Strategic management is a dynamic process of aligning strategies, performance and business results; it is all about people, leadership, technology and processes. Effective combination of these elements helps in providing strategic direction and successful service delivery. It is a continuous activity of setting and maintaining the strategic direction of the organisation and its business, and making decisions on a day-to-day basis to deal with changing circumstances and the challenges of the business environment. In other words strategic management can be defined as the application of strategic thinking to the job of leading an organization.
As part of strategic thinking about advancing the business, one has to set a course for a particular direction, but subsequent policy drivers (such as new performance targets) or business drivers (such as increased demand for services) could take the organisation in a different direction. There could be implications for accountability when one has to decide whether to take corrective action to get back on course or to go with the new direction. Similarly, there could be implications for governance if relationships between the partners/directors change.
We can say that strategic management means continually asking the question, "Are we doing the right thing?" Strategic management is focused on the future within a context of a changing, but relatively predictable environment.
Strategic management consists of the following three activities and decisions:
1. Formulation of the future mission of the organization in light of changing external factors such as regulation, competition, technology and customers;
2. Development of a competitive strategy to achieve the mission; and
3. Creation of an organization structure which will deploy resources to successfully carry out its competitive strategy.
That is, it requires attention to the "big picture" and a willingness to adapt to changing circumstances.
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