Question: Write the Functions, importance, pitfalls of Strategic Management Definition of Strategic Management

Strategic management is the process of evaluating cross-functional alternatives, deciding on the best alternatives, setting future objectives and taking action to achieve those strategic objectives.

Strategic Management Functions

Strategic management benefits a firm in several ways. Specifically it has four functions: identifying strategies, creating strategic plans, implementing strategy and monitoring strategies. Managers should familiarize themselves with these four functions so that they can understand the ways that strategic management can be used within their respective organizations. Defining Strategy
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The first function of strategic management is to define the firm's strategy. Usually, this is decided at the top of the firm, by the board of directors, chief executives or owners. Strategy definition involves deciding what the purpose of the firm is and what goals it should aim to achieve. Although this takes place at the highest level of the organization, it often involves the input of front-line workers.

Developing Strategic Plans

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Another function of strategic management is to develop strategic plans. Strategic plans serve to convert the firm's goals into reality. For example, a firm might have the strategic goal of increasing revenues. There are a variety of strategic plans that can be used to achieve this goal, such as entering a new market, increasing market share or developing new products.

Strategy Implementation
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One of the most important functions of strategic management is the implementation of the firm's strategy. Implementing a strategy can be difficult because people tend to resist changes. Implementing a strategy involves securing the help of influential people in the business who can influence people and encourage them to accept the changes. Due to the importance and difficulty of implementation, it may take place in several stages over a prolonged period of time.

Monitoring Strategies
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The final function of strategic management is to monitor the strategies that have been implemented by the firm. This involves identifying the intended results of the strategies and collecting data to see if the results are positive. For example, if the firm decided to implement a strategy with the goal of increasing profits then the managers would simply monitor the profit levels to see if they improve. When strategies do not have the desired results, it becomes necessary to adjust them.

Importance of Strategic Management

Strategic management means planning your business to the utmost. It involves setting goals and creating in-depth, step-by-step methods by which you can achieve these goals. Anything and everything that your business requires to achieve success needs to be incorporated into your strategic management. It is a comprehensive process that is lengthy but ultimately rewarding. Setting Goals
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Strategic planning is the process that produces key decisions that dictate the identity and purpose of a company or organization. This includes the formulation of goals. These goals will direct the energy of the company in a specific direction. Without strategic management and planning, most companies will not achieve success.

Achieving Goals
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Defining your goals is just part of strategic management. Once you know what your goals are, you need to create a step-by-step process by which you can achieve them. The attainment of these goals means that you are fulfilling the vision of your company's identity that you initially created when you began the strategic management process.

Designating Resources
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Once you have determined your goals and processes, you will have an idea of what resources are required for both. The term "resources" can be applied to anything you need to achieve your goal--manpower, funding, knowledge or skill sets. Strategic planning allows you to determine which resources you require from the get-go, drastically easing the whole process of attaining your goals.

Expecting the Unexpected

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As with any situation in life, unexpected scenarios arise. While a plan should be implemented, there is a certain amount of "rolling with the punches" that is required. Strategic management means that you may need to react to dynamic situations that you didn't foresee. Place contingency plans into effect--you may lose a critical resource or you may get sued, but you're prepared for anything and everything for which you're not prepared.

The Pitfalls of Strategic Management

The Future Doesn't Unfold As Anticipated One of the major criticisms of strategic management is that it requires the organization to anticipate the future environment in order to develop plans, and as we all know, predicting the future is not an easy undertaking. The belief being that if the future does not unfold as anticipated then it may invalidate the strategy taken. Recent research conducted in the private sector has demonstrated that organizations that use planning process achieve better performance than those organizations who don't plan - regardless of whether they actually achieved their intended objective. In addition, there are a variety of approaches to strategic planning that are not as dependent upon the prediction of the future. It Can Be Expensive There is no doubt that in the not-for-profit sector there are many organizations that cannot afford to hire an external consultant to help them develop their strategy. Today there are many volunteers that can help smaller organizations and also funding agencies that will support the cost of hiring external consultants in developing a strategy. Regardless, it is important to ensure that the implementation of a strategic management process is consistent with the needs of the organization, and that appropriate controls are implemented to allow the cost/benefit discussion to be undertaken, prior to the implementation of a strategic management process. Long Term Benefit vs. Immediate Results Strategic management processes are designed to provide an organization with long-term benefits. If you are looking at the strategic management process to address an immediate crisis within your organization, it won't. It always makes sense to address the immediate crises prior to allocating resources (time, money, people, opportunity, cost) to the strategic management process.

Impedes Flexibility When you undertake a strategic management process, it will result in the organization saying "no" to some of the opportunities that may be available. This inability to choose all of the opportunities presented to an organization is sometimes frustrating. In addition, some organizations develop a strategic management process that become excessively formal. Processes that become this "established" lack innovation and creativity and can stifle the ability of the organization to develop creative strategies. In this scenario, the strategic management process has become the very tool that now inhibits the organization's ability to change and adapt.

Question: Importances of Business Policies

Importance of Business Policy The following are the importance of business policy:
For Learning The Course

Business Policy seeks to integrate the knowledge and experience gained in various functional areas of management. It enables the learner to understand and make sense of the complex interaction that takes place between different Functional areas.
For Understanding The Business Environment

Regardless of the level of management a person belongs to,Business policy helps to create an understand of how policies are formulated. This helps in creating an appreciation of the complexities of the environment that the senior management faces in policy formulation.
For Understanding The Organization

Business Policy presents a basic framework for understanding strategic decision making while a person is at the middle level of management. Such a framework, combined with the experience gained while working in a specialized functional area enables a person to make preparations for handling general management responsibilities.