Strategic Management explained

Wikipedia defines strategic management as: “an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassess each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment”

Hence strategic management is a process to methodically formulate strategies for the organization to bring profits to the organization through logical, measurable and repeatable manner.

Senior management in most organizations while engaged in “reactive management [read decision-making]” think that they are engaged in strategic management.

Strategic management or managing strategically should list the strengths of the organization, opportunities and markets that can be exploited, weaknesses that obstruct in goals accomplishment and the threats that are present in external and internal environment – the SWOT analysis.

Based on the above analysis an in-depth Annual Operational Plan (AOP) should be created. The AOP should be further broken down into objectives and goals for each department, and further translated into budget.

This will ensure that a streamlined approach of all departments working toward a common strategic objective, and the every penny being spent brings value to the organization by contributing to the strategic objectives.