The success of organizations is dependent on the extent to which they able to establish a strategic plan that meets its needs and objectives. Every institution has goals, missions and goals that it seeks to adhere strictly to as a consequence remaining relevant in their particular jurisdictions. Strategic management aids an organization in planning and defining approaches that should be employed in ensuring success. Inappropriate management is occasioned by the failure by the management of respective organizations to institute proper management practices that can steer the firm through a positive path towards achieving the predetermined objectives.
Major components of Strategic Management
Strategic management has three major components that an organization can focus on as a consequence of ensuring success. The components include:
The first step in coming up with of a strategic plan is planning. This component commences by examining the goals and missions of an organization. The goals and missions are used in examining the external environment. The information is extracted from that practice aids in ascertaining the long and short term objectives of the firm (Rothaermel, 2015). An organization can only draw a proper strategic management plan by extracting information concerning the internal and external environment. There has to be an intelligence unit where information is gathered as a consequence of enhancing the development of a management plan. A Network that includes consultants, surveys, reports and special studies should be established to as a consequence of drawing a large pool of information. A communication network should be developed as a measure of enhancing the free flow of information from one department to another. These tenets are crucial for success because they properly draw information that is required for the strategic management plan.
This stage has some features that define its precepts and areas of focus. They include;
• Resource deployment
This stage refers to the operationalization of strategies. Implementation of the strategic management plan requires immense mobilization of resources. Financial, human and material resources must be assembled to make it relatively easy to implement the various management plans defined in the introductory stages (Rothaermel, 2015). The organization must commit to some formal budgeting procedures and develop policies that are aligned with the management strategies. All the areas must be considered, and the budgetary allocations appropriately considered. Implementation of strategies requires that some changes be effected within the institution. Managers must be the agents of change in accomplishing the strategies. The employees and executives must conform to the changes that are made in the organization and appreciate the essence of such establishments. The structures have to be laid in the operationalization process.
This stage includes the evaluation of the initial plan, its effectiveness, areas of adjustment and redeployment. Strategic management plans should be revised to determine if there are areas of deficiencies occasionally and how improvements can be made. All the components of the strategic management plan have to be redefined to ensure that it conforms to the original strategies in all aspects (Rothaermel, 2015). The feedback obtained from various departments is essential in making appropriate adjustments.
Importance of Organization’s values and missions to strategy formulation
Values and missions are the benchmarks through which organizational strategies are developed. Companies use the values and missions and the foundations that guide the institutionalization of the organization’s objectives. The company develops a strategic management plan based on the missions and objectives of the firm. The aim of the organizations is to achieve certain objectives over a period. A strategy is established in conformity with the objectives of the firm (Rothaermel, 2015). Ideally, values and missions are the foundational components that aid in the strategy formulation.
Benefits of Strategic Management process for a health organization
Strategic management is essential for a health organization because it aids in the promotion of quality healthcare. Essentially, strategic management enhances effectiveness and efficiency in the delivery of care. Consequently, strategic management assists in the prevention of obsolescence (Schulz & Johnson, 2007). It allows for innovative propensities that are crucial for the appropriate establishments of healthcare facilities. Moreover, strategic management process also assists healthcare organizations to organize its human resource and enhance professional relationships. Mobilization of financial resources, marketing, and social responsibility are some of the benefits of a strategic management process to a healthcare organization.
Effect of strategic management on organizational decision-making and financial performance
Organizations undertake decisions based on the positive or negative opportunities and outcomes that affect its stability. Strategic management aids the managers to make decisions based on the objectives and missions of the organization. Consequently, the strategic management process defines the financial performance of the firm. Allocation of financial resources is based on the objectives of the firm and implementation of key projects.
How strategic management affects the organization’s response to its environment
The development of a strategic management plan requires extraction of information from internal and external entities. Organizations respond to the environment by aligning its operations to the dynamic changes that occur in the external settings (Haberberg & Rieple, 2007). For instance, if technological transformations, regulations, customer predilections are some of the implications of strategic management in relation to response to the external environment.
Achievement of goals and objectives within an organization depends on how the firms implement their strategic plans. Planning, implementation and evaluation are key elements of strategic management that a firm can employ in meeting their purposes. An institution can only respond effectively to the issues in its business environment if it adopts proper strategies that respond either to the threats and opportunities manifest in the immediate environment.
Haberberg, A., & Rieple, A. (2007). Strategic Management: Theory and Application. Oxford: Oxford University Press.
Rothaermel, F. T. (2015). Strategic Management. Press.
Schulz, R., & Johnson, A. C. (2007). Management of Hospitals and Health Services: Strategic Issues and Performance. Washington, D.C: Beard Books.