Definition of Strategic Management

What is strategic management?

Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm's objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually indicated by the board of directors and executed by the firm's Chief Executive Officer (CEO) and executive team. Strategic management hopes to provide overall direction to the company has ties to the field of organization studies.
"Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment." (Lamb, 1984)
Generally, there are two main ideologies which dictate the approach taken, these are opposite but complement each other in some ways, to strategic management:
• The Industrial Organizational Approach o centered on economic theory — tackles issues like competitive rivalry, resource allocation and economies of scale o assumptions — rationality, self discipline behavior, profit maximization
• The Sociological Approach o deals mainly with human interactions