Strategic management is basically needed for every organization and it offers several benefits.
Why Corporate Strategy?
Strategic management is basically needed for every organization and it
offers several benefits.
Strategy refers to a complex web of thoughts,
ideas, insights, ex-periences, goals, expertise, memories, perceptions, and
expectations that provides general guidance for specific actions in pursuit of particular ends. Nations have, in the management of their national policies, found it necessary to evolve strategies that adjust and correlate political, eco-nomic, technological, and psychological factors, along with military ele-ments. Be it management of national polices, international relations, or even of a game on the playfield, it provides us with the preferred path that we should take for the journey that we actually make.
Keeping Pace With Changing Environment
The present day environment is so dynamic and fast changing thus making it very difficult for any modern business enterprise to oper-ate. Because of uncertainties, threats and constraints, the business cor-porations are under great pressure and are trying to find out the ways and means for their healthy survival. Under such circumstances, the only last resort is to make the best use of strategic management which can help the corporate management to explore the possible opportuni-ties and at the same time to achieve an optimum level of efficiency by minimizing the expected threats.
Minimizes Competitive Disadvantage
It minimizes competitive disadvantage and adds up to competitive advantage. For example, a company like Hindustan Lever Ltd., realized that merely by merging with companies like Lakme, Milk food, Ponds, Brooke bond, Lipton etc which make fast moving consumer goods alone will not make it market leader but venturing into retailing will help it reap heavy profits. Then emerged its retail giant “Margin Free’ which is the market leader in states like Kerala. Similarly, the R.P. Goenka Group and the Muruguppa group realized that mere takeovers do not help and there is a need to reposition their products and reengineer their brands. The strategy worked.
Clear Sense of Strategic Vision and Sharper Focus on Goals and Ob-jectives
Every firm competing in an industry has a strategy, because strat-egy refers to how a given objective will be achieved. ‘Strategy’ defines what it is we want to achieve and charts our course in the market place; it is the basis for the establishment of a business firm; and it is a basic requirement for a firm to survive and to sustain itself in today’s changing environment by providing vision and encouraging to define mission.
One should note that the labor
efficiency and loyalty towards management can be expected only in an
organization that operates under strategic management. Every guidance as to
what to do, when and how to do and by whom etc, is given to every employee.
This makes them more confident and free to perform their tasks without any
hesitation. Labor efficiency and their loyalty which results into industrial
peace and good returns are the results of broad-based policies adopted by the
Strengthening Decision-Making Under strategic management, the
first step to be taken is to identi-fy the objectives of the business concern.
Hence a corporation organized under the basic principles of strategic
management will find a smooth sailing due to effective decision-making. This
points out the need for strategic management.
Efficient And Effective Way Of Implementing Actions For Results
Strategy provides a clear understanding of purpose, objectives and standards of performance to employees at all levels and in all func-tional areas. Thereby it makes implementation very smooth allowing for maximum harmony and synchrony. As a result, the expected results are obtained more efficiently and economically.
Improved Understanding of Internal and External
Environments of Business
Strategy formulation requires
continuous observation and under-standing of environmental variables and
classifying them as opportuni-ties and threats. It also involves knowing
whether the threats are serious or casual and opportunities are worthy or
marginal. As such strategy provides for a better understanding of environment.
Tags : Strategic Management - Concept Of Corporate Strategy
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