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Strategic Management overview

What is strategic management?

Strategic management Strategic management is a level of managerial activity under settinggoals and overTactics. Strategic management provides overall direction to the enterprise and is

closely related to the field ofOrganization Studies. In the field of business administration it is

useful to talk about "strategic alignment" between the organization and its environment or

"strategic consistency." According to Arieu (2007), "there is strategic consistency when the

actions of an organization are consistent with the expectations of management, and these in turn

are with the market and the context." Strategic management includes not only the management

team but can also include the Board of Directors and other stakeholders of the organization. It

depends on the organizational structure.

Strategic management is an ongoing process that evaluates and controls the business and the

industries in which the company is involved; assesses its competitors and sets goals andstrategies to meet all existing and potential competitors; and then reassesses 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.

Strategic management is a dynamic process of aligning strategies, performance and business

results; it is all about people, leadership, technology and processes. Effective combination of

these elements will help with strategic direction and successful service delivery. It is a

continuous activity of setting and maintaining the strategic direction of the organization and its

business, and making decisions on a day-to-day basis to deal with changing circumstances andthe challenges of the business environment. As part of your strategic thinking about advancing

the business, you (and your partners) will have set a course for a particular direction, but

subsequent policy drivers (such as new performance targets) or business drivers (such as

increased demand for services) could take the organisation in a different direction. There could

be implications for accountability when you decide whether to take corrective action to get back

on course or to go with the new direction. Similarly, there could be implications for governance

if relationships with partners change.

Why is it important?

Your organisation has to be able to respond effectively to challenges - both problems and

opportunities - as they arise. For example, the citizen has increasing expectations of service

standards and availability. In response, organisations are working towards an outward-focused

view of the way services should be provided - a fundamental shift from the traditional focus on

internal concerns. At the same time, major opportunities for improvement may arise from

developments such as new information and communications technologies, and the availability of

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additional financial resources such as the Invest to Save Budget. In many cases the response to

the problem or opportunity will:

require the continuous attention of senior management affect most or all of the organisation

have long term implications require substantial resources be interconnected with other issues and developments.

Key success factors

What characterises effective strategic management? There must be:

a clear business strategy and vision for the future a strategic direction endorsed by senior managers, taking account of partners and other

stakeholders

a mechanism for accountability (to the citizen in meeting their expectations, as well as tothe centre in meeting policy targets)

a framework for governance at several levels (government-wide down to internalreporting arrangements) that ensures you can coordinate everything (multiple goals) even

when there are competing priorities and different goals (seeGovernance).

the ability to exploit opportunities and respond to external change (turbulence) by takingongoing strategic decisions

a coherent framework for managing risk - whether it is balancing the risks and rewards ofa business direction, coping with the uncertainties of project risk or ensuring business

continuity (see ).

Who is involved in strategic management?

Key roles include:

senior executives and business managers in public sector organisations; they need to seekout opportunities for new ways of working that will help the organisation to realise the

agenda for change in the public sector; they also need to be aware of the implications of

realignment if the strategic direction is changed

senior management responsible for reviewing and redefining the requirements fordelivery of core services, and for acquiring the means to deliver them

staff responsible for developing and reviewing the business strategy in theirorganisations; they need to appreciate the wider business context partners and other

stakeholders affected by the strategy.

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Principles

The strategic issues facing the organisation and its response to them will call on the

organisation's skills in strategic management - its ability to recognise and deal successfully with

strategic issues. In the public sector, these will include:

addressing the needs of the citizen, not the convenience of the organisation greater efficiency and value for money improved and innovative service delivery to the public joined-up policy making increased communication with customers and partners greater local-central government coordination improved performance and the implementation of Public Service Agreements realisation of the government's e-government strategy (an enabling framework of key

principles such as interoperability and supporting technical standards).

Although the strategy process may incorporate timetabled events which fit in to the wider

management processes - such as the cycles of financial planning in the public sector - strategic

management is a continuous process. Managers at all levels in the organisation may need to

make decisions on business issues at any time, and some of these decisions could be regarded as

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'strategic' - even though they may not appear so at the time. Any business-focused strategy, must

be flexible enough to accommodate the demands of continuous change.

Processes

Strategic management has a co-ordination and integration role, seeking endorsement of thebusiness and supporting strategies (such as HR workspace and IT) and assuring the

appropriateness of strategic themes, seeStrategic Management workbook(PDF) for a more

detailed step-by-step approach.

The task of strategic management, in collaboration with partners, is to manage the continuous

processes of:

maintaining an appropriate relationship between the organisation and its environment -preparing the organisation for an uncertain future

developing and executing approaches for the implementation of the agenda for strategicchange - progressing the themes of the strategy

developing, reviewing and monitoring the policies which scope and constrainmanagement decisions and implementation plans

technology tracking to identify opportunities for innovation.A strategy for the organisation - whether for the business as a whole or for its information

systems - should include:

a strategic 'vision' - a long-term view of how the organisation wishes to position itself inrelation to its business environment - for example, its role and functions, the products or

services it will deliver, its relationship with customers or competitors

the agenda for change - the significant areas of change the organisation will engage in, inorder to respond to the problems and opportunities - the 'strategic issues' - facing it; these

will be the 'themes' of the strategy, which may address topics such as organisation and

structure, business functions and activities, product and service delivery, management

and staffing issues, technology, or external relationships; a theme is progressed over a

medium to long time scale

the policies which will guide the decision-making processes, and provide a frameworkfor management decisions - they will influence the patterns of behaviour which drive the

organisation forward towards the desired future.

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