Definition: Strategic management is a management practice that prioritizes strategic analyses and decisions over operational, day-to-day business routines. Strategic management looks for definition and implementation of strategic plans with the purpose of maintaining permanent alignment between business operations and corporate goals.
What Does Strategic Management Mean?
Every business needs strategic management to guarantee long-term sustainability. In general, managers tend to be absorbed by operative tasks that resolve routine problems like purchases of raw materials, payroll, employee recruiting processes, supply chain operations and sales. On the other hand, when managers apply strategic approaches, they are less focused on the required tasks for regular operations.
They instead analyze the external environment to recognize opportunities and threats, examines internal performance to identify areas for improvement, defines plans and road maps, make decisions that aim to achieve corporate objectives and monitors implementation of pre-established strategies to guarantee continuous progress. Strategic management is about analysis and plans but also about successful implementation of activities and performance monitoring.
Steel Builders is a company that manufactures steel products used in construction. Mr. Lantch, founder and CEO, is a hard working executive who spends twelve hours per day at the office. Mr. Lantch has many operational responsibilities such as approving all payments made and defining daily production mix. His older son Tom will take the CEO position in two weeks and he already decided to make some changes in his priorities.
Tom wants to be a strategic manager to find growth opportunities in the competitive steel industry. He will focus in the design and monitoring of key performance indicators and will dedicate two weeks twice a year to analyze market trends and potential opportunities for new product lines. In addition, Tom thinks that all managers reporting to him should be also strategic managers instead of purely operations staff. He wants to assure that strategic decisions are taken properly in a timely manner according to the business growth and development.