Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.
A strategy can be described as an action plan that provides a direction that has to be adopted by the organization in order to achieve its objectives. In this way, strategy is a decision-making choice and it involves the consideration of the strengths and weaknesses of the organization and also the external environment that has an impact on the organization. While in the past, strategy was mainly used by the military but now, it has become an integral part of the business organizations also. In case of business organization, a platform is required to consider the plans and policies that have been adopted by the competitors and then the plans of the organization have to be modified in such a way so that the superiority of the products or the services of the organization can be established. At the same time, strategy also helps in deciding the objectives of the organization as well as the way in which the resources of the organization have to be deployed in order to achieve these objectives.
In this way, strategy is related with deciding the long-term goals of the organization and also the adoption of a course of action and allocating the resources that are required to achieve these goals. Therefore a strategy is a broad plan that can be used to take the company to the position where it wants to be in future from the place where it is at present.
Features of strategy
There are certain basic features of strategies.
- A strategy comprises the general course of action that has to be followed by the organization in order to achieve its objectives.
- Strategy involves the choices that decide the direction and the nature of the activities that have to be performed by the organization in order to achieve these goals.
- Strategy also has to consider the tactics that are going to be used by the competitors. In this way, a strategy should not only be capable of achieving the objectives of the organization but at the same time, it should also be capable of countering the steps that are being taken by the competitors.
- A strategy should provide the right combination of internal and external factors. For this purpose, the sense and weaknesses of the organization and also the influence of external factors should be considered when making a strategy that can be adopted by the organization.
- A strategy can never be static. Therefore, a strategy may have to be changed or modified in view of the particular needs of the changing times.
- In some cases, searches may also involve contradictory action. Due to reason that a strategy depends on several different factors, a manager may have to take action immediately or may result in such action for a later date, depending on the situation.
- A good strategy is always forward-looking. This means that the strategy should always be future oriented. However the past actions can be used by a strategy for guiding the decisions that have to be made in future.
- Strategies are made by the top-level management of the company. On the other hand, the managers at the low level are expected to implement the strategies that have been decided by the top management of the organization.