Role and Aspects of Strategic Management

free essayIn comparison with compliance and risk management, strategic management is recognized as the most reliable and wise way of business running. The wisdom of it lies in its name, which consists of two words, strategy and management. Let us consider both of them. Strategy aims to minimize financial and human resources, yet achieve higher results and profits. Management focuses on organization of the process of achieving the object set by strategy. Its role is to plan and prescribe day-to-day way to the aim realization, as well as calculate and make changes, if the plan does not work.

Jim Clayton in his article for Houston Chronicle distinguishes five main aspects of strategic management. They are goal setting, analysis, strategy formation, strategy implementation, and strategy monitoring (Clayton, 2016). Goal setting spreads over long-term and short-term objects. It is important not only to set the final aim, but also to separate it into many small ones, and then delegate them to the workers, who can perfectly implement each small task. The second stage is analysis. It is the key stage, because it determines further actions in three following aspects. The main role of analysis is to examine external and internal information and issues as well as conclude whether the strategy operates right. It includes both literature and press information search in addition to communication with front workers and their opinions study. Strategy formation is the middle step in strategy management implementation. Its purpose is to create alternative approach to the object achievement. This process takes into consideration constantly changing people’s demands, economic and business situation. After formation of the strategy, another critical stage follows which is called strategy implementation. Contrary to the previous ones, which are based on planning, analyzing and studying, this particular stage is rather practical. Every worker should have a clear view of their responsibilities and duties and strictly follow them. The final step is strategy monitoring and control. Even the most experienced managers cannot give one hundred percent guarantee that their plan will work. That is why no relaxation can follow the first four steps implementation, because the period of statistic, monitoring, comparison and criticism begins. Strategy monitoring is a time of control and reporting mechanism work that requires quick changes if needed.

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One of the most common mistakes of the entrepreneurs who start their own business is neglect of strategic management developing when they as no one else often have no right, but big chances to fail due to the lack of financing. Thomas Edison said that “Good fortune often happens when opportunity meets the preparation” (“Thomas Edison ‘Quotes’,” n.d.). The core principal of strategic management lies it his words. The preparation is developing of the plan, which will drive the company growth. This rather philosophical approach is based on current economical, human and financial situation, and outlines the rules to follow in order to succeed.
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Business leaders, who practiced strategic management in their own companies, prove that it actually works, and provide the public with the key moments of it. Thus, Melanie Whelan, C.E.O. of SoulCycle, informed New York Times that “Until you get to the bottom and everything is out there, you cannot start to build solutions” (Bryant, 2015a). In her job she pays a lot of time and attention to listening to the leaders and front workers of the company so that to understand, contrast and analyze how good the company is operates and what else can be done. Melanie is always open to information, which helps her to monitor the relevant strategy implementation and make the analysis of the following strategic management plan. Melgoza, the founder and chief executive of Geoscape, shares his experiences and says “I have learned to overcomunicate during our regular staff meetings about strategy and why things are happening, so that everybody knows what is going on” (Bryant, 2015b). The implementation stage of strategic management is vital for him, because it depends not only on him or chief manager, but on each worker’s good performance. That is why César emphasizes not only the duties and responsibilities of each employee, but tries to valuate and explain his scheme to them so that they accomplish each task realizing the importance of it. Christopher Cabera, the founder and C.E.O. of Xactly, rules mostly with respect of strategy formation, which involves reconsidering and reinventing the plan in accordance to changeable market, as well as human, economic and political situation. In his management, he considers everything and is not afraid of innovations and new methods. Christopher likes to repeat to his workers, “The skills that I had to take this company from zero to 20 million dollars are very different than the skills that are going to take this company from 100 million dollars to 200 million dollars”, and appeals to his workers to reinvent themselves every six months (Bryant, 2016 January). Cabera takes the most decisive measures against changes, which are rapid in the contemporary world and very threatening for big and small business.

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Each leader and businessperson pays substantial attention to different aspects of strategic management relatively to the sphere of their activity, but every wise leader does consider its stages and calculates their possible profits and risks.

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To conclude, goal setting, analysis, strategy formation, implementation and monitoring will undoubtedly help both experienced businesspersons and beginners, but in order to give the foundation for strategic management implementation, unique and hard to duplicate business idea should go first. Business does not rely only on “buy cheaper and sell more expensive” principle, but also requires creativity and vision of perspectives were others hardly see them. Business operates easier and prospers more quickly, when it is combined with passion, desire and innovation. Strategic management helps leaders and business owners not be blind just with the idea, but also calculate their chances logically, while doing their job with passion, and succeed in it.