The Elements Of Strategic Management Business Essay
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Published: Mon, 5 Dec 2016
Strategic management is defined as a process of specifying the objectives of the organization, developing policies and planning to achieve the objectives, and then allocating resources so that plans can be implemented. Strategic management is considered to be the highest level of managerial activity that the Chief Executive Officer of the organization performs and also the executive team. Strategic management normally provides the overall direction of the entire organization. According to Durand, (2006), he describes strategic management as a set of actions and decisions that result to the formulation and implementation of approaches designed to achieve the objectives of the organization. This is a continuous process that is normally involved with the attempt of matching the organization with the changing environment in a manner that is advantageous. Strategic management is extremely critical in the survival of the organization. This paper will focus on discussing different aspects of strategic management and its impact to the survival of the organization. The paper will also discuss the importance of strategic management in home health care.
Elements of strategic management
Organizations are supposed to select the directions in which it will move towards. Strategic management has three major elements, which include strategic analysis, strategic choice, and strategy implementation.
Strategy analysis is usually concerned with understanding the organizationââ‚¬â„¢s strategic position. This is an element that is concerned with the changes that are going on in the environment and how the changes are going to affect the activities of the organization. Other factors that are considered in this element are the strength of the resources in the organization, in the context of the changes. It also focuses on what the associated groups in the organization aspire to and how the changes affect the present position and the future position of the organization (Durand, 2006). Strategic analysis usually aims at creating a view of the factors that can have an impact on the future and present performance of the organization. When strategic management is performed in the right manner, it helps in selecting the correct strategy.
There are certain factors that should be considered during strategic analysis. The first factor includes the environment. It is hard for organizations to exist without interacting with a complex, political, commercial, economic, social, cultural, and technological environment. The environmental, changes are sometimes complex for certain organizations than others. Therefore, when organizations are faced with the environmental changes, they should have a clear understanding of the impacts so that to be able to formulate a strategic plan. The central importance of strategic analysis is to understand the environmental effects to the organization (Durand, 2006). It is necessary to consider the environmental effects on the business and also the present and expected changes in the environment.
The second factor is the organization resources, which are internal influences. When thinking about the strategic capability of the organization, it is necessary to consider the weaknesses and strengths. The weakness and strengths of organizations can be identified by considering the organization resource areas like its management, physical plant, products, and its financial structure. This aims at forming an observation of the internal influences and restriction on the strategic choice.
The final factor is the prospects of the different stakeholders in that the development of the organizations depends a lot on the expectations of the stakeholders. The assumption and beliefs of the stakeholders greatly constitute them culture of the organization. A lot of influence in decision making concerning the strategy is normally influenced by the organizationââ‚¬â„¢s stakeholders and degree of the stakeholderââ‚¬â„¢s impact on the strategy depend on the respective power of every group of stakeholders (Durand, 2006). The beliefs and assumptions of the stakeholders are usually influenced by the resource and environmental implications. The influence that tends to prevail normally depends on the group that has the greatest power. It is extremely necessary to understand this as it helps in recognizing why the organization is following a particular strategy.
Consideration of the resources, expectations, environment, and objectives in the political and cultural framework of the organization provide the foundation for strategic analysis in the organization. In order to be able to understand the strategic position that the organization is in, it is essential to examine the extent of the implication and direction of the current strategy and the objectives the organization is following if they are in line with and can manage with the strategic analysis implications.
Strategic analysis usually creates a foundation for strategic choice. After strategic analysis has been done, it is now ready to make a strategic choice. Strategic choice is normally defined as the practice of selecting the best possible course of action, and it is usually based on the evaluation of the available strategic options. Strategic choice has three parts that include the generation of strategic options, evaluation of the options, and selection of the strategy (Heracleous, 2003). During strategic choice, there may be many strategic options; therefore, it is necessary to ensure that the selected option is the best.
The second part of strategic choice is the evaluation of the strategic options. Examination of the strategic option can be done in the strategic analysis so that to assess their relative merits (Heracleous, 2003). When the organization is deciding on any of the options, it might decide to ask several questions. The first questions that might be considered is the option built upon strengths, one that will take advantage of opportunities, and overcome weaknesses while it is minimizing threats that the business is faced with. By focusing on the following factors, it is referred to as searching for the suitability of the strategy. There are several questions that the organizations may consider when it is evaluating the strategic options.
The third part is the selection of the strategy which is the process of selection the options that the organization is going to pursue. Sometimes the selected choice is usually a matter of the management judgment. It is extremely essential to understand that, in the selection process, it cannot always be viewed as a purely logical, objective act. During strategic choice, the selected strategy is normally strongly influenced by the managerââ‚¬â„¢s values and other groups with an interest in the organization (Heracleous, 2003). This at one point reflects the power structure of the organization.
This is the third major element of strategic management that is concerned with strategy translation into action. This is the stage where the strategy is translated to action. The implementation of the strategy requires proper deployment of the organization resources, effective change management, careful handling of the possible changes in the structure of the organization, and also careful planning. There are several parts that are involved in strategy implementation. The first part is in planning and allocation of resources. During implementation, it is involved with resource planning that includes the logistic of implementation (Jones, & Hill, 2012). The second part is organization design and structure. During strategy implementation, there are certain changes in organization structure that should be done. It is also likely for the need to arise for adapting the system used in managing the organization (Jones, & Hill, 2012). The third part is the management of the strategic change.
When a strategy is being implemented, it also requires that the strategic change to be managed. Action from the managers is required in the way the change process will be managed and the mechanism that they are going to use. The mechanisms that the managers use are concerned with the redesign of the organization, changing daily routines and organization cultural aspects, and the political barriers to change.
The three elements of strategic management are interconnected in that in order for a strategic choice to be selected, there must be an analysis of options so that to determine the strategy that is going to be effective and efficient for the organization. Strategic implementation normally depends on strategic choice. The implementation of a strategy is normally done after different strategies have been considered so that a conclusion is arrived at on the choice that the organization will implement (Jones, & Hill, 2012). This is a choice that will accomplish the expected goal.
Strategic management in survival of organization
Strategic management has emerged as a primary value in helping organizations to successfully operate in complex, dynamic environments. In order for organizations to be competitive in the complex, dynamic environments, the organizations are supposed to be less bureaucratic and should be more flexible. In environments that are stable, competitive strategy involves defining the competitive position and then defending it (Cole, 2003). With strategic management, it allows companies to be more flexible. Organizations are supposed to develop in a strategically flexible way so that they can have the ability of shifting from a dominant strategy to another.
Strategic management is extremely necessary in organizations. When strategic management is employed in the organization, it helps the organization to formulate strategies that it will focus on in the changing environment. There are several factors that need to be considered when formulating strategies. One of the factors is the changing environment. Strategic management helps the survival of the organization because the management is able to formulate strategies in which will result to the success of the organization despite of the various barriers it might experience (Cole, 2003). In a business, environment is ever changing; therefore, there is the need to reflect if the organization will cope with the environmental changes. Because of the changes, it is likely for the strengths of the organization to also change. With strategic management, it helps the organization to consider whether the present strengths will continue to being strengths in different situations.
Strategic management is important because it gives people the opportunity to consider the goals of the stakeholders because the goals help in understanding the behavioral patterns and the impact they will, have in the future and present conditions. When all this factors are considered, it helps in developing a business strategy through the employment of strategic management (Cole, 2003). Strategic management is very essential as it is a method for developing, executing, and evaluating the organization strategy.
Strategic management help in the success of the organization which later result to the survival of the organization in the global market. With strategic management, it usually integrates experience and knowledge that has been gained in various functional areas. With strategic management, it helps the organization in understanding and making sense of the complex interaction found in various areas of management. With strategic management, organizations are able to plan ahead. When the organization is planning ahead, it has to make sure that it is planning the way in which it will stay long in the market and also be productive (Sadler, 2003). Strategic management normally gives the organization direction, sense of unity and direction towards the goal of the business. Therefore, strategic management proves to be important in the survival of the organization.
Strategic management usually enables the organization to achieve its goal in a manner that is efficient and effective. It has to consider the mission and vision of the organization. A strategic management process that is improved helps in facilitating the development of more complex management structures which the organization requires for its survival and growth (Sadler, 2003). This helps the organization in articulating, communicating and monitoring the strategy implementation by use of the interlinked system with the long term vision of the organization.
According Jeffs, (2008), formalized strategic management usually result to superior performance of the organization. Several studies have been conducted that indicate that organizations that are able to adopt strategic management have been able to improve their financial performance (Sadler, 2003). This is because, the organization is able to know the strategies that they will use so that they can be able to penetrate through the market and how they can adapt to the changing business environment. Strategic management is a powerful tool to the success of the organization whereby the value of its success lies on the executive and the ability of using the strategic management tool to manage the organization effectively.
Strategic importance to home health care
Strategic management is considered to be the collection of the ongoing processes and activities that an organization uses so that to systematically coordinate and align the resources and actions with the vision, mission, and strategy all through the organization. The activities in strategic management usually transform the static plan in the system that provides strategic performance feedback in decision making and enabling the plan to grow and evolve as the requirements and several other circumstances change (Stock 2009).
Home health care is the health care that is provided in the homes of patients by the health care professionals. Home health care is normally provided by personnel who are licensed. With this form of health care, patients are usually provided with care while at their homes. Home health care is of great advantage for many health care organizations and also patients because it aims at making it possible for people to remain in their homes instead of using institutional based nursing care (Naylor 2006). The services that are provided include professional health care services and also life assistance services.
The importance of home health care to health care organizations is that it helps in reducing the cases of avoidable re hospitalization. Most of the cases of patients who go back to hospitals can be avoided. This helps in reducing the cost that organizations may incur in admitting the patients (Panzer et al 2008). Home health care is also important because it helps in creating more space for other patients who cannot be treated at their home and must be admitted in the hospitals. In the United States, hospitalizations are found to account for almost two trillion dollars that are spent on health care. However, a large number of the patients who are hospitalized are the ones going back to the hospital even if their cases can be avoided.
Therefore, home health care is a better strategy for ensuring that the issues of over population in the health care organizations are reduced and that the hospitals can be able to provide the needed services to all patients. The use of home health care is a good strategy for saving the medical costs. The strategy for reducing the medical costs has resulted to a reduction in the length of hospital stays and early discharge of most of patients to home care (Panzer et al 2008).
Strategic management is a continuous process which is essential in the success of the organization. Organizations are supposed to make sure that they engage in strategic management because organization success and survival depend on strategic management. The strategic management approach of decision making derives both financial and non financial benefits. In order for organizations to be able to reap the benefit of strategic management, it is necessary for the workers and managers to have a good relationship.
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