Significance and Challenges of Strategic Management in Organizations

This article discusses the importance of strategic management in organizations, its key tasks, challenges, and its role in life and businesses. It also includes a case study of Wesfarmers.

Running head: Strategic management
Strategic management

Strategic management
Table of Contents
Introduction...........................................................................................................................................3
1. Strategic management in undertaken by the organizations................................................................3
A. Significance of strategic management...........................................................................................3
b.Key Tasks of Strategic Management..............................................................................................4
C.Challenges of Strategic Management in the current environment..................................................5
2.The strategic management discipline in life........................................................................................6
The strategic management discipline in Businesses...........................................................................6
3. Strategic Management Disciplines in organization............................................................................6
4. Learning from strategic management in the future............................................................................7
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8
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Strategic management
Introduction
The main purpose of this task is to outline the significance of the strategic management in the
organizations. The paper also explains the challenges and needs of the strategic management
and along with this; it describes that how strategic discipline helps us in understanding the
life experience and business.
1. Strategic management in undertaken by the organizations
A. Significance of strategic management
Strategic management refers to the development and implementation of plans which are
useful in conducting business operations effectively. To incorporate a proper strategy for the
business the company needs to identify its mission and vision. In this assignment the
Wesfarmers has been chosen to understand the need of strategic management (Akram et al,
2011).
Main Reason for Need of Strategic Management for Wesfarmers:
1. Increasing rate of change: The environment in which business operates is changing
very fast and to become up-to-date the company need to make a strategic planning.
Without a proper strategy the company cannot survive for long time in the market.
The effective strategy increases the profits of the company in long run.
2. Motivate employees: To motivate employees the Wesfarmers need to design a well-
planned strategy which includes reward and promotion plans, to inspire employees to
work hard and work as per their potential (David, 2011).
3. Decision Making: setting goal and objectives of the business is very important and for
that tough decisions are made by management. Decisions are very critical part of
strategy management as the whole working of the company depends on it.
4. Increasing profits: The main objective of every business is to earn maximum profits.
And to increase profits the company wants a well-planned strategy (Stead and Stead,
2014).
5. Others:
 For marketing opportunities
 To avail Distribution Channel
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 To increase scale of company operations
 For Research and innovation programme
 To Plan rate of growth
b.Key Tasks of Strategic Management
There are various key of tasks of strategic management that have been detailed below.
1. Developing a strategic Vision and Mission: Developing a strategic vision and mission
includes a long term view on where the company is going and make the employees of
company know about it. Mission is defining why the organisation exists and vision is
a management view of where company is going (Keller, Parameswaran and Jacob,
2011).
2. Setting objectives: strategic objectives are the goals which are design by the company
to increase its market share or to develop a competitive advantage over its competitors
in the industry. Long term and short term both type of objectives are design by a
company to make company’s position strong.
3. Crafting Tactics: Crafting tactics are drafted by a company to achieve its design
objectives. In this management will discuss how to respond to changes in the
environment.
4. Implementing: To implement planning or craft tactics the company need to draft a
strategy (Huselid and Becker, 2011).
5. Evaluating Performance: For evaluation that all plans areworkingproperly to achieve
the set goals of the company a strategy of evaluating performance is to be design.
While developing the above stated Tasks the company needs to take care of six external
factors these are
P- Political
E-Economic
S-social
T-Technological
E-Environment
L-legal
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All the six external factors are required to be considered while designing the key task for the
company because these are going to affect the working of the company. As the company has
to do its business in the market these six factors will going to affect the business at some level
so, it is important for the business to analyze and monitors impact of these factors on an
organization. And the results which are derived will help to identify the threats and
weaknesses of the organization (Hitt, Ireland and Hoskisson, 2012).
C.Challenges of Strategic Management in the current environment
The challenges of strategic management are discussed below.
1. Orientation for globalisation: in current environment every business are getting
globalised as the Wesfarmers are also working in a global market. Due to globalised
operation of the company, they need to update its strategic management process.
2. E-commerce and internet culture- In current time every business are going online the
all companies are selling their product online and customers are becoming habitual of
purchasing goods online. To cop up with the new market condition the company need
to make strategies to go online.
3. Cut throat competition: with globalisation, E-commerce and other changes are taking
place in the current in business environment the competition is become very tough. It
is become very hard to for the company to survive for a long time without a proper
competitive strategy.
4. Diversification: the rapid change in the business environment has increased the
uncertainty in the business. To eliminate the risk of the uncertainty the company need
to make a diversify strategy to diversify the business risk
5. Active Pressure group: in the current environment there are many pressure groups are
active such as environmental activist and consumer protectionism. The strategy need
to design to control these factors
6. Motive for Corporate Social Responsibility (CSR): in modern time the companies are
engage in CSR and ethics to keep their corporate reputation and be competitive in
environment. Strategic management should look into CSR activates and implement
those to be with expectation of the society.
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2.The strategic management discipline in life
The role of strategic management discipline is huge in making decisions in life because the
major aim of this discipline to think that things not occur in the life randomly but as per to
pre-planned or long term goals (Eden and Ackermann, 2013). It helps to understand the
various concepts of the strategy such as strategy formulation, strategy implementation,
strategy control and strategy planning. I can understand my life experience in new ways with
the help of these aspects of the strategic management discipline. The strategic management
discipline is not about making long term objectives but also it refers as a comprehensive
managerial discipline. I understand the various concepts of strategic management that
facilitates me to take appropriate decisions regarding my life that aids me to attain the
objectives of my life.
The strategic management discipline in Businesses
Yes, I found that the strategic management discipline helpful in understanding my
interactions with business. The strategic management discipline entails the key strategy
which covers the sub strategy such as HR strategy, financial strategy, information strategy,
marketing strategy and other strategy. It is vital for developing the business to have the key
goal. Strategic management discipline has the potential to maintain the key objective of the
business. it would be helpful for me to interact with other businesses because I can
understand the mission, vision, objectives, planning, implications and control of the business
in more efficient manner that would bind the good bond between me and other businesses
(López-Nicolás and Meroño-Cerdán, 2011).
3. Strategic Management Disciplines in organization
The role of strategic management discipline in every organization is huge as it develops the
better understanding about the concept to the employees. There is an example of Wesfarmer
that has developed proper strategic management discipline to maintain the profitability of the
business. The strategic management offers the entire direction to the Wesfarmer and includes
the specifying objectives of the organization, improving the plans and policies to attain these
objectives and then allocating the resources to execute the plans. Academics and practicing
managers of Wesfarmers have enhanced various models and frameworks to help in making
decision regarding strategic management in the relation of the complex environments and
competitive dynamics. The nature of this discipline of strategic management is not static in
nature and the models often involve a feedback loop to evaluate execution and inform the
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next round of planning. There is a strategic planning and process flow which contains the
formulation and implementation in which analysis is the first step of the Wesfarmer
Company that entails remote external environment, industry environment and internal
assessment. After that strategic information had done setting goals which cover the
formulation and implementation. Control and feedback are being done by the company in
more efficient manner by the organization to maintain the value of strategic decisions. Along
with that there are various techniques in strategic management such as BCG matrix,
PESTLE, Porter’s five forces and VRIO analysis (Ene and Ionescu, 2017).
4. Learning from strategic management in the future
I have learned ample of things from the strategic management in the future. I have observed
that strategic management help in the decision making process. According to me strategic
management helps the company to cope up with the rivalries in the international market. It is
noted that no company can survive without using effective and unique strategic management
tools and techniques. If the organization like Wesfarmers wants to become a leader in the
Australian market then it needs to focus on the strategic management at the workplace. I have
learned that strategic management is a significant part of the each and every organization in
order to accomplish the long term mission and vision. This strategic management also helps
in overcoming the competitors globally.
Yes, I observed that strategic management discipline as a useful way to help us make better
decisions in our life and career.
Conclusion
On the above mentioned analysis, it has been evaluated that strategic management plays a
vital role in our life. Furthermore, it also provides ample of benefits to the organizations.
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References
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David, F.R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.
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Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
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Stead, J.G. and Stead, W.E., 2014. Sustainable strategic management. Routledge.
Huselid, M.A. and Becker, B.E., 2011. Bridging micro and macro domains: Workforce
differentiation and strategic human resource management.
López-Nicolás, C. and Meroño-Cerdán, Á.L., 2011. Strategic knowledge management,
innovation and performance. International journal of information management, 31(6),
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Ene, C.G. and Ionescu, S.C., 2017, October. Strategic management for small and medium
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