Strategic management deals with the long-term plans and actions of an organization. These decisions arrive in the light of both internal and external factors that affect the working of an organization. The management basically evaluates the possible opportunities and strengths it possesses to achieve them. It needs to scan the external and internal environment to look out for the potential threats and devise strategies to work on its weaknesses.
Basically, strategic management is a continuous process of evaluating, implementing and reevaluating the decisions of the organization in order to achieve the organizational mission. Strategic management ensures that all the departments of the organization work together in harmony with each other in order to achieve the maximum output.
Components of Strategy:
Strategy is a plan or blueprint that helps the organization to achieve its long-term goals and mission. These are formulated by the top management. Policies are the rules and regulations laid down by the organization to help in the day-to-day working of the organization. The different components of the strategy are:
Strategy Intent: This is basically focused on the purpose of the existence of the organization in the market. It provides small steps to achieve the bigger organizational goals and helps in deciding the priority of goals. it should be designed in a manner that the organizational competencies can be taken to their maximum level. Strategic intent should focus on inspiring and encouraging people to work towards organizational goals while fulfilling their individual goals as well.
Mission Statement: It is a brief description's existence in the market and explicitly mentions the role by which the organization intends to serve all its stakeholders. It clearly lays down the framework for the formulation of strategies and the broad scope of the activities of the organization. The mission statement should have the following futures
- It should be clear, concise and accurate.
- It should reflect the organizational intent and must be inspiring for all the stakeholders.
- It should be feasible and attainable.
- It should be unique and must have a distinctive style.
- It should speak volumes about the credibility of the organization.
Vision Statement: A vision statement basically chalks the roadmap of the future of an organization. It is about the dreams and aspirations of the organization. A vision statement is helpful to the internal employees of the organization and helps in an effective and efficient decision-making process. The vision statement should have the following features:
- It must be clear and unambiguous.
- It needs to be futuristic, concise and correct.
- It should be rational and in sync with the organization's culture.
Goals: A goal is a primary outcome or the end result in the long term. We can also say that it si the future state that an organization wishes to achieve or strives to achieve. They are designed in a manner to coordinate the functions across the different horizontal and vertical levels of the organization. These need to be precise, realistic and measurable that can be achieved in a specific time.
Objectives: These are goals that are to be achieved over a small period of time ad can be attained only if attempts are made in a particular direction. These are generally for medium to short-term. Policies are the roadmaps o achieve an organization's objectives.