When we consider the business world and its organizations, we can see indications of their success or failure. The success indications of an organization are long-term profitability, financial stability, sound quality of work-life, increasing market share, and favorable relations with society. The indicators of failure are bankruptcy, financial instability, low profitability, decreasing market share, employee unrest, and unfavorable and conflict-ridden relations with society. All these indications show how far the company uses its resources to achieve its objectives efficiently and effectively. Every type of organization, if it wants to reach its objectives, should develop, and conform to a comprehensive master plan geared to achieving the organization’s mission and objectives. In other words, managers of today’s business organizations must manage firms strategically. Further, it becomes clear that they cannot take decisions based on longstanding rules historical policies, and simple extrapolations of current trends. Therefore, they must look to the future as they plan organizational objectives, initiate strategy, and set policies. Managers of the organization must be willing to ask three keys Strategic Questions.
- Where is the organization now? (Where are we now?)
- If no changes are made, where will the organization be in one year, two years, five years; or ten years? Are the answers favorable?
- If the answers are not favorable, what specific actions should the management undertake? What are the risk and payoffs involved?
Answering these three questions, the organization can evaluate their position in the industry. Especially they can assess the degree of adaptation to environmental changes. The organization will be willing to change its activities to be in keeping with the environmental changes that alter the rules for success. Poor attention to environmental scanning results in poor strategic planning. If we think about ourselves, our desire is to be good top-level managers in a reputed company. Now, first, you have to evaluate the requirements and opportunities to reach the stated objective, such as qualifications, skills, experience, and the managerial posts available in the reputed company. Then you assess the threats that confront each opportunity. i.e., competition, limited vacancies. Finally, you must assess your strengths and weaknesses which relate to each opportunity. An example of strengths is having relevant qualifications, skills, experience etc. Weaknesses are that you do not have the skills for the job available qualifications, experience etc. Now you can compare these elements or factors and evaluate the successful combination to achieve the set objectives. After the evaluation of strategic factors, if you fail to achieve success, the cause could be chronic weaknesses. You can improve your relevant strengths, or you should eliminate or reduce your weaknesses by using appropriate strategy or strategies. And this will also help you to face the threats and overcome them. If you don’t follow this strategic process, you may definitely meet with failure. This will happen especially in a turbulent environment. Where rapid changes are taking place in both local & international matters. If you discuss or ask, what reasons are behind successful managers, it will become clear that they have definitely followed the strategic process consciously or unconsciously.
Strategic management is a rapidly developing field of study that has emerged in response to the increasingly turbulent environment. This field of study engages the organization as a whole and tries to explain why some firms develop and thrive while others stagnate and go bankrupt. And this subject also provides a sound basis which to achieve the firm’s mission and objectives. Now you want to know the difference between general management (which we call, the process of management) and strategic management. General management is based on the reactive thinking process, but strategic management is based on the proactive thinking process. Therefore, the distinguishing characteristic of strategic management is its emphasis on strategic decision-making. It, therefore, typically focuses on analyzing the critical problems and opportunities faced by people in top management.