IMPACT OF STRATEGIC MANAGEMENT ON PRODUCTIVITY AND PROFITABILITY OF A BUSINESS ORGANIZATION
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IMPACT OF STRATEGIC MANAGEMENT ON PRODUCTIVITY AND PROFITABILITY OF A BUSINESS ORGANIZATION
Chapter one
INTRODUCTION
1.2 Background of the Study
In today’s chaotic business world, managers require trustworthy navigational tools to gain a competitive advantage. Many scholars and practitioners believe that strategic management is a technique that requires today’s managers to think strategically about their company’s position and the impact of changing business environments.
According to Kotler (2012), strategic management is the managerial process of creating and sustaining a feasible fit between an organization’s objectives, talents resources, and changing market possibilities. In any organisation, strategic management occurs in two phases: the choice on the items to produce and
or the services to be rendered. It also entails deciding on a marketing and/or production plan for delivering the targeted product or service to the appropriate user.
Strategic management decisions will have long-term implications for the organisation. Similarly, Mintzberg (2011) contended that strategic management seeks to blend short-term and long-term planning.
Organisations that practise strategic management typically commit to a formal process in which a group of planners articulates a mission statement, sets goals and objectives, audits the organisation for internal strengths and weaknesses, assesses the external environment for opportunities and threats, evaluates strategic options, and finally selects and implements an organisational strategy.
The primary goal of strategic management is to connect daily organisational decisions to a vision of where the organisation wishes to be in the future, typically five years.
As a result, strategic management is not a one-size-fits-all solution, but rather a flexible set of concepts, procedures, tools, and practices designed to help organisations figure out where they are, what they are doing, how to do it, and why.
According to Porter (2010), strategic management is the process of developing an offensive and defensive action plan with the goal of maintaining and increasing a competitive edge over competitors through strategic and organisational innovation.
Strategic management should handle three issues: what to do, identifying customers, and how to outperform competition. According to Blackerby Associates (2010), strategic management is a continuous and methodical process in which individuals make decisions about expected future objectives, how to achieve those outcomes, and how success will be judged.
McDonald (2013) established a framework that argues that the strategic management process produces a set of defined initiatives (projects) that fulfil a desired set of business objectives.
According to Renger and Titcomb (2012), strategic management is the process of determining an organization’s strategy or direction and deciding how to allocate resources to execute that plan.
To establish the organization’s direction, it must first comprehend its existing situation and the various paths it can take, particularly its course of action. Furthermore, according to Amit and Zott (2010)
strategic management defines the organization’s primary objective and determines the resources that will be employed to carry it out. It is the organization’s master plan from which all departmental functions and directions are derived.
For these managers, the trick is to know which levers to pull and when to pull them in order to achieve the desired and significant effects in terms of higher productivity, which leads to high profitability for their organisations. We can classify these essential levers as organisational strategies.
In the context of corporate organisations, strategy and strategic management relate to the key action plans that organisations utilise to fulfil their mission and goals. The primary goals of any business organisation are viability and profitability.
The first prerequisite of the organisational spirit is high production standards for both the group and the individuals inside it. A successful organisation is typically an efficient firm, and one of the primary goals of management by objectives is to encourage managers to establish high productivity standards for themselves.
A manager’s functions include allocating and integrating human and economic resources through the planning, organising, directing, and controlling processes, with the goal of producing outputs (goods and services) desired by customers and achieving the organization’s objectives. A manager works with and through people and other resources to achieve organisational goals.
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