Introduction
In this strategic management module, it lays out on how to determine the strategic dilemma to form a corporate level strategy of an organization. Organizations with a strategic corporate level strategy tend to be more competitive and out perform their competitors in the market. As such, these organizations have clear path of how to position their business in the market and maintain certain advantage over their competitors. Furthermore corporate level strategy usually is in a 1 to 5 years horizon, it involves significant amount of resources and are not easily reversible. Therefore, it is important for an organization to form a strategic corporate level strategy through thorough research and determining their strength and weakness.
In every organization, there is usually more than one corporate level strategy that indirectly governs the direction of the management of the organization. The corporate level strategy determines the organizations overall purpose and scope which then flows down to functional business strategy which defines on how to perform successfully in the market and finally the operational strategy which delivers the corporate and functional strategy through the utilization of resources. At the end of the corporate level strategy time horizon, organizations will evaluate the current performance against the projected performance and they will have to find out the root cause if the performance of the organization is lower than the projected performance.
Strategic Management Discipline and Understanding of Life Experiences
Strategic management discipline teaches me about the dynamics of the corporate world. This is a process whereby leadership is viewed as an important and significant part of companies and how they operate. Personally, in order to run a business, I know that leadership is an expensive and as important as the entity itself. This is because the use of strategic management is more important than any other part and any other aspect of a company. Therefore, I have learnt that having strategic insight and oversight is a very important part of a company. A company will fail or succeed if it has a clearly defined strategic function that takes proper decisions to appropriately position the company in order to attain correct and optimal results in everything the company does.
My life experiences as a supervisor and a manager in some companies I have worked with is strongly modified and changed. This is because I did not really see beyond my immediate boss and his boring meetings which fetched him a huge remuneration. However, I now know the importance for that remuneration and the sensitivity of and vitality of things they discussed on such board meetings and high level interactions and discussions.
How Strategic Management Discipline is Helpful in Understanding Interactions in Business
The background readings I did indicated that strategic management has three main elements:
It involves top level leaders of the company - directors and senior managers;
It involves decisions that affect the entire organisation and
It is long-term and focuses on a period between 5 years and 10 years of the company
Therefore, I understand that strategic management is about the top level managers who are appointed by the shareholders and given a fiduciary duty controlled by legal authority under corporate governance laws. This is because it there is the need for ensuring companies are run in a faithful manner in a capitalist society. Since in such Capitalist societies, companies are required and allowed to pursue the best interest and highest levels of returns in order to meet the desire of shareholders to maximise their investments into a company. However, in this process, companies are limited by the laws of the land. And as such, they have to do things faithfully in order to meet the laws of the nation, maximise returns for shareholders and also respect the needs and demands of stakeholders.
Therefore, strategic management is about placing a company in the right context whereby it can meander through all the demands and expectations of the different interest groups that have a stake in the company. This allows a company to ensure the long-term survival and growth that will meet the highest and best levels of results for all parties involved equally.
Link between Strategic Management and Other Disciplines
The implementation of strategy involves the formulation of strategic business units (SBUs) and these are centres in an organization that work to meet the goals and expectations of the directors of the organization or entity. Strategic Business Units are ran by and utilized by the highest and best and most important persons who can achieve and carry out different activities required by the top level management.
Strategic Business Units are set up with an intention of achieving the best performance and operational standards defined by the directors in dealing with the needs to make profits. This includes units like Marketing, Finance and Information Technology as well as Operations. These different components of a business are operated in order to work and move the company to a strategically defined end. This includes the operation of different functions and procedures that are meant to achieve results and promote the best activities and results of the company.
Some units are important and pervasive in all organizations. Units like marketing and information gathering. This includes the gathering of information and consumer preferences and the presentation of products and other activities and features of the consumer base. Finance is an important part of a company because it records spending by the different units and this ensures accountability and probity of all units. Finance and management accounting also helps to build up costs and ensure the best and most important ways to use the resources of a company.
Operations is the core activities of the company and this optimises the solution that the company offers to the general public. Operations and other activities like research and development as well as Information systems all add up to the competitive posture of a company and its operations and procedures.
Strategic management offers an overall activity and process that brings together all the strategic business units and with an appropriate authority vested in these strategic-level leaders, there is the ability to organize them to provide optimal results to ensure sustainable productivity over a long period of time. Therefore, strategic management is an overall function and a top-level activity that ensures the highest and best results for a company at all levels and in all operations.
Applying Strategic Management to all Businesses
There are some general contexts and pointers of the strategic management process that can be transposed and applied to almost all businesses. This include the use of methods and tools like PESTEL Analysis to evaluate the external business environment. There is also the Porter’s Five Forces that can be used in promoting the best way of helping a company to be properly positioned in a given industry. Also, internally, there is always the need to conduct SWOT analysis and resource-based matching of the company with the external environment by internalizing the best interests at all points.
Strategic management comes with several pointers including a rigid and definite system and process of modelling strategic pointers and systems. This is done through the identification and application of a set of principles that the company might have to work in. Through this, there are corrective actions that are taken as and when it is necessary and important.
Secondly, there are emergent strategies. This include the use of flexible methods and processes that can be used as a means of gathering information and research data that can be used to proactively change and reposition the company as and when the time comes. The procedure is such that there will be a responsive method and system that will allow a company to change and improve the positioning from time to time. This is what causes a company to conduct regular board meetings and evaluate results in order to ensure that targets are met and new information and data are used as a means to reposition and redirect the company and ensure optimal results are achieved.
Different industries have different dynamics. This is because there are pointers of competitive advantage and strong procedures for achieving optimal results. Therefore, there is the need for the directors and senior management of a company to be knowledgeable of developing trends and new information and then make modifications and reposition the company as and when the need arises.
Conclusion
Strategic management is an important aspect of the corporate governance system. This is backed by corporate laws of nations to regulate the way companies are directed. This is coupled by the fact that shareholders pool their resources, invite directors and use their fiduciary and agency rights to run and direct affairs for the betterment of shareholders and all the other stakeholders. The role of strategic management is to ensure that a company does its best and operates in a way that brings it the highest and best returns in present and existing circumstances. This happens through continuous and proactive monitoring and evaluation of market conditions and the positioning and repositioning of the company. Thus, strategic management practice is about getting the top level management to work to achieve their best positioning and processes. Strategic management decisions and choices uses internal, external, intermediary and competitive tools that are used to conduct scans and make decisions. The decisions are for the entire company and this is transposed to all units through the use of Strategic business units that work to achieve the best results of the company.
References
Hill, C. W. L. & Jones, G. R., 2011. Essentials of Strategic Management. Mason, OH: Cengage.
Johnson, G., Scholes, K. & Whittington, R., 2012. Exploring Corporate Strategy. London: FT Press.
Pisano, G. P., 2015. A Normative Theory of Dynamic Capabilities: Connecting Strategy, Know-How, and Competition. Harvard Business School Technology & Operations Mgt. Unit Working Paper No. , 16(036 ).
Warren, K., 2015. Strategic Dynamics Course. [Online] Available at: http://www.strategydynamics.com/courses/strategy-dynamics-course/[Accessed 15 December 2015].
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