Understand its position in the marketplace
Moving forward with a sense of direction, purpose and urgency
Focusing on the key issues of customers, markets and the skills needed to deliver
There are very few organisations that do not require strategies. The few exceptions are companies situated in markets where there are no competitors. These companies are in total control of their direction, as they remain unaffected by changes in the marketplace and are situated in an environment that never changes.
It is stated that a company must have a strategy before anything else, even a product. This is because the strategy outlines where an organisation wants to be and how it will get there.
What is Strategic Management
Strategic management is a widely used process, especially in business as it appears to have a positive affect on how well an organisation is performing. For a manager to be strategically thinking he must acquire techniques such as, research, analysis, commitment, discipline and decision making. The manager must ensure that employees in their charge must fully understand the needs and objectives of the organisation and the best and most effective means of attaining these objectives. There are many accepted views on what is strategic management, as it is a widely discussed and researched area. Listed below are a couple of the accepted views.
The Contingency Theory by Hamel and Prahalad
The Design School by Porter and Mintzberg
Long Term Strategic Management versus Short Term
I believe that the most commonly used model by managers who are deemed to be strategically thinking is the SWOT analysis. This allows a manager to assess the Strengths, Weaknesses, Opportunities and Threats to their organisation and environment. It is recognised that every company has managers who think strategically. However, it is proven to be very difficult to have just one strategic manager. Many organisations have a small sub strategic management team. These are normally head’s of departments, who are looking to reach their own personal targets and not necessarily that of the organisation's. This could have an adverse effect on the direction of the company, as it may hinder the organisations progress in reaching its targets. Within a multi national organisation such as Rolls Royce Plc, there is one overall strategy in place, controlled by strategically thinking managers. However, this is a very broad strategy, so in order to compliment it a number of more defined strategic objectives within the area are compiled. These then filter into the main strategy in order to help the organisation reach its targets. Strategic management is found in most large companies. Most of these organisations have one overall management of strategy, setting the goals, objectives and mission statements. However, to achieve these targets, these ideas most flow down the hierarchical structure of the company, e.g. to marketing and human resources. These functions, in turn, have their own strategic manager, who then sets the departments targets in alignment with the overall strategy of the company. The department’s objectives are monitored by the manager of strategy within each area. These results are imparted to the organisations strategy department who then co-ordinate all data to ensure the company’s objectives are met.
What are the Boundaries Of Strategy and Strategic Management.
To answer this question one must need to understand the meaning of the word boundary. That is, marking the limit or border of an area.
In 1916 when Henri Fayol identified the following five functions :
Planning
Organising
Command
Co-ordination
Control
The boundaries of management strategy were set rigid, but as strategic management evolved by discussion and debate, the boundaries became more fragmented by the knock on effect of theories followed by counter theories. By discussion, new creative ideas were developed on the back of old theories, again widening the boundaries. Companies today are always looking to break down the boundaries of strategy and this is done by bringing in new ideas and if necessary re-organising the structure of the company. This is normally conducted by specialist consultants from outside the organisation. Another instance of boundaries expanding is that all companies are aiming to become more effective and efficient by improving their targets. A good example of this is when an organisation reaches its yearly missions and goals with relative ease. The company’s strategy is then reviewed and harder targets are established for the following year thus allowing the organisation to have a continual improvement.
The following can have an affect on strategic management boundaries.
Time - Because a strategy takes a long time to develop it will be no use to a company that requires short term results. Also once a strategy has been discovered a long time frame is required to allow the strategy to be implemented. In addition an organisation will not receive instant results from their newly established strategies, it could take as long as five to ten years before a positive effect is noticed. The only way to ensure that a strategy is successful is to constantly review the situation.
Communication - This can be a major boundary within any organisation. Once a strategy is established it must be communicated to all levels of the hierarchical structure in the most efficient way. A major problem within large corporations is that the communication gets misinterpreted as it is flowed down the employment structure.
Human Resource - This again is a boundary. If there are a large numbers of employees within the organisation it can obstruct the flow of strategy within the company. Often there are to many layers in an organisation, which could bring huge obstructions into the implementation of a strategy. These layers are extremely hard to split and remove once established.
Money - This can be the biggest boundary, because establishing and implementing a strategy is extremely expensive. Companies with cash restraints might not opt to pursue a strategy policy, due to the fact that it is a long term investment.
These are just a few of the boundaries that organisations face when implementing strategic management and policies.
Conclusion
In conclusion strategy management is extremely hard to define due to the topic area ever evolving. This is because of the vast ideas and theories on strategy management, all with their own thought and opinions. It is extremely difficult to establish what the accepted view is concerning strategic management. This is due to the fact that all the theories are different to an extent. However, at some point the theories all overlap as defined in the cultural web. So what are boundaries ? I believe boundaries are targets to reach and to overcome and then demolish again and again, thereby ensuring that the organisation is continually reassessing itself and expanding its goals and objectives. This will ensure that the company is continually striving to improve its performance and competitiveness. A company has to be creative and constantly honing its acumen if it wants to hold its own in today’s highly competitive market place. This is an analogy with a military campaign and brings us back to the original Greek meaning of the word strategy.
Bibliography
Johnson G. and Scholes, K (1999) Exploring Corporate Strategy. 5th Edition. Europe: Prentice Hall.
Oldcorn R. (1996) Management. Third Edition. Macmillan Press Ltd
