Strategic management is critical to the development and expansion of all organizations, as it represents the science of crafting and formulating short-term and long-term initiatives directed at optimally achieving organizational objectives. Strategy and a company's mission statement and vision are inherently tied, and constitute the core concepts that allow a company to execute these goals. Following this, the company strategy must constantly be edited and improved to move in conjunction with the demands of the external environment.
As a result of it's importance to the business or company, strategy is generally perceived as the highest level of managerial responsibility. Strategies are usually derived by the top executives of the company, and presented to the board of directors in order to ensure it is parallel with the expectations of stakeholders of the company (particularly in public companies, where profitability and maximizes shareholder value is the central company mission). Also of high importance is the implications of the selected strategy, which is illustrated through achieving high levels of strategic alignment and consistency, both relative to the external and internal environment. In this way, strategy enables the company to maximize internal efficiency while capturing the highest potential of opportunities in the external environment.
The initial task in strategic management is typically the compilation and dissemination of the vision and the mission statement. This outlines, in essence, the raison d'etre of an organization. Additionally, it specifies the organization's scope of activities. Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:
- What do we do?
- How do we do it?
- How do we excel?
Business (or Strategic) management is the art, science, and craft of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. It involves specifying the organization's mission, vision, and objectives; developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives; and then allocating resources to implement the policies and plans, projects and programs. Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. The media image Product Improvement Strategies shows an example of the process of how improvements are designed and implemented. Figure 1