By definition, Strengths S and Weaknesses W are considered to be internal factors over which you have some measure of control. Also, by definition, Opportunities O and Threats T are considered to be external factors over which you have essentially no control.
Login Register Now Introduction This article is designed to provide you with a realistic understanding of some of the advantages and disadvantages of implementing a strategic management system. Strategic Planning I have deliberately used the words strategic management and NOT strategic planning.
Webster's defines planning as "a proposed or intended course of action, or a formulated scheme setting out stages of procedure". Oxford defines planning as a "formulated or organized method by which a thing is to be done".
Yet, when we think of management we tend to think of a systems approach to the optimization of the organization. Strategic planning still has the connotation of a process that is discrete, separate, and independent from the business of an organization. While strategic management connotes the planning, implementation, evaluation, on-going maintenance, and adjustment of the organization's strategy.
Because I believe that strategic management is an integral aspect of an organization's business and not just a once per every three-year retreat, I have used the term strategic management throughout this article.
The Advantages of Strategic Management Discharges Board Responsibility The first reason that most organizations state for having a strategic management process is that it discharges the responsibility of the Board of Directors.
Forces An Objective Assessment Strategic management provides a discipline that enables the board and senior management to actually take a step back from the day-to-day business to think about the future of the organization.
Without this discipline, the organization can become solely consumed with working through the next issue or problem without consideration of the larger picture. Provides a Framework For Decision-Making Strategy provides a framework within which all staff can make day-to-day operational decisions and understand that those decisions are all moving the organization in a single direction.
It is not possible nor realistic or appropriate for the board to know all the decisions the executive director will have to make, nor is it possible nor realistic or practical for the executive director to know all the decisions the staff will make.
Strategy provides a vision of the future, confirms the purpose and values of an organization, sets objectives, clarifies threats and opportunities, determines methods to leverage strengths, and mitigate weaknesses at a minimum. As such, it sets a framework and clear boundaries within which decisions can be made.
The cumulative effect of these decisions which can add up to thousands over the year can have a significant impact on the success of the organization. Providing a framework within which the executive director and staff can make these decisions helps them better focus their efforts on those things that will best support the organization's success.
For some people simply knowing is enough; for many people, to gain their full support requires them to understand. Enables Measurement of Progress A strategic management process forces an organization to set objectives and measures of success.
The setting of measures of success requires that the organization first determine what is critical to its ongoing success and then forces the establishment of objectives and keeps these critical measures in front of the board and senior management.
Provides an Organizational Perspective Addressing operational issues rarely looks at the whole organization and the interrelatedness of its varying components.
Strategic management takes an organizational perspective and looks at all the components and the interrelationship between those components in order to develop a strategy that is optimal for the whole organization and not a single component.
The Disadvantages of Strategic Management The Future Doesn't Unfold As Anticipated One of the major criticisms of strategic management is that it requires the organization to anticipate the future environment in order to develop plans, and as we all know, predicting the future is not an easy undertaking.
The belief being that if the future does not unfold as anticipated then it may invalidate the strategy taken. Recent research conducted in the private sector has demonstrated that organizations that use planning process achieve better performance than those organizations who don't plan - regardless of whether they actually achieved their intended objective.
In addition, there are a variety of approaches to strategic planning that are not as dependent upon the prediction of the future. It Can Be Expensive There is no doubt that in the not-for-profit sector there are many organizations that cannot afford to hire an external consultant to help them develop their strategy.
Today there are many volunteers that can help smaller organizations and also funding agencies that will support the cost of hiring external consultants in developing a strategy.
Long Term Benefit vs. Immediate Results Strategic management processes are designed to provide an organization with long-term benefits.
If you are looking at the strategic management process to address an immediate crisis within your organization, it won't. It always makes sense to address the immediate crises prior to allocating resources time, money, people, opportunity, cost to the strategic management process.
Impedes Flexibility When you undertake a strategic management process, it will result in the organization saying "no" to some of the opportunities that may be available.
This inability to choose all of the opportunities presented to an organization is sometimes frustrating. In addition, some organizations develop a strategic management process that become excessively formal.
Processes that become this "established" lack innovation and creativity and can stifle the ability of the organization to develop creative strategies.Joel Skousen, one of the world’s foremost experts on home security, retreat preparedness and strategic relocation, says that no preparedness plan is complete unless you’ve taken into account the single most critical threat we face during a widespread emergency.
The potential benefits and limitations are analyzed as following through the implementation of internal and external strategic management. The ultimate goal of strategy is to create value for the firm, while the role of strategy analysis is to identify and exploit the sources of this value.
Successful leaders have a nose for opportunity and a knack for knowing whom to tap to get things done.
These qualities depend on a set of strategic networking skills that nonleaders rarely possess. This book was once described as "the final nail in the coffin of strategic planning"!
It takes strategic planning, as envisioned about years ago, and carefully cuts it apart, removing all its pretensions to being strategic in any real sense. As mentioned, the whole concept of strategic management encompasses potential benefits and limitations. Historically, the principal benefit of strategic management has been to help organisation formulate better strategies through the uses of a more systematic, logical and rational approach to .
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