What is Strategic Management? How Does it Ensure Business Success?

To get ahead, corporations are emphasizing strategic management skills as they hire for leadership positions. Whether you are focused on finance, marketing, research and development, or operations, chances are good that you will be called upon to strategically manage projects or processes.

In this article, we’ll take a detailed look at strategic management, including the steps in the process, the benefits and pitfalls, and how you can become a strategy manager.

What is Strategic Management? 

Strategic management is a comprehensive process that aligns a company’s strategic direction with its operational activities, ensuring it can navigate competitive markets successfully and achieve long-term success.

The main purpose of strategic management is to guide an organization in meeting its goals and objectives through the efficient use of resources. The process includes the continuous planning, monitoring, analysis, and assessment of an organization’s resources and capabilities. As changes or challenges arise – both internally and externally – a strategic manager will implement solutions to effectively adapt business activities. More simply put, strategic management ensures that all employees within a company are focused on the same goals.

Strategic management theory is the process an organization uses to accomplish strategic management and typically involves five steps: goal setting, analysis, strategy formation, strategy implementation, and strategy monitoring.  

Goal Setting

It involves establishing clear objectives for the organization, including defining its vision, mission, and overall strategic goals.

Analysis

It involves gathering, analyzing, and interpreting data about the organization’s internal strengths and weaknesses as well as external opportunities and threats. This phase often results in a SWOT analysis.

Strategy Formation

It involves developing strategic options based on the results of the analysis phase, and then selecting the most appropriate strategies to pursue.

Strategy Implementation

It involves executing the chosen strategies by allocating resources, developing programs, and making necessary adjustments.

Strategy Monitoring

It involves continuously evaluating and controlling the strategic process to ensure the organization remains on track toward its goals, adjusting as needed based on performance and environmental changes.

Applying Strategic Management

Although strategic management should always be used to guide operations, it can be particularly useful during key moments, including periods of significant growth, market change, and future planning. By keeping long-range success in the foreground, strategic management can ensure employees focus on areas most likely to achieve management’s desired outcomes.

The benefits of strategic management are numerous and can significantly impact an organization’s success. They include:

Improved Decision Making

Strategic management provides a framework for making informed decisions by evaluating the internal and external environments of the organization.

Increased Efficiency

By aligning resources with strategic objectives, organizations can operate more efficiently.

Better Coordination Between Departments

Strategic management ensures that all departments work towards common goals, enhancing coordination and reducing conflict.

Financial Benefits

Strategic management leads to improved financial health via liquidity monitoring, revenue generation, profitability management, and solvency planning.

Setting a Clear Direction

By setting a clear direction for the future, strategic management ensures that employees and management are aligned toward achieving the organization’s goals.

Competitive Advantage

Strategic management is crucial for maintaining and achieving a competitive advantage in the market.

As you can see, strategic management is not just about planning; it’s also about adapting to changes, making informed decisions, and ensuring that an organization remains relevant and competitive in a rapidly changing environment.

What Skills are Important for Strategic Management?

Strategic management is a multifaceted discipline that requires a range of skills from leaders and managers. Central is the ability to negotiate, find common ground, and achieve buy-in across diverse stakeholder groups. These skills are essential for unifying different viewpoints and agendas to move the company forward. 

Effective delegation is also a cornerstone of strategic management, allowing for the efficient distribution of tasks. In addition, communication skills play a pivotal role. Leaders should be able to impart information clearly and use active listening skills, both key traits of emotional intelligence. The goal is to inspire confidence within your team and among stakeholders. 

Finally, strategic management is underpinned by the ability to think strategically. Leaders with critical thinking and problem-solving skills are better able to anticipate future trends, recognize potential issues and opportunities, and craft appropriate solutions. 

Together, these skills facilitate the development and implementation of strategic goals, ensuring organizations are well-positioned to navigate complex environments and achieve sustainable success.

How to Become a Strategic Manager?

To become a strategic manager, a solid educational background is typically required. Typically, strategic management roles require at least a bachelor’s degree in a field of study like business administration, finance, economics, or a similar discipline.

Moreover, some positions may look for candidates with more advanced degrees, like a Master’s in Business Administration (MBA) or related areas. This advanced education can provide deeper insights into business strategies, leadership, and organizational management. 

UoPeople offers a variety of educational options for aspiring strategic leaders. Both the Associate and Bachelor degrees in business administration focus on the core competencies of leadership, while our Master’s of Business Administration is well-known to help advance your career. 

UoPeople’s tuition-free model allows us to offer students an affordable solution to earning a quality business degree. In addition, our classes are all taught online and are asynchronous, making us perfect for adult students balancing career and family lives along with academic goals. UoPeople courses can be completed on your own schedule and in a matter of months.

If you don’t want to undertake a degree program, UoPeople also offers convenient certificate programs that are perfect for adult workers looking to upskill. In particular, our Certificate in Strategy gives students a solid foundation in strategic business methods, business management, accounting, marketing, and economic theory in as little as four months.

Furthermore, combining a bachelor’s or master’s degree with several years of practical experience in business or strategy roles can significantly enhance a candidate’s qualifications for becoming a strategy manager.

Also useful are less formal leadership training programs, workshops, seminars, and conferences that focus on key competencies like strategic thinking, communication, and change management. Additionally, finding a mentor within your company can also be beneficial, especially for someone working in a strategic management role. By working closely with your mentor, you can learn what techniques are the most successful within your business environment.

Strategic management is critical to the operation and profitability of any organization. Because it is so integral to long-term financial success, many corporations are now prioritizing strategic management skills when they are making hiring decisions. For this reason, upskilling in strategic management is currently one of the most popular paths to career advancement.

To deliver on their goals, companies use strategic management continuously. Therefore, there will always be opportunities for strategic managers in the workforce. By keeping a keen eye on how a company’s operations are aligned with its goals, strategic managers can guide their companies to success.