Strategic management
As a strategic management is defined as the branch of business administration, which is engaged in the development, planning and implementation of substantive goals, objectives and orientations of market-based organizations. In addition to the Business Administration Strategic Management is also a branch of the Public Management.
The time horizons in strategic management generally include two to five years, which is strategically not to be equated with long-term, strategic plans but usually have a longer-term time horizon. Due to the strong overlap of the topic with issues of product policy, marketing, and the importance for the company's stakeholders strategic management corresponds strongly with the concept of corporate governance. In St. Gallen Management Model is easily recognized as the strategic management with other areas of management cooperates.
- 5.1 enterprise level
- 5.2 divisional level
- 7.1 Relevant approaches strategic management
Term origin
Diverse and almost all sides we find the term " strategy " in many different areas: there are, for example, competition, growth, sales, production and human resources strategies. Looking at the past of the term, so today's meaning seems almost obvious:
The term " strategy " has its origins in the military, and his importance place in the top military decision-making positions. Directs the strategy concept from the ancient Greek one here, so you can see exactly what substance, the term: from ancient Greek " STRATEGUS " means " commander " / " army commander ".
Now it is clear that the term " strategy " has fundamental significance in the conduct of an army and in the figurative sense can also find application in the management of a company and its employees.
The term strategy gained practical approach to the economics, the term a " schedule of a specific sequence of moves " designated by its use in the economic game theory. Every action is thought as a function of the possible own and others' moves. After moving in at the beginning of the 20th century in economics, he rose to prominence especially in American universities. Through the integration with the economics the link " strategic management " was born, and with your a core element of current and future corporate governance. Today is strategic action to determine decisions from a higher perspective, to act holistically can.
Mainly form the basis for the development of strategic management theories following three representatives.
- Chandler (1962 ) - "Strategy and Structures" has embraced the concept strategy " socially acceptable "
- Showed for the first time on the relationship between strategy and structure
- Laid foundation for strategic management at the enterprise level
- Laid foundation for strategic management at the business unit level.
Today's importance of strategic management
Especially in today's living situation in which companies are, a strategy belongs to one of the most important components of management. Dynamism, complexity, speed and diversity in the corporate environment further complicate the resistance and thus the existence of the company. The aim is to meet the long term in the future decisions that seem almost trivial in view of the indicated effects on the company.
Therefore decisions are based less on arguments and unique contexts, but rather on plausible conclusions. Never a rigid future face of the company should be designed. It comes with the strategic management to interpret the image of the company in the future, to identify and customize the forces of the environment, which will act on the company and act in the distant future:
The corporate governance implications of decisions must be made clear impact criteria and therefore external and internal risks and opportunities are presented to clearly illustrate options for appropriate action.
Objects of strategic management
There are to name three objects of strategic management:
1 strategies
- Determine the business orientation of a company
- Determine long-term business goals
- How should the company position in the market
- Identifies and builds from competition-related resources
2 structures
- Shaping the company
- Defines the nature of the division of labor
- Coordinates the resulting division of labor compliance
3 systems
- Infrastructure of the company
- Instruments for the management of the company
- Management Information System
- Management incentive system
Instruments and methods of strategic management
The entrepreneurs the continuous changes in the environment need to be aware and adapt their strategies and decisions according to the current situation. You need to look holistically about the areas of the company away and with appropriate methods (such as the macro environmental analysis or industry structure analysis) identify risks and opportunities.
In a very complex environment, this is very difficult and it is hardly possible an overview of the various risks to gain.
Macro Environment Analysis: The company at the center of its environmental
The aim is to stabilize the company Vita in a dynamic environment: This seems difficult and complex since almost infinite number of effects inherent risks exist.
The macro- environment analysis consists of three areas:
- Outer ring: the Global Environment
- Inner ring: the competitive environment
- Corporate core
Consider the macro world, we find that a variety of factors on the company from outside influence and of corporate governance can not be influenced directly: Socio-cultural, economic, political / legal, and technological factors affect the competitive environment and the company.
This puts the company on a shaft, which moves continuously: the macro environment, or global environment called, is a kind of rotating outer ring to the competitive environment and to the ends located in the center of corporate core.
The competitive environment with customers, competitors, suppliers and other stakeholders acting rather than center ring of the environment: In addition, driven by the effects of the effects of macro- environmental change in supply and demand patterns, and related strategies and ways of thinking. Due to the direct line of the competition field to the company, it is possible to clearly isolate the hazards of the competitive environment risks and take appropriate action. So it's easy for the company, for example, to respond to price changes in the political competitor and keep customers.
The company's core with its own individual structures, cultures and resources can be found in the center of the macro world and therefore subject to constant changes and effects.
Risks and opportunities of influencing factors, trends and effects to be detected by an analysis of the business environment. Each portion is a ring of the macro environment contains various factors which are relevant in the design and maintenance of a strategy.
Industry structure analysis
Michael E. Porter, a leading management theorist, developed one of the most famous instruments in order to analyze the environment of a company within an industry: The industry structure analysis. With this instrument, the competitive situation and therefore attractiveness of the industry is determined from a company's point of view and evaluated. An industry is considered attractive if a long-term and profitable existence of the company is possible.
The instrument examines the market structure and thus the strategic behavior of market participants who have a decisive influence on the positioning and the company's success.
The five components of the industry structure ( so-called "five forces" ) are suppliers, potential competitors, existing competitors, customers and substitute products:
- Bargaining power of suppliers
- Threat of new competitors
- Bargaining power of buyers
- Risk of substitute goods
- Rivalry among existing competitors
This instrument should be evaluated according to opportunities and risks analytically the individual components.
Levels of strategic management
Since there are different organizational structures in a company, they must also be considered in terms of the strategic management. These two levels are observed. On one side of the plane on a company basis and on the other side of the business base.
Enterprise level
This one deals with the design of a business portfolio to distribute the company's resources optimally to the individual business. To ensure this, the structures and systems of the company must be fair strategy designed and deployed.
The business unit level
At the divisional level, the question arises how the company has to operate optimally in the individual shops in order to remain successful in the competition. For this to be ensured Wettberwerbsvorteile must be created and used. Here, a specific strategy must be developed for each individual business. Thus, there is in business for each of its business segments own strategy on the overall strategy ( corporate strategy ) is held together.
Phases of strategic management
- Phase 2: Planning
- Phase 3: Strategy Formulation and evaluation
- Phase 4: Implementation
In addition, a final control phase and a process- accompanying strategic control are necessary.
Basic perspectives of strategic management
The Strategic management is based, inter alia, on the strategic success factors. The confrontations with corporate strategy can be sort along different pairs of opposites. The most important for practice and theoretical reflection questions are:
- Whether the generation of strategic planning in principle take place only at the top of the company ( should ) or whether it also does not make sense to consider initiatives that develop elsewhere in the hierarchy,
- Whether strategic management should pursue the objective of maximizing shareholder profits only or whether it is not useful to a wider target area to consider about social or environmental objectives at least with
- Whether with strategic management should develop primarily prescriptive standard strategies in the dispute or if you do not also, perhaps even should shift their focus to the description and analysis of real expiring strategic processes
Relevant approaches strategic management
In analyzing the reasons for the strategic and competitive success of firms three explanations have emerged in the economic literature:
- Market - based view
- Resource - based View
- Relational View
A further development that seeks market- and resource - based view to integrate, the dynamic capabilities approach.
Criticism
The term strategic management, little is bounded, which makes it indeed universally applicable, however, muddies the essential content. This can deteriorate the term to a type descriptor. Due to the long-term orientation, the strategic management can offer no concrete solutions for present problems. These have tactical decisions and operational processes are found on the basis of strategic guidelines in the frame.
A caveat is that in the implementation often there would be a risk to orient themselves too close to categorical, strategic models, and to prevent such creative processes within a company. Furthermore, past orientation in strategy development as well as the preference for fact-based, hard data in strategic decision-making processes be faulted. Soft factors would often paid too little attention. See 7- S model
Also, it is criticized that strategic management "qualitative" models with limited value and little concrete benefit for the corporate management would often provide primary. This criticism is so far right to give than that normalized strategy models can always offer only a basal grid for the analysis and extraction of fundamental data on the observed facts.
The often raised accusations of being able to generate any quantifiable More gains in business activity through the use of strategic management and the associated instruments, two points are countered:
On one hand, concrete and quantifiable value to take place only in the actual, operational activities of a company. According to the widely held view that strategic activities from produktionsfaktorieller perspective tasks are dispositive sites, a concrete comprehensible causal chain between management and object-related, operational service provision is difficult to establish. Thus, a robust quantification of the associated with the use of strategic management tools to boost your efficiency difficult.
This is possible but with extensive metrics models such as the classical ROI scheme of DuPont, the ZVEI system or the Tableau de Bord model.
On the other hand, can only provide evidence for policy recommendations strategic models and tools. In this respect, the concrete success and the increase in yield associated with this is inextricably linked to the quality of strategic and tactical operationalization and operational implementation of these recommendations.
In this respect, a constant criticism of the current models in literature and practice is just as accountable as important.