Benefits of Strategic Management

Studies have revealed that organizations following strategic management have outperformed those that do not. Strategic planning ensures a rational allocation of resources and improves co-ordination between various divisions of the organization. It helps managers to think ahead and anticipate problems before they occur. The main benefit of the planning process is a continuous dialogue about the organization’s future between the hierarchical levels in the organization. In short, the most highly rated benefits of strategic management are:

• Clarity of strategic vision for the organization
• Focus on what is strategically important to the organization
• Better understanding of the rapidly changing business environment.

Strategic management need not always be a formal process. It can begin with answering a few simple questions:

• Where are we now?
• In no changes are made, where will we be in the next one year? Next two years? Next three years? Next five years?

Are the answers acceptable? If the answers are not acceptable, what actions should the top management take? With what results and payoffs?

Today as you know that business is becoming more complex due to rapid changes in environment. It is becoming increasingly difficult to predict the environment accurately. The internal and external environments of organizations are now driven by multitudes of forces that were hitherto nonexistent. Earlier the changes in technology were not so rapid but today the information from all over the globe is pouring in through the computers. The world in fact has shrunk. This has created fierce competition as the customers and stakeholders have become more aware of their rights.

The need is now to distinguish between long-range planning and strategic planning. The importance of strategic management in setting the directions for growth of organizations is being increasingly realized these days. The evolution of objectives after setting directions for growth of organizations has become necessary. The technique of strategic management is used as a major vehicle for planning and implementing major changes in organization. The implementation of the strategic plans needs good teamwork and understanding of the concept at grass root