Knowledge is the most powerful strategic tool of successful organizations. Knowledge of changing technology assists in creating new products, processes or services. Knowledge about changing preferences of customers can give an organisation a competitive edge. Industrial economies will be more and more dominated by computers in terms of web sites and networks containing information about various aspects of the external environment and this information will become very crucial for survival and growth of the company, The labour will have to be more skilled and knowledge based in order to be innovative to meet the challenges of the competition and innovation would be a critical factor in strategic success.
Technological Changes: Changes in technology in practically all industries have been dynamic and strategic managers must be prepared to adapt to these changes and be innovative to maintain their strategic advantage. New technological developments such as cellular phones, laptop computers, satellite communications, electronic networks for online communication, fax machines, robotics, computer aided designs (CAD) and computer aided manufacturing (CAM) have been instrumental in improvements in product technology, process technology and information technology.
Managers must not only embrace change and learn how to manage it, but they must also ensure that all organisation members become a willing part of the changed internal environment. These fast and dynamic changes pose a tremendous challenge to strategic management and it must learn to adapt to these changes successfully and must be able to “thrive on chaos”.
Diversity in the Workforce: As the international economy increases competitive pressures, the organizations must draw on the skills of the workers, irrespective of their race, culture, creed or sex. The demography of the workforce is changing and will continue to change. A high percentage of the workforce of the future in America will consist of women and ethnic minorities. It is expected that by the year 2005, half of all labour force entrants will be women and more than one-third will be Hispanics and African-Americans. Strategic management will have to face the challenge of bringing the people of different backgrounds, cultures and values into cohesive work teams.
The workforce of the next millennium will be highly heterogeneous and the management will face the challenge of enabling such heterogeneous workforce to perform to its potential in an equitable work environment where no one group or individual has an unfair advantage or disadvantage.
Complexity of the Strategic Management Environment
Rapid changes in the business environment are increasing its overall complexity. Accelerating rate of change, increasing competition at a global level, unstable economic conditions, resource shortages, knowledge expansion, demographic mobility and increased expectations of all constituencies in terms of higher quality in products and services are all elements that are going to add to the complexity of business environment. Strategic management will need to formulate and reformulate strategies and policies to deal with more and more variables and fast changes occurring in the values of this variable.
