Strategic Management
It can be thought of as managing the "pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole.' These strategies can be either the generic approach to competing or the specific adjustments and actions taken to deal with a particular situation.
First, business organizations engage in generic strategies that often fit into some strategic type. One example is "cost, differentiation, or focus." Another is "defender, analyzer, prospector, or reactor." These generic strategy types describe the consistent way the company attempts to position itself relative to competitors.
The second aspect of strategic management is the process of developing strategies for achieving the company's goals in light of its current environment. Business organizations make choices about such things as how to scare off competitors, how to keep competitors weaker, how to react to and influence pending legislation, how to deal with various stakeholders and special-interest groups, how to lower production costs, how to raise revenues, what technology to implement, and how many and what types of people to employ. Each of these decisions may present competitive challenges that have to be considered.
Thus, strategic management is more than a collection of strategic types. It is a process for analyzing a company's competitive situation, developing the company's strategic goals, and devising a plan of action and allocation of resources (human, organizational, and physical) that will increase the likelihood of achieving those goals. This kind of strategic approach should be emphasized in human resources management. Thus, HR managers should be trained to identify the competitive issues the company faces with regard to human resources and think strategically about how to respond.
Components of the Strategic Management Process
Strategy Formulation
Strategy Implementation
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