Effectiveness of Strategic Management

Alli (1992) stated following attributes of an effective strategic management:

1.      Clear direction and purpose

2.      Objectives, goals, and strategic consistency

3.      Continuous monitoring of internal and external (environment)

4.      Integration of operating budget and profit plans with strategic plan

5.      Continuous monitoring of progress with revision of plan and programs as appropriate

6.      Creation of strategic atmosphere that foresters a team spirit

7.      Commitment of necessary resources and the development of system to provide necessary management information.

Fundamentally, there are three major viewpoints to understand strategic management efficacy in management studies.

First is the use of goal cantered approach to gauge organizational effectiveness. In this situation, individual organization scrutinizes the extent of completion of important planning objectives. Theorists like Cameron and Whitton (1983), King (1987) and Steiner (1979) supported this statement.

Secondly, specific capabilities to develop a 'generic view' if system capabilities as stated by Lorange (1979) a generic capability required of every formal strategic planning system is the ability to persuade both creativity and control (Camillus 1975). In this viewpoint, creativity and control are used as requisite properties of a successful planning method.

The third perspective usually scrutinizes the role and impact of corporate planning on organizational efficacy. Although, the link may be quite difficult however, there are strong arguments that the crucial test of the system's effectiveness and rationalization for its existence is the impact on organizational performance (Henry 1979).

Benefits of strategic management: The major benefit of strategic management is to facilitate organizations to devise viable policies through the use of a more systematic, logical, and rational approach to strategic choice. Communication is main factor to successful strategic management. The chief aim of the communication process is to accomplish understanding and commitment throughout the organization. It results in huge benefit of empowerment. More and more organizations are decentralizing the strategic-management process.

Financial Benefits: Numerous management Researches have revealed that organizations using strategic-management concepts are more gainful and successful than those that do not. Successful firms tend to do methodical planning to prepare for future fluctuations in the external and internal environments. Firms with planning systems more strongly resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industries.

Non-financial Benefits: Strategic management provides other tangible benefits, such as an enhanced wakefulness of external threats, better understanding of competitors' strengths, increased employee productivity, reduced resistance to change, and a clearer understanding of performance-reward relationships. In addition to empowering managers and employees, strategic management often brings order and discipline to an otherwise struggling firm.

According to Greenley, strategic management has following benefits:

·         It allocates for identification, prioritization, and exploitation of opportunities.

·         It provides an objective outlook of management problems.

·         It characterizes a framework for improved synchronization and control of activities.

·         It reduces the effects of adverse conditions and changes.

·         It allows major decisions to better support established objectives.

·         It allows more effective distribution of time and resources to identified opportunities.

·         It permits fewer resources and less time to be devoted to correcting erroneous or ad hoc decisions.

·         It generates a framework for internal communication among personnel.

·         It helps integrate the behaviour of individuals into a total effort.

·         It provides a foundation to clarify individual responsibilities.

·         It promotes forward thinking.

·         It provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities.

·         It encourages a positive attitude toward change.

·         It gives a degree of discipline and formality to the management of a business