Strategic management

At the present moment in world history nearly every nation must choose between alternative ways of life. The choice is too often not a free one. One way of life is based upon the will of the majority, and is distinguished by free institutions, representative government, free elections, guaranties of individual liberty, freedom of speech and religion, and freedom from political oppression. People work out their own destinies in their own way. Their help should be through economic and financial aid which is essential to economic stability and orderly political processes.

Strategic management is a strategic design for how a company intends to profit from its strategies, work processes, and work activities. It consists of internal and external analysis, strategy formulation, implementation and evaluation. A strategic approach is important because firms must constantly adapt to emerging technologies, respond to competitive pressures and changing customer preferences and operate in an increasing global marketplace. Companies may incorporate strategic management differently. In a start-up, for example, it may involve only the founder; in a more established company, it may be a more structured process involving managers from all levels of the organization. Focuses on two things:

Whether customers will value what the company is providing;

Whether the company can make any money doing that. Why is strategic management important? 1. It results in higher organizational performance. 2. It requires that managers examine and adapt to business environment changes.

3. It coordinates diverse organizational units, helping them focus on organizational goals. 4. It is very much involved in the managerial decision-making process. Strategic management process

Step 1: Identifying the organizations current mission, goals, and strategies. Mission: the firms reason for being and Goals: the foundation for further planning.

Step 2: Doing an external analysis - Focuses on identifying opportunities and threats.

Step 3: Doing an internal analysis- Assessing organizational resources, capabilities, and activities.

Step 4: Formulating strategies : -Develop and evaluate strategic alternatives -Match organizational strengths to environmental opportunities -Correct weaknesses and guard against threats

Step 5: Implementing strategies - effectively fitting organizational structure and activities to the environment.

Step 6: Evaluating results.

Types of Organizational Strategies

Corporate Strategies - Top managements overall plan for the entire organization and its strategic business units. Types of Corporate Strategies

Growth: expansion into new products and markets; Stability: maintenance of the status quo;

Renewal: redirection of the firm into new markets.

How to create strategic flexibility?

Know whats happening with strategies currently being used by monitoring and measuring results.

Encourage employees to be open about disclosing and sharing negative information.

Get new ideas and perspectives from outside the organization. Have multiple alternatives when making strategic decisions.

Learn from mistakes Analysis SWOT -- strength, weakness, opportunity and threat -- analysis is often used to assess a company's internal and external environment. Internal strengths and weaknesses may be in the areas of staffing, financial resources, organizational structure and product innovation. External threats and opportunities may include competitive pressures and regulatory changes. Flowing from this analysis is the strategic direction of the company, its mission, goals and objectives. Mission and vision statements define the company's values and goals for the internal stakeholders -- employees, management and owners -and the external stakeholders -- investors, customers and suppliers. Formulation Strategy formulation seeks to bridge the gap between what is internally available and what is needed to deal with external threats and opportunities. Depending on the size and complexity of the organization, strategy formulation is done at three levels: corporate, business unit and functional. Corporate-level strategy involves deciding the broad strategic direction of the company, including mergers and acquisitions. Business unit level strategy involves operational management, including project and product management, to meet customer requirements. Functional level strategy involves using marketing,

finance and other resources to meet the company's cost, profit and customer support objectives. Implementation Implementation of strategies formulated at the functional, business and corporate levels involves managing stakeholder relationships and organizational resources to drive the company toward meeting its short-term and long-term goals. Organizational control systems, such as information technology based enterprise resource planning and financial reporting systems, help make strategy implementation effective. Evaluation Evaluating organizational performance against goals and expectations is an important part of strategic management. Internal and external environments are not static: companies evolve, new competitors come into the market and new regulations are introduced. Managers at all levels must have timely performance data available to evaluate the impact of their decisions and make the necessary adjustments. Developed by Harvard University professor Robert Kaplan and business consultant David Norton, the balanced scorecard model is a popular tool for performance evaluation. It helps companies achieve their strategic objectives in four ways. First, operational metrics are developed that translate general vision statements into specific and measurable goals; second, the strategy is communicated widely so that employees understand their individual roles in meeting the performance objectives; third, budgeting is linked to strategic planning so that the resources are there to support organizational priorities; and finally, continuous feedback helps managers assess the effectiveness of their strategies throughout the implementation process. What is a strategic plan? In strategic planning it is critical to formally consider how your organization will accomplish its goals. The answer to this question is a strategy. There are a variety of formal definitions for strategies, but everyone fundamentally agrees

that a strategy is the answer to the question, "How?" "Strategies are simply a set of actions that enable an organization to achieve results." MAP for Nonprofits, St. Paul, MN. "Strategy is a way of comparing your organization's strengths with the changing environment in order to get an idea of how best to complete or serve client needs." Jim Fisk & Robert Barron, The Official MBA Handbook. When should a strategic plan be developed? Strategy development follows the creation and affirmation of the organization's purpose statement, environmental and program data collection and analysis, and identification of critical issues. It is critical that strategy development follow these steps because the information gathered and decisions made in these phases are the foundation for strategy creation and selection. Each of these steps provides the following: The purpose statement, the statement of the organization's ultimate goal, provides the direction to which the strategies should ultimately lead. What are some tools for for analysis and planning? A number of analytical tools have been developed to assist organizations with the planning process. Many nonprofit organizations have adapted these tools, modifying the questions and criteria to align with their own specific services and markets. Listed below are analytical tools frequently used by nonprofit and for-profit organizations.

What is an information strategy? An information strategy describes the overall direction and general framework in which the organizations information resources and processes should be managed so that the organization would achieve its most important goals. An Information Strategy typically consists of the following: IM goals and objectives that are well aligned with the organizations mission and vision IM principles that articulate desirable outcomes and form the foundation for developing information policies One or more areas of strategic focus: this could be some critical information content; common information to be shared; some information-intensive process; or new information-based products or services.

Why do strategic plans fail? 1. 2. 3. 4. 5. Failure to understand the customer Why do they buy? Is there a real need for the product? Over-estimation of resource competence Can the staff, equipment and processes handle the new strategy? Failure to obtain employee commitment New strategies are not well explained to the employees No incentives for the workers to embrace the new changes Failure to follow the plan No follow through after initial planning Failure to manage change Lack of vision on the relationships between processes, technology

and organization 6. Poor communications Insufficient information sharing among stakeholders

The Challenge of Boundaries All government agencies are define in part by their geographical and organizational boundaries. Many of them are now challenging their boundaries. Technological expertise Modern transportation and communication The emergence of competition

The Challenge of Service The move toward customer service is a revolutionary change in government thinking. The Service First team has established six service standards for government: Answer letters quickly and clearly. See people within 10 minutes of their appointment time Provide clear information about services and at least one telephone number for inquiries. Consult users regularly about the service provided and report on the results Provide at least one complaint procedure for services provided and send information about this procedure as requested. Do everything reasonably possible to make services available to everyone, including those with disabilities

The Challenge of the Public Interest Designing services to meet the national interest as opposed to sectional, regional, staff, or staff interests is a major strategic challenge. One useful technique is to prepare a list of an organizations community service obligations with identification of costs and beneficiaries.

Performance Management Performance Management is the specification of clear and measurable organizational objectives, the systematic use of performance indicators to assess organizational output, the application of performance appraisal of individual employees to reward exceptional personal efforts toward organizational objectives.

It includes the use of performance incentives and the linking of human and financial resource allocation to an annual management or budget cycle. Furthermore, regular review at the end of each planning cycle consists of the achieved goals and the reasons for performance.

Strategic Management in Tourism The subject of strategic management is often taught as a core topic at some stage during a tourism degree programme. It also acts as a key feature of postgraduate tourism degree programmes. There are many generic strategy resources that exist, these are predominately manufacturing related, and specific subject resources focusing on tourism service contexts can be difficult to fiind. It is important that accessed resources enable their wider understanding of the subject matter and create opportunities where theory can be effectively applied to practice. Organisational Culture and Strategy The cultural ethos and orientation of a firm is significant in the strategic development of an organisation. A static culture that is reticent to change is likely to cause the organisation to suffer from strategic drift and be unable to keep apace of the dynamic competitive environment. Managing Strategic Change The selected organisational strategy and related method will often initiate a process of change within the organisation. For example, an organisational merger or acquisition will inevitably create a bringing together of two cultures that may, in some instances, result in a culture clash. Therefore, the process of change needs to be managed carefully to ensure the successful implementation of the strategy.

Overall, Strategic Management is an ongoing process that evaluates and controls the business and the industries in which the company is involved. It assesses its competitors and sets goals and strategies to meet all existing and potential competitors. It reassesses each strategy regularly to determine how it has been implemented and whether it has succeeded or needs replacement to meet new technology, new competitors, a new economic environment., or a new social, financial, or political environment.