Benefits of Strategic Management
Benefits of Strategic management Following are the benefits of s-m. Financial benefits: ?? Improved productivity ?? Improved sales ?? Improved profitability Research indicates that organizations using strategic-management concepts are more profitable and successful than those that do not. Businesses using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities.
High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments. Non- financial Benefits ?? Increased employee productivity ?? Improved understanding of competitors’ strategies ?? Greater awareness of external threats ?? Better problem-avoidance Strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of competitors’ strategies, increased employee productivity, and a clearer understanding of performance-reward relationships.
Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among manager’s at all divisional and functional levels. Interaction can enable firms to turn on their managers and employees by nurturing them, sharing organizational objectives with them, empowering them to help improve the product or service, and recognizing their contributions. In addition to empowering managers and employees, strategic management often brings order and discipline to floundering firm.
Strategic management may renew confidence in the current business strategy or point to the need for corrective actions. The strategic-management process provides a basis for identifying and rationalizing the need for change to all managers and employees of a firm; it helps them view change as an opportunity rather than a threat.
Greenly stated that strategic management offers the following benefits: 1. It allows for identification, prioritization, and exploitation of opportunities. . It provides an objective view of management problems. 3.
It represents a framework for improved coordination and control of activities. 4. It minimizes the effects of adverse conditions and changes. 5. It allows major decisions to better support established objectives. 6.
It allows more effective allocation of time and resources to identified opportunities. 7. It allows fewer resources and less time to be devoted to correcting erroneous or ad hoc decisions. 8.
It creates a framework for internal communication among personnel.
9. It helps integrate the behavior of individuals into a total effort. 10. It provides a basis for clarifying individual responsibilities. 11. It encourages forward thinking.
12. It provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities. 13. It encourages a favorable attitude toward change. 14.
It gives a degree of discipline and formality to the management of a business.