How Organizations Employ Strategic Management Concepts

1245 words - 5 pages

Organizations today are continuously evolving and employing new strategic management techniques to meet their potential. It is common for companies to regularly evaluate their performance through a gap analysis of where they are now and where they wish to be. This instructs their change in strategies and guides them to their goals. Organizations employ strategic management concepts to fill the gap between their actual performance and their potential.

Strategic management is concerned with a set of decisions and actions intended to improve the long-run performance of an organization (Boddy, 2009). It draws from the company’s will to adapt and survive in varying external and internal environments. Strategic management incorporates rationalization, planning ahead, setting clear goals, designing logical structures and monitoring systems for efficiency. It helps to determine a model of investment of resources, time, effort and capital. Thus it is a plan to reduce uncertainty about the future and to choose viable and potential solutions for growth.

Gap analysis is a measure of a company’s current performance as compared to its potential or predicted performance (Gap Analysis, n.d.). It is a useful gauge and assists companies in planning and organizing their teams, strategies, resources or products to move towards their potential performance. It identifies the gaps and reveals areas that can be improved. Hence, as seen in fig. 1, it is a means of classifying how well a product or solution meets a targeted need or a set of requirements with respect to time.

Figure 1: Gap Analysis, n.d.

The first question that gap analysis answers is ‘where are we now?’. It provides a basis for measurement of money, time, and human resources to achieve a particular result. This allows companies to assess and understand their market value and position better. There are several strategic management tools employed by companies that enable them to evaluate their current status like PESTEL and SWOT analysis.

PESTEL analysis (Political, Economic, Social, Technological, Environmental, and Legal analysis) defines the effect of macro-environmental factors on the business (Johnson & Scholes, 2002). It is useful in understanding market trends and direction for operations. As seen in fig 2, it takes into account the influence of several external factors that may influence a decision or a new business.

Figure 2: PESTEL Analysis, 2009
A SWOT analysis is a strategic management tool that involves evaluating a company’s strengths, weaknesses, opportunities and threats (Humphrey, 2005). A SWOT analysis identifies both internal and external factors that are favorable and unfavorable to achieve a business outcome (refer fig. 3).

Figure 3: SWOT Analysis, n.d.

The choice of tools used varies with industries and products. For example, business to business (B2B) and consumer companies would prefer to use SWOT analysis, while a global defense contractor...

Find Another Essay On How Organizations Employ Strategic Management Concepts

Why Strategic Human Resource Management (SHRM) is so important? How is human resource management (HRM) strategic to gain competitive advantage?

2924 words - 12 pages Executive SummaryNowadays, Strategic Human Resource Management becomes very important for the organizations in the business world environment. The purpose of this assignment is about what the Strategic Human Resource Management (SHRM) is and why SHRM is so important? How is human resource management (HRM) strategic to a firm's viability and how it might help to lay a basis for sustained competitive advantage? And what are the strategies for the

Strategic Management Essay

1165 words - 5 pages we providing now that are no longer needed?" STRATEGIC�MANAGEMENT�IN THE HEALTH CARE INDUSTRY Historically, individual health care organizations had few incentives to employ strategic�management�because most health care organizations were independent, freestanding, not-for-profit institutions, and health services reimbursement was on a cost-plus basis. Efforts at health planning were initiated by federal, state, or local governments and

Change Initiative in Law Enforcement Organization

1037 words - 5 pages . The concepts and theories used to facilitate the overall change process In order for a law enforcement organization to employ community policing or any other form of change in a law enforcement organizations, especially a major change, is normally characterized by the use of centralized decision making and coercive tactics (Peak & Glensor, 2010). Most law enforcement agency will use committees, task forces, group seminars, and other

Strategic HR Management

1673 words - 7 pages objectives and the goals of an individual should be in line with that of the specific business entity. The most important thing in all this is developing the best workforce to undertake the activities of the organization. The best workforce refers to the competent employees. The right strategic human resource management is an advantage to the organization. A business entity needs to employ some strategies based on the resources available to be able to

Operations Management

2499 words - 10 pages . (2002), Decision by Objectives, World Scientific Pub Co.Slack N, Chambers S, Johnston R 2004 Operations Management4th ed,Prentice hall,LondonThompson, A. A., and Strickland, A. J. (1999), 'Dell Computer Corporation'. In Thompson, A. A., and Strickland, A. J. (1999), Strategic Management: Concepts and Cases. 11th Edition. McGraw-Hill: Boston.

Managerial Communication in the Workplace

853 words - 4 pages topic depicts the commitment and energy levels that employees implement on their work environment by following the good management concepts (Raymond A.Noe 2010). BACKGROUND Managerial communication and skills explains almost all the concepts on the effective management however some of the vital concepts I have learnt from the course include Effective managerial writing, Motivating employees, Managing Self Directed teams, Human Resource management

Strategic Management/Strategy Formulation

4761 words - 19 pages firms. "Research indicates that organizations using strategic-management concepts are more profitable and successful than those that do not. Businesses using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities. Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as enhanced awareness of

Future of Management Management: Theory, Practice & Application

1280 words - 5 pages IntroductionLife is about change; nothing stays the same forever. Success depends on learning how to adapt and roll with the changes. If we stand still, we will be left behind. Businesses and organizations face the same consequences. Management must see how new concepts and functions fit into the changing needs of a company, and the leaders of an organization must be able to make those visions a reality. This paper will focus on the roles of

HR Roles and Responsibilities Paper

1640 words - 7 pages traditional roles as HR experts, business partners, employee advocates, change agents, and human resources management leaders. Technology is impacting the work of HR in a number of ways - automation of tasks, elimination of tasks, etc. At the federal level, new initiatives like human capital management, e-government, developing a more business-like approach to the way HR provides services and strategic planning and workforce management are

Strategy In Action, Strategy Development and Organisational Learning

3182 words - 13 pages your organization.This task focuses on how the two concepts of 'strategy development' and 'organizational learning' apply to Haier. Strategy development processes include formal planning processes as well as emergent processes. And organizational learning also applies to strategy development processesHaier develops its strategic direction based on the way that combines the inputs from the Governor's Office, the company's executive management, and

Business in South Africa: Strategic Decisions

1271 words - 5 pages services, and as history has proven repeatedly to outwit the competition. Human Resources It becomes evident that organizations need to employ the right people to plan its strategic decisions as well as to execute them. Choosing the right people for the right job can be a difficult task and businesses often make critical mistakes in the employee selection process. This often affects these employees’ careers and eventually the execution of the

Similar Essays

Strategic Management, Compensations And Employment Concepts

1735 words - 7 pages Introduction Managers have always understood how important interpersonal skills are to their effectiveness. Recognizing the importance of developing those same interpersonal skills is tied to the need for businesses to obtain and retain high-performance employees. Managers get things done. They also get things done through other people. Utilizing the concepts of organizational behavior is crucial to being an effective owner and manager

Concepts, Models And Schools Of Strategic Management

2066 words - 8 pages Concepts, Models and Schools of Strategic management One of the duties of the managers of a company is to engage in strategic decision making. Strategic management is a broad subject on its own that borrows from other social science disciplines. According to AllBusiness (2011), strategic management involves all the activities undertaken by management to better place the company in the industry it operates in. It is important for every manager

Strategic Management, Why & How Essay

3825 words - 15 pages management to create a proactive management posture. Macro environmental analysis helps organization to change the strategy according to change in environment such as Government rules and regulation, economic condition of the country, crucial and quick technological change. Also Industry analysis helps organizations to make appropriate strategy to overtake the competitive rivals in the industry.Limitation of strategic analysis:The environment is

Strategic Management Accounting And The Contributions That It Can Make To The Success Of Organizations

1837 words - 7 pages support the strategic decisions in organizations" (Innes 1996, cited in Drury, 2008, p.570) and these strategic decisions usually involve the longer-term, have a significant effect on the organization and have both internal and external elements. This definition is supported by Cooper and Kaplan (1988). A variety of writers have suggested that target costing, life-cycle costing and activity-based management are additionally encompassed within SMA