Louw and Venter (2010:20) explain that strategic management is concerned with the overall effectiveness and choice of direction in a dynamic, complex and ambiguous environment. The success of an organisation is mainly determined by the effectiveness and efficiency of its management. In the words of Peter Drucker, efficiency is concerned with ‘doing things right’, while effectiveness is concerned with ‘doing the right thing’. Strategic management is the deliberate effort to allocate resource and get above average returns through competitive advantage so that in the long run the organisation can generate wealth maximization for its stakeholders.
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The advantages of strategic management
In my opinion the strongest advantage of the strategic management is the involvement of employees in strategic management as this ensures that everybody understands their role and responsibility in the achievement of the organizations’ goal. This in turn reducing the gaps and overlaps amongst individuals groups and teams as everyone tends to work together to help the organisation do a better job, to assess and also adjust the organizations direction in response to the changing environment. An organisation without strategy and proper implementation and but in from its employees is an organisation without direction. An organisation without the correct implementation is an organisation without a precondition of success. Managing strategically is to make decisions and implement strategies that allow an organisation to develop and maintain competitive advantage.
Getting the employees involved is a concept that motivates strategists to replicate the strategies that make most successful companies. A study by Olson, Slater and Hult (2005: 47 – 54) showed that affective implementation can prove difficult as it requires the coordinated and appropriate efforts of individuals throughout an organization. This is a critical task for senior managers to define the key success activities for the organizations strategy and develop an organisational system that promotes those same activities.
Olson, Slater and Hult (2005: 47) did a study that of over 200 businesses and business units, and the findings was as follows; that in order for a strategy to create superior performance it must be complemented by appropriate organisational characteristics and employee behavior. This is exactly why I say to have employee buy in is important because an organisation cannot succeed without the human skill that is the employee, buy in from the organisations staff is critical because an organisation may have the best strategy but implementing it is what sets the organisation apart from the rest. Olson, Slater and Hult (2005: 47 – 54) best said it when they stated that many executives argue that brilliant execution is important than brilliant strategy. The reason is simple ‘doing harder than dreaming’, and a poorly executed strategy is merely a vision of what could be. This is the reason I personally think employee’s play a vital part in strategic management and having them buy into the idea as well as feel as part of the process makes implementing the strategy easier.
The disadvantages of Strategic Management
The basic purpose of performing a strategic management view is to analyse where you stand at present and also where your competitors are. After doing this evaluation, you can come to a decision regarding how to plan to do business in the future. You also analyse your strategic alternatives. Some of the disadvantages are that the research takes a lot of time and the whole process is time consuming. A little miscalculation in the...