Strategic Management: Organizational Application, Tasks and Challenges

This report provides a comprehensive analysis of strategic management within organizations, highlighting its importance in coordinating resources and achieving organizational goals. It discusses the necessity of strategic management for policy direction, resource allocation, and strategic alliances. The report also examines the four-phase business planning model, emphasizing financial planning, forecast-based planning, external orientation, and formal strategic management. It explores the SBU theory, its application in diversified companies, and its limitations in vertically integrated industries. Furthermore, the report reflects on the role of strategic management in personal learning, emphasizing its contribution to understanding executive policies and organizational planning. The conclusion underscores the need for strategic communication and tailored planning programs for effective strategy implementation. Desklib provides access to similar solved assignments and resources for students.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Table of Contents
1. Introduction............................................................................................................................3
2. The ways in which Strategic management is undertaken by the organisations.....................3
2.1 Need of Strategic Management in the Organisations.......................................................3
2.2 Key Tasks of Strategic Management in Organisations....................................................3
2.3 Challenges in the Strategic Management Discipline (Four Phase Model).......................3
3. Application of Strategic Management in organisational contexts.........................................4
The SBU theory......................................................................................................................5
4. Role of Strategic Management discipline in personal Learning............................................6
5. Conclusion..............................................................................................................................6
Reference....................................................................................................................................7

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1. Introduction
This report aims at analysing the importance and execution of strategic management
in various organisations. The importance of strategic management like goal planning or
gaining control over resources and supply chain have been highlighted in the report. Other
than that the SBU model and the four step business planning model have also been used to
demonstrate the advantages of strategic management.
2. The ways in which Strategic management is undertaken by the organisations
2.1 Need of Strategic Management in the Organisations
Strategic management in an organisation is instrumental to the success of the
company. The coordination of physical resources and the human resources is the goals of
strategic management which in turn allows in the fulfilment of the assigned goals of the
organisation (Bititci, Cocca and Ates, 2016). Strategic management gives direction to the
policy makers of the company for arrangement of its core activities. Strategic planning is
required for designing the course to spend business resources. In my opinion, proper resource
allocation would help in avoiding wastage of resources in the course of the entire business
plan. However, I think that strategic planning is directly linked with situational analysis
(Brewster, 2017). As such the organisations are able to realise their position in the industry.
The other advantage of strategic management in a company is strategic alliance. In case, if
the organisation has an infrastructure for rapid work flow, strategic planning might help the
company for engaging in strategic collaboration with other local enterprises. I believe the
most feasible example would be the acquisition of smaller companies by some frontline
branded company in the same industry. Lastly, I think all organisations needs to improvise
and innovate for ensuring their growth. Strategic management have a key role to play in that
context (Engert, Rauter and Baumgartner, 2016).
2.2 Key Tasks of Strategic Management in Organisations
Strategy have become the business buzzword in the last one or two decades. Strategic
management can be distributed into 4 sequential phases. This is in alignment of the Four
Phase model, which I suppose is most effective is evaluation of the corporate planning
systems (Hubbard, Rice and Galvin, 2014).
2.3 Challenges in the Strategic Management Discipline (Four Phase Model)

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According to this model, the first phase for any organisation is the primary financial
planning. The formal strategic planning of an organisation should be followed by the framing
of annual financial budget, I suppose. The management should frame strategies for
forecasting revenues, cost and the investment needs of the company. More than anything, I
feel that this would be able to set the limits for the expense budgets for the respective year.
The information systems planned as a part of the company’s strategies would be able to
evaluate the functional performance of the companies in comparison with the budgetary
targets (Omotayo, 2015).
I have often observed that the companies in this primary phase frame really potential
strategies, however by the end they are not able to keep up their organisational performance
in alignment to the framed strategy. Hence, I feel that a tertiary component of this primary
stage should be framing of an information system that would help them to analyse the
projected steps of their peering rivals. I think that this would make their cost structures more
impactful. Again his would also help the companies to realise how the market would react to
the introduction of a new product or new marketing change (Rosenberg Hansen and Ferlie,
2016).
The second stage of the fours step model is a purely forecast based planning stage. As
the financial managers of the companies calculate business costs and pro forma expenses, it
has been often observed that they extrapolate previous expenses. I believe that the biggest
advantage of including this phase in a company would be that the business planners would be
able to foresee the influence of the economic, social and political drivers in the corporation.
Biggest and strongest planning teams execute the most lengthy forecast planning phase.
3. Application of Strategic Management in organisational contexts
The third phase of the Four Stage Model is externally oriented (Secundo et al. 2015).
The allocation of resources is planned in this phase. The business strategists who plan this
phase, according to me, must have a look at the product offerings of the company and also of
the other peers from the perspective of an objective outsider. I can provide an example in this
context. A heavy equipment manufacturing company might allocate a strategic planning team
comprising of engineers and cost analysts to refigure one potential product of a company who
is a market rival. The engineers’’ team would analyse the product, reverse engineer it, then
reconstruct the probable manufacturing facilities involved in its production on theoretical
basis and the cost analyst in the end would decide the manufacturing costs at every step. This

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would clearly indicate the market policy of the peer. Is suppose that this might help the
company to formulate a manufacturing design that would enable them to cut cost in every
unit production. As such they would not need to introduce any competitive price strategy.
The last phase is technically named strategic management. This is a formal phase and
as far as I can say that big corporations, who maintain diverse manufacturing units and have a
rapidly evolving business pattern recheck all of their policies in this phase. Many effective
and integrated planning techniques work behind their success. This is just a final step of
revaluation. Again, corporations who operate in the market with two or three closely related
products might not adequately require this stage. However, I feel that the last stage is actually
very essential. Critical business policies can fail for a tinge of fissure. Therefore I would say
that proper execution of this phase is a pivotal responsibility of the top management of any
organisation.
The SBU theory
This theory is directly related to the third phase of the four step model. This business
model is most effective for diversified companies. This theory speaks for a formal grouping
of the related businesses of the companies into strategic units. This would help the strategic
planners to exercise control over the factors affecting each business properly. There are two
clearly defined business steps of this theory. The first is undertaking of corporate decisions
that determine the direction of strategic planning as a whole. The next phase is executed after
the grouping of the business activities. The decisions taken in the second phase influences the
individual SBU only. However, I think that this business theory have some limitations also.
The companies whose product line is vertically integrated especially the process oriented
industries, cannot sort out SBUs clinically. The corporate resources of the companies like
sales, manufacture and Research and Development are very closely linked. In other instances,
the business strategy is able to impose a concerted thrust on several business segments that
plans to meet the demands of the shared consumer groups. In exceptional cases, the
multiplied purchasing power of various SBUs or freedom of transferring technologies from
one SBU to another can stand out to be more valuable than the chance of making profit
oriented decisions in the individual business units (Stark, 2015).
I can substantiate the fact with an example. One important chemical firm noticed that
who have achieved considerable growth to integrate backward in feedstock production, had
started to gnaw at the historical competitive edges, as a completely integrated producer. The

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reason was that by the company had sacrificed the cost advantage of its raw materials by
licencing some of the technologies to its competition.
4. Role of Strategic Management discipline in personal Learning
Strategic management learning concepts have helped me to gain knowledge of the
executive policies that are implemented in an organisation. Besides, I have also learned about
effective organisational planning. This knowledge would enhance my career scope and help
me to flourish as an effective member of the management team of any organisation.
5. Conclusion
On analysing the strategic management processes, it can be concluded that
irrespective of the size or the market growth rate of a company, it needs strategic
communication. Moreover, it can also be concluded that various business models of large
corporations should carry out separate planning programmes that would enable them to see
through the strategies properly.

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Reference
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Brewster, C., 2017. The integration of human resource management and corporate strategy.
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Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, pp.2833-2850.
Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.
Indermun, V. and Mthembu, D.E., 2015. The Effects of Performance Management and
Development on the Performance of Modern Public Sector Organisations. JOURNAL OF
SOCIAL SCIENCE RESEARCH, 8(1), pp.1529-1534.
Omotayo, F.O., 2015. Knowledge Management as an important tool in Organisational
Management: A Review of Literature. Library Philosophy and Practice, p.1.
Rosenberg Hansen, J. and Ferlie, E., 2016. Applying strategic management theories in public
sector organizations: Developing a Typology. Public Management Review, 18(1), pp.1-19.
Secundo, G., Elena-Perez, S., Martinaitis, Ž. and Leitner, K.H., 2015. An intellectual capital
maturity model (ICMM) to improve strategic management in European universities: A
dynamic approach. Journal of Intellectual Capital, 16(2), pp.419-442.
Stark, J., 2015. Product lifecycle management. In Product Lifecycle Management (Volume
1) (pp. 1-29). Springer, Cham.