Strategic management can be defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s goals. In a more fundamental way, strategy provides a roadmap to those in charge of taking the decisions and actions a company needs to achieve the right results within a competitive environment.
- Goal-directed actions to gain and sustain competitive advantage
- The quest to gain and sustain competitive advantage.
– It is the managers’ theories about how to gain and sustain competitive advantage.
– It is about being different from your rivals.
– It is about creating value while containing cost.
– It is about deciding what to do, and what not to do.
– It combines a set of activities to stake out a unique position.
– It requires long-term commitments that are often not easily reversible.
Strategy involves the planning, directing, organising, and controlling of a company’s strategy-related decisions and actions. In other words, it is the process involved with developing and executing strategies in order to achieve the business’ intended goals.
‘The field of strategic management deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments.’ (Nag et al (2007) Strategic Management Journal, p 944).
There are three distinct levels within a business, in relation to decision-making, of which managers from all levels will require to provide input in the strategicmanagement process. These levels are:
- Corporate (top) level: managers plan and develop strategies encompassing the entire business. These strategies are more conceptual, and include outlining the business’ goals and objectives. Managers are also required to make decisions regarding resource allocation, as well as oversee the implementation of strategies throughout the organisation.
- Business (middle) level: managers are responsible for a particular division within the business. Managers are required to adapt the conceptual strategies developed at the corporate level and create more clear and directive strategies for their particular division.
- Functional (bottom) level: managers are responsible for a particular function within a division, which involves a specific activity. Functional-level managers are required to turn the strategies developed by the corporate and business-level managers into actionable and achievable tasks within the operations of the business.