Firms or companies today face a broad array of risks, problems and issues internal to them and external factors relative to increased international competition due to globalisation. Thus, strategic management is an activity necessary to be undertaken by firms who want to sustain their existence in today’s highly competitive environment. Firms need to develop strategies as they are managements’ game plan for growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives. Strategic management is the set of managerial decisions and actions that determines the long-run performance ...view middle of the document...
Thus, a firm’s strategy indicates the choices its managers have made about the specific actions it is taking and plans to take in order to move the company in the intended direction and achieve the targeted outcomes. In one way or another, a firm’s strategy is partly the result of trial-and-error organisational learning about what worked in the past and what did not. It is also partly the product of managerial analysis and strategic thinking about what actions need to be taken in the light of all the circumstances surrounding the firm’s situation.
This paper explores the idea that ‘business strategy is a mixture of luck and judgement, opportunism and design, others argue that strategy is more of an art than a science’. In particular it examines the roles of strategic management in planning an organisation’s future development buy developing knowledge and practice in the application of strategic management concepts and techniques.
IS BUSINESS STRATEGY A MIXTURE OF LUCK AND JUDGEMENT, OPPORTUNITIES AND DESIGN, OR MORE OF AN ART THAN A SCIENCE?
Wheelen and Hunger (2008) define strategic management as that set of managerial decisions and actions that determines the long-run performance of a corporation or firm. Accordingly, it includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control. In short, strategic management emphasises the monitoring and evaluation of external threats and opportunities in light of a firm’s internal strengths and weaknesses. As Hoffman (Spring 2007) puts it, strategic managements seeks to align the firm’s activities with its external environment.
At the heart of this management approach is the strategic planning system (Hoffman Spring 2007). Included in this system is the strategic management process. The strategic management process, he explains, is the full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above-average returns.
Hanson et al (2008) explain that a firms’ first step in the strategic management process is to analyse its external and internal environments to determine its resources, capabilities and core competencies. These, they say, are the sources of its ‘strategic inputs’. With this information, the firm develops its vision and mission and formulates its strategy. To implement the strategy, the firm takes actions towards achieving strategic competitiveness and high returns. The sequence of the strategic management process can therefore be summarised as follows: effective strategic actions that take place in the context of carefully integrated strategy formulation and implementation actions result in desired strategic outcomes.
Hoffman (Spring 2007) however stresses that the strategic management process should be dynamic considering that there is ever changing markets and competitive structures. Therefore they must be...