Strategic management is the process by which strategies and policies are put into action through the development of programs, budgets and procedures can be further explained that an organization’s objectives must be identified in order to develop such policies and plans. The Chief Executive Officer (CEO) and executive team should implement such plans. Strategic Management provides overall direction to the whole enterprise. The organization’s strategy must be appropriate for its resources, circumstances, and objectives. (Wheelen and Hunger 2006 p. 16.) Strategy can also be defined as the procedures involving development, drafting, implementation and assessment of multi functional decisions that are employed in an organization or firm so as it attains its short term and long term objectives, it’s the criteria used in specifying the firm’s mission, vision and developing of policies and plans and how to implement them with the goal of achieving the stipulated objectives. It further assigns resources for implementation of policies, plans, projects and programs. Traditionally strategic management has been employed on a local basis where the objectives and plans are not global oriented, but lately the traditional concepts have been embraced in a global manner i.e. extending the skills in a world scale perspective.
Global strategic management offers a clear insight on the effect of globalization in business management and organizations and hence it demands that managers should respond in the same or higher intensity in order to reap in the high benefits that come with it, Managers and CEO’S have to understand that the global phenomenon does not just come into play by making your firm global but they are required to develop models that embraces and resists strains from multinational networks of subsidiaries and ensure the models considers the required persistence of deep and momentous cross – national differences with these in play and appreciation of the diversity that exists across borders and continents politically, culturally and economically Global Strategic management can be achieved and dividends passed on to the investors.
Global strategic management involves a set on conceptual tools that help in navigating through the often contradictory and ambiguous mass of information, market, working staff and to sum it all up this all done and appreciated on an international platform. There exists a series of considerations that have to always be kept on the check and always be incorporated in the complex decision making procedures that characterizes this level of business management. Managers and business executives at this level have to appreciate the differences between the multi-domestic and global nature of running business at this level, traditional strategic management concepts which have proved successful in local setting have faced challenges on a global arena and given back futile results this in a way have led to extensive losses by the affected firms. With this in mind firms that are already running on a global setting or have this as a future goal have not only have or plan to have a solid global strategic plan that’s strictly tailored for the specific firm but have to in depth have a set of monitoring and evaluation criteria of exactly what type of global strategy is theirs and and will it earn them long-term profitability and value.
Due to the nature and extent of running global firms many management techniques are to be employed, this have to easily integrate all the different departments in a synchronized and harmonious manner, this in itself boosts the overall management and performance of the firm. Global management requires employee management from the department heads to the lowest staff on the command chains where each and every staff of each firm has to have a clear definition and understanding of the company’s objectives, mission and vision. While this is being done employees have to understand that with more powers comes extra responsibilities and hence part of the strategic management plans should involve sufficient management accountability, communications and oversight from the top executives and for this to be easily achieved and in a successful manner their responsibilities have to be broken down in processes and tasks that can be easily reflected in productivity and profitability terms. And to easily attain these and continuously motivate the employees in achievement of the overall company global objective direct communication channels should be created and lower placed staff should be encouraged to use the open communication means for the attainment of the goal and their role in it should be well appreciated. In addition since on a global perspective the employee’s base is wide and shares extreme cultural and relational ways of lives the global firms should be able to compliment this in their employees and not fight it this is an important motivational practice especially for the workers.
Global firms need to also employ a detailed study research and SWOT (Strength, weaknesses, opportunities and threats) analysis, and this should be done not on their already existing markets but on a wider and more challenging global perspective. The strength of the firms in a global arena need to be analyzed and in them more research should be done in order to maximize on their potential so as to enjoy the full benefits of being a global firm. The weaknesses on the other hand should not at any time be pushed aside since they define the loophole if hit well can drain the company back to the ground, hence all the weak links should be investigated and be well covered in a strong strategic defence mechanism. On the other hand the opportunities that openly lie and exist in the strategic plans of the firm need to be intelligently harnessed or tapped and full benefit accrued from them. Lastly like in the local business management global arenas also exposes the business to threats which are even more complicated than the local ones, hence when developing the strategic plan for the wider market a deeper scan is mandatory and once all are identified ways of curbing them in case anything crops up need to be developed, this had to be carefully done though since one might by fear scare away for rucuitive opportunities by not risking.
Some few changes also need to be considered when developing the global plan, increase in the number of staff in order to match the extensive work load that comes up with the global market, other mechanisms employed by firms is the change of brand names and adopting of new and re-branded tags that sell the firm as a global entity and is more convincing to the market. The marketing of the firm as a global entity also need to be done but extremely vigorous so as to expose the firm clearly to the markets especially the global market.
Political differences and interference’s have also been some of the most important factors for consideration in the development of a firm’s global strategic plans. The management has to take into consideration that the firms doesn’t perform under similar political backgrounds and in each country they are involved the case is extremely unique and its specific conditions need to be considered and thought of completely carefully since the differences experienced from one country to the other are important. Some of the most successful global firms even go to the extent of exchanging favours for business favours this has proved important and successful to those firms. In their planning the forms also employ social procedures which they serve the local communities with and this increases their popularity.
Competitive Tactics are also very important in global strategic management, even though the market increases with size, the players in the market also increase a firm need to develop means of staying afloat in the market. The tactics have to be modern enough and able to make the customers chose it over other competitors in the market. They should be tailored to each specific consumer in each country in a language, tone and tongue they understood.
Advantages of global strategic management
- Lower marketing costs
- Economies of scale in production and distribution
- Ability to leverage good ideas quickly and efficiently
- Helps to encourage ancillary industries to be set up to cater fo
- Uniformity of marketing practices
- Power and scope
- Consistency in brand image
- Helps to establish relationships outside of the “political arena”
From the above its clear that this and more benefits are obtained from global strategic plans and this can be easily seen from first the scope of the work the firm does, this brings in more returns from the economies of scale that can be obtained from this. They also encouraged interaction among other firms global ones and this opens up chances and experiences for expansion one firm is able to learn from another an hence improve on areas the firm was weak before. The extended demographic coverage done by this firms also makes them gain firsthand experience on handling large number of clientele, data, resources and hence from their large portfolios they can easily develop even to larger firms by expanding their global strategic plans.
The advantages gained from management of a firm on a international perspective range all over business management, and if the opportunities are carefully taken and the risks technically mitigated against the success of any company on a global perspective is very imminent and should be pursued though carefully by any developing firm from any location on the globe.
Disadvantages of global strategic management
- Differences in consumer response to marketing mix elements.
- Differences in consumer needs, wants, and usage patterns for different products.
- Differences in product placement at the market.
- Differences in administrative procedures of the company between different employees and the employer.
- Differences in the legal environment, some of which may conflict with those of the home market especially when dealing with countries in the developing world.
- Differences in brand and product development and the competitive environment.
- Differences in the institutions available, some of which may call for the creation of entirely new ones (e.g. infrastructure).
In a case where the global recession affect the developed worlds like our country,this may greatly affect the strategic management of the companies and this in turn affect different branches of the same company in different parts of the world, this is a great disadvantage.
Different parts of the world have different laws governing investment and some of the laws and rules are hard on the foreign investors,therefore creating a big setback to strategic management of the different companies.
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