Strategic Management

Strategic Management is the art and science of formulation, implement and evaluation

cross-functional decisions that enable an organization to achieve its objective. Strategic

Management has changed to meet the challenges of each decade of business development and

has been significantly impacted by globalization. Organizations using strategic management

are more successful than organizations that do not employ this central process.

Strategic Management is often referred to as strategic planning in the business arena,

but is referring to the entire process as strategic management is more encompassing than the

planning phase. Strategic planning is a management tool. As with any management tool, it is

used for one purpose only: to help an organization do a better job - to focus its energy, to

ensure that members of the organization are working toward the same goals, to assess and

adjust the organization's direction in response to a changing environment. In short, strategic

planning is a disciplined effort to produce fundamental decisions and actions that shape and

guide what an organization is, what it does, and why it does it, with a focus on the future.

The process is strategic because it involves preparing the best way to respond to the

circumstances of the organization's environment, whether or not its circumstances are known in

advance; nonprofits often must respond to dynamic and even hostile environments. Being

strategic, then, means being clear about the organization's objectives, being aware of the

organization's resources, and incorporating both into being consciously responsive to a dynamic

environment.

The process is about planning because it involves intentionally setting goals and

developing an approach to achieving those goals. The process is disciplined in that it calls for a

certain order and pattern to keep it focused and productive.

Finally, the process is about fundamental decisions and actions because choices must be

made in order to answer the sequence of questions mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Because it is impossible to do everything that needs to be done in this world, strategic planning implies that some organizational decisions and actions are more important than others - and that much of the strategy lies in making the tough decisions about what is most important to achieving organizational success.

Today, the strategic management process is changing, but the principal objective of business remains stable, to earn superior returns on shareholder’s capital. The tempo has increased and companies must use the strategic management process to focus on semi-continuous transformation, not just planning for the next round (Strategic Management, 2004).

The early 1990’s saw a new style of management process that would lead to material factors affecting the American future business culture. Louis V. Gerstner, Jr, CEO IBM led the way to a frightening strategic management process of restructuring the organization by releasing over eighty thousand workers and reducing cost by more than eight billion. Wall Street was quick to be skeptical, but soon become enamored with his success. Watts Waker and Jim Taylor (1997) call this upheaval a 500 year delta. They claim these major upheavals occur every 5 centuries. They say we are currently making the transition from the "Age of Reason" to a new chaotic Age of Access. Jeremy Rifkin (2000) popularized and expanded this term, "age of access" three years later in his book of the same name.

Gary Hamel (Hamel, G. 2000) talks about strategic decay; the notion that the value of all strategies, no matter how brilliant, decays over time.

Richard