Benefits of Strategic Management

In an organization there are burst of high performance and then there is a lull, most of the companies can manage short-term bursts of high performance, but only a few can sustain it over a longer period of time. In order to be successful in the long-run organizations should not only be able to execute their plans, but also adapt those activities to satisfy new and market changes.

Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence (rather than just respond to) activities—and thus to exert control over its own destiny. Small business owners, chief executive officers, presidents, and managers of many for-profit and nonprofit organizations have recognized and realized the benefits of strategic management.

Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among manager’s at all divisional and functional levels. Interaction can enable firms to turn on their managers and employees by nurturing them, sharing organizational objectives with them, empowering them to help improve the product or service, and recognizing their contributions.

A survey of nearly 50 corporations in a variety of countries and industries found the three most highly rated benefits of strategic management to be:

  • Clearer sense of strategic vision for the firm.
  • Sharper focus on what is strategically important.
  • Improved understanding of a rapidly changing environment

Historically, the principal benefit of strategic management has been to help organizations formulate better strategies through the use of a more systematic, logical, and rational approach to strategic choice. This certainly continues to be a major benefit of strategic management, but research studies now indicate that the process, rather than the decision or document, is the more important contribution of strategic management.

Benefits of Strategy

Communication is a key to successful strategic management. Through involvement in the process, in other words, through dialogue and participation, managers and employees become committed to supporting the organization.

Greenley stated that strategic management offers the following benefits:

  1. It allows for identification, prioritization, and exploitation of opportunities.
  2. It provides an objective view of management problems.
  3. It represents a framework for improved coordination and control of activities.
  4. It minimizes the effects of adverse conditions and changes.
  5. It allows major decisions to better support established objectives.
  6. It allows more effective allocation of time and resources to identified opportunities.
  7. It allows fewer resources and less time to be devoted to correcting erroneous or ad hoc decisions.
  8. It creates a framework for internal communication among personnel.
  9. It helps integrate the behavior of individuals into a total effort.
  10. It provides a basis for clarifying individual responsibilities.
  11. It encourages forward thinking.
  12. It provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities.
  13. It encourages a favorable attitude toward change.
  14. It gives a degree of discipline and formality to the management of a business



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