The concept of strategic management is one that is highly important to organizations around the world (David, 2009). It involves taking a look at the top management of a company and the resources that management team is using on behalf of the company's owners and in order to show a specific level of performance. The mission, vision, and objectives of the organization must be examined, and it is necessary for them to come into play when attempting to understand the issue (Mintzberg, Ahlstrand, & Lampel, 1998). Plans and policies also have to be developed, and programs and projects must be created to meet the objectives that have been set by the company. When resources are allocated in order to ensure that these objectives can be met, strategic management helps to set out the right resources in the right amounts and at the right time so that the company can become and remain successful (Dess, Lumpkin, & Taylor, 2007; Grant, 2010).
The company then uses a balanced scorecard to evaluate its performance and see how much progress it is making toward its objectives (David, 2009). Studies have indicated that the expectations of stakeholders should be used as a jumping-off point for companies that are attempting to determine what kinds of goals they should have and how they should go about reaching those goals (David, 2009; Dess, Lumpkin, & Taylor, 2007; Grant, 2010). Addressed here will be the current situation as it relates to strategic management, as well as the history of the issue. Both of these are important to understand, because where something came from is often just as important as where it is now and where it is going. Understanding the past can help a company make good choices about its future, and can help a person or a company determine whether there were mistakes made that should be corrected in order to keep moving forward and remaining successful.
In order to have a successful study, a review of the literature will be undertaken. Then the methods and standards that were used will be addressed, and any questions that are being considered for further research into the area of strategic management will be discussed. From that point, it is vital that conclusions be drawn and recommendations be offered to wrap up the study. Without these components, it is often not clear whether a researcher has a thorough understanding of what the study was designed to do, and it is also not clear if said researcher is certain as to what else should be done in the area and should be questioned when it comes to that particular issue. In short, studies without these components lack completeness and that can make it difficult for anyone in the future to use the study as a jumping off point for similar studies or studies into related issues.
Reviewing the literature is a significant part of any kind of study, and that is true when it comes to understanding strategic management. The goal is not to address how it works with every type of company because there are often differences that are significant. Instead, the goal is more about looking at the way strategic management was handled in the past and the way it is being handled now. There are important differences to address, and there are some things that have stayed virtually the same throughout any other changes that have been made to the business world. With that in mind, strategic management is an ever-evolving issue with roots that really do not change much from one time period to the next. Having a good understanding of that and being aware of how it plays into what companies do and do not do in order to be successful can go a long way toward being more effective in business (Dess, Lumpkin, & Taylor, 2007; Grant, 2010).
Strategic management is a term that came about in the 1950s (Grant, et al., 2011). It was started and utilized by several different businessmen during that time period, including Peter Drucker and Alfred Chandler (Grant, et al., 2011). The strategy and strategic thinking on which the term is drawn, however, goes back many thousands of years. There has nearly always been strategy of some kind. The value of having a management strategy that was coordinated and that encompassed all of the issue the company was facing was at the heart of strategic management (Grant, et al., 2011). With that in mind, others took that information and ran with it, formulating a vocabulary of words that went with strategic management concepts and defining them so that they could be built upon by others, as well. Since managers were generally in charge of a department and relayed various information between that department and other departments, it was vital that they were on the same page.
When it came to how management worked and how it interacted with one another, the employees, and other companies, there were many issues to address. The way a manager led his followers was a part of the strategic management of any organization, and people who had highly conflicting management styles could sometimes struggle with management issues because they were in disagreement about how the management should be handled (Lewis, et al., 1999). Not all managers disagreed with others who were handling their management goals and responsibilities differently, of course, but it was an issue and a concern that needed to be faced. One of the main issues of strategic management that all managers could agree upon was the idea of addressing issues long-term (Lewis, et al., 1999).
A long-term strategic outlook is a big part of the history of strategic management, as it encouraged people to look outside of their immediate area and time frame so that they could consider strategies that would help them further down the road. The structure of a company follows the strategy, and a company that does not have one does not have the other (Lewis, et al., 1999). Naturally, this is a serious concern for any company that knows it needs to move forward, since there are only so many opportunities for a company to achieve and hold onto success. Without a strategy, there is no proper structure for the company, and without a proper structure the company does not run smoothly and can have trouble making decisions and moving ahead with any issues it needs to address. The history of strategic management is full of fallen companies that did not heed advice and did not build a successful structure based on the proper strategy for long-term success.
Another issue that came about with strategic management was the idea of making sure that the internal factors of the organization matched the external circumstances of the environment (Hamel, 2002). In other words, an organization does not (and cannot) exist in a bubble of its own making. No matter what it plans to do or what it is doing internally, it still must exist in and interact with the outside world. Because of that, it cannot ignore all of the issues that are faced by that outside world, or the changes that may be taking place there. Business regulations, the economy, and all types of other issues affect any organization, and the strategic management of that company must focus on the proper understanding of the outside issues as they relate to internal concerns in the company (Hamel, 2002). If the company does not spend time considering how it will work internally with the issues and requirements of the external world, it will not have an effective strategy that will carry it through problems that could arise (Hamel, 2002).
As strategic management started to evolve, one of the most important issues was to create objectives that were well-defined (Mintzberg, Ahlstrand, & Lampel, 1998). The idea was to ensure that the company knew where it came from and where it was going, and it was not able to do that unless it had objectives that were actually properly defined. A lack of objectives means a lack of direction, and not knowing where it is going can be the kiss of death for any company. In short, a company that does not know where it is going will not be able to formulate a plan for how to get there - and thus will not get anywhere (Mintzberg, Ahlstrand, & Lampel, 1998). Many companies that simply languish do so because they have no clear goals and objectives. They certainly want to succeed and grow and prosper, but they do not know how they can do so and they have no real idea of how they wish to go about moving in the right direction. A company needs to know what it wants.
When managers of a company are unclear about the objectives they want to meet and the time frame in which to meet them, very little gets done. However, it is also highly important to be realistic when…