So now, lets revisit our topic in strategic management. It is important to remember that strategy for firms require top management expertise and large amount of company resources. Strategic issues usually affect long term survivability, are future oriented and need a degree of awareness from external pressure.
This type of strategic decision making need to be done by CEO’s, board of directors, CIO’s etc., in large organizations or corporations. But, this type of strategic process can be harnessed by small businesses as well as start ups. Entering new markets takes a degree of strategic mapping in order to fit in. It is important to note however, that the levels of strategic management differ from one another. For example, Corporate level decisions usually involve more risk, cost and potential profit, longer time tables. Functional level decisions are those made by managers of on the front lines. Their job is to implement the strategy passed down from the Corporate level (those who formulate the strategy) and the Business level (or middle management), as middle managements job is to interpret those strategies and enforce the strategy, so the involvement of functional management is purely operational. Operational management decisions usually involve low risk, short term decisions.
So who exactly makes these strategies? An ideal strategic management team consists of decision makers from all 3 levels of the firm i.e., Corporate, Business, Functional. Top management will shoulder the burden and responsibility for all major elements of the management and process. The business level management has the responsibility of trending and forecasting, budgeting and developing business plans based on strategic movement. With this being said, it is crucial that the CEO, who is responsibly for the firms future and ultimately responsible for a successful strategic plan, to allow managers from all levels of the strategic plan to take part in it. When there is to much autocracy, the plans can falter and fail. A horizontal approach needs to be used with discretion to ensure proper control over implementation and feedback.
By now, you should have some general idea of Strategic Management and how it is formulated on a basic level. Understand, small business owners can value this information just as much as the regular business junky. These post should even help the start up company understand what strategic management is and they part he/she should take within their own entities to ensure smooth function and long term survivability.
Join me in the next addition,” Strategic Management III,” as we will further analyze strategic management.