Sunday, November 10, 2019
Four Key Attributes of Strategic Management
Strategic Management must firstly be directed towards a companyÃ¢â¬â¢s goals and objectives. Typically the company will be organized with a mission and vision developed, stating a purpose and direction of the overall organization. The goals and objectives set by the managerÃ¢â¬â¢s act as stepping stones to maintain that vision. These goals need to be transparent throughout the organization to allow the key players to achieve buy-in as the team moves towards accomplishing these goals.Secondly, the strategic management of an organization must include multiple stakeholders in decision making . Typically stake holders have demands on different areas of the organization. Managers must consider the consequences of how certain decision will affect each stakeholder group. Stakeholders will include the owners, shareholders, employees, customers, suppliers, and the community . Decisions that may benefit the owners such as taking short cuts in safety may have drastic effects on the employee s or a local communityÃ¢â¬â¢s environment.Decisions to cut costs in quality control and employee training may benefit the bottom line of a company for a short time, but eventually will lead to a poorer product being produced and a lack of consumer confidence or higher warranty claims of the end user. Third, strategic management requires incorporating both short-term and long-term perspectives. Managers must maintain a vision for the future as well as focus on the present needs.Managers can be put in a position to be Ã¢â¬Å"short sitedÃ¢â¬ to reach production numbers or sales goals by making decisions that donÃ¢â¬â¢t coincide with those long term goals of growth. Salesmen with quotas may always look for the quick sale without respect for building a long term relationship with the customer. This can cause long term reputation issues and cause a company to develop a culture of poor service and trust. Strategic managers must fourthly recognize the trade-off between effectiveness and efficiency. This is described as Ã¢â¬Å"doing the right thingÃ¢â¬ or Ã¢â¬Å"doing things rightÃ¢â¬ .Managers must make decisions that guide the organization towards its overarching goals and perform actions which create cost savings, best practiceÃ¢â¬â¢s, and build a culture of a positive corporation. Sometimes doing the right thing may cost the company more money to stay on focus of the mission. Companies may make organizational decisions that inhibit the success of the organization. In a recent news story, a company in West Virginia made a decision not to report a chemical spill from its holding tanks into the Elk River .This spill has now contaminated the drinking water supply of over 300,000 residents and sent some of them to the hospital. Freedom Industries made the decision not to report the spill until after the state Department of Environmental Protection had already traced it to one of their leaking tanks. Through this act of neglect and failure to report the lea k, the company now creates a reputation of untrustworthiness and may face legal action which will significantly affect the stakeholders (both stockholders and local community).A local company in my business area has been known as a poor company to work for and has a reputation of a sour culture. This company has had safety issues and difficult times finding quality employees. The company deals in supplies to major automakers and has recently seen great growth due to the surge in automotive sales over the last several years. Now the company has a need for expansion of its building and added equipment to produce the needed volume of parts to match the growth.Because they have had a short term perspective of the economy due to the downturn in 2008, the management has made decisions to pay the employees lower wages and fail to train them adequately which eventually have led to a 40% turnover rate. The company has recently spent millions of dollars on the expansion and canÃ¢â¬â¢t find employees that are willing to work for them due to the reputation they have. Poor cultures within a company can have long term effect on its continual growth and take many years to turn around even with the best strategic managers.