the 'right' one based on the organization's capabilities and competencies
    • Identifying capabilities and competencies to be developed (in support of 'existing' and 'new' business objectives)
    • Allocating budgets and setting performance targets on projected returns
  • Strategy Deployment
    • Focusing on execution
    • Building and sustaining capabilities and competencies
  • Strategy Evaluation (which drives changes to strategy formulation and deployment)
    • Reviewing actual progress versus performance targets
    • Taking corrective actions or adjusting performance targets

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