At SmartCapitalMind, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
Strategic management is a business approach that is utilized to make the most efficient use of available resources in the process of operating a company. The idea behind any strategic management process is to evaluate the current status of the operation and all its individual components, identify whether those components are being utilized to best effect, and to develop and implement changes when and as necessary. When utilized properly, this approach can improve the overall performance of the company, move the business closer toward reaching its stated goals, and keep the cost of raw materials and other resources in balance with the returns generated by the business effort.
The foundation of any strategic management approach is to define the basic reason for the existence of the operation. This means developing a workable mission statement for the company, defining objectives that are in line with that mission statement, and developing policies and procedures that move the company closer to achieving those objectives. As part of the process, companies must take into account the resources on hand and those that can be acquired when and as needed, and determine how to use those resources to best effect.
Once the structure is in place, strategic management calls for making sure the defined policies and procedures are being observed in every area of the operation. Here, managers, overseers, and supervisors must be well-versed in the essentials of strategic management, and learn how to use the resources placed into their care to best effect. This often translates into knowing how to communicate with employees effectively, understanding the production process thoroughly and being able to articulate why a given process is important to the overall success of the operation. When this is the case, the task of allocating tasks and resources to best advantage is easier to accomplish, and enhances the chances for the business to perform at optimum efficiency.
Strategic management is not a concept that applies only in large companies. Even small businesses that employ no more than one or two people can benefit from the basics of this approach. While the exact nature of the processes and tasks required for operation will be different between a mom-and-pop retailer and a multi-national corporation, the general idea behind this management process will still be valid. By applying the principals to the real-life situation of the business, it is often possible to maximize use of available resources, minimize waste in the workplace, and ultimately have a positive effect on the bottom line of the company.