Strategy and strategic management are important topics on corporate leadership's agenda, especially when it comes to charting an action plan to blunt rivals' advances. Senior executives work in tandem with department heads, directing segment leaders to find proper ways to implement corporate strategies and tactics. Meanwhile, various professionals weigh in on strategy formulation, including financial managers and human resources personnel.
Strategy
A company that does not put adequate processes into place may experience investor defection, especially if financiers believe the business is a losing game. A stream of investors may abandon hopes of a quick turnaround if top leadership does not show clear signs of proper profitability management. A strategy helps senior management right the ship and change course, giving department heads the tools necessary to reach such important goals as debt management and profitability administration.
Significance
Formulating a proper strategy may be insufficient if proper implementation does not ensue. Effectively executing top leadership's strategic vision requires business acumen, analytical dexterity and deep familiarity with essential factors that affect corporate activities. A sound corporate strategy opens the door for future opportunities that can help the business grow revenues, improve skills and invest internationally.
Strategic Management
Strategic management draws on business management and strategy administration. It helps an organization apply specific methods to win the economic competition without losing sight of the firm's core strategy. Strategic management tools run the gamut from project-framework controls, proper financial reporting and economic intelligence to a constant monitoring of the regulatory landscape. Economic intelligence enables companies to strategically sift through the competitive environment and appraise how external situations could adversely affect corporate activities. As a strategic management tool, a project framework links a corporate initiative's goals, inputs and outputs, decision-makers and key risks.
Relevance
The issue of strategic management often underscores the difficult choices corporate managers face as they try to balance the short-term profit goals that are dear to investors and the long-term expansion objectives necessary for future profitability. By engaging in strategic management, top leadership attempts to simultaneously tackle short-term and long-term issues, so that the firm can stay competitive while spearheading the initiatives needed to grow sales.
Connection
Strategic management interrelates with strategy formulation, although both concepts are distinct. Large organizations, as well as smaller players, formulate strategies to set proper operating targets that are conducive to long-term profitability. Strategic management sweetens the pot, enabling top leadership to establish such essential blueprints as budgets, financial worksheets and accounting reports.
Financial Repercussions
Strategic management enables a business to properly account for and report its transactions. Top leadership includes in corporate controls adequate procedures for bookkeeping and financial reporting. These policies help the firm accurately present such financial statements as balance sheets, income statements and cash-flow reports.
Tags: strategic management, affect corporate, affect corporate activities, corporate activities, department heads