Strategic management contains several components. This assignment will be a 3- to 4-page paper (excluding cover page and reference page) on the following topics related to strategic management.
You may use current articles related to strategic management to support your work. There should be at least three citations within the last five years of publication. Follow APA 7th edition format with writing at the scholarly level.
What role do each of the following play in strategic management?
• Define strategic management
• Introductory paragraph
• Organizational structure
• Politics
• Finance (including human capital, resources, and technology)
• Summary
Defining Strategic Management
Strategic management is the comprehensive set of actions an organization takes to determine and sustain superior performance. It moves beyond short-term tactical planning to encompass a holistic, future-oriented approach. This process typically involves three main stages: Strategy Formulation (developing a vision, mission, and setting objectives); Strategy Implementation (executing action plans, allocating resources, and managing organizational change); and Strategy Evaluation (measuring performance and taking corrective actions). The core goal is to align the organization's internal capabilities and resources with external market opportunities and threats (Hitt et al., 2022).
The Role of Organizational Structure in Strategic Management
Organizational structure defines how tasks are formally divided, grouped, and coordinated, playing a fundamental role in strategy implementation. The structure acts as the framework through which strategy is executed, directly influencing efficiency, communication, and adaptability.
Facilitating Implementation: A structure must be congruent with the chosen strategy (Chandler, 1962). For example, a firm pursuing a differentiation strategy (focused on innovation and speed) requires a flat, decentralized, and organic structure that promotes cross-functional collaboration and rapid decision-making. Conversely, a firm pursuing a cost leadership strategy benefits from a tall, centralized, and mechanistic structure that emphasizes efficiency and control. If the structure does not fit the strategy, implementation will be ineffective, leading to poor performance.
Defining Authority and Accountability: The structure clarifies reporting lines and defines responsibility for strategic outcomes. Clear delineation ensures accountability for key strategic tasks, such as launching a new product line or entering a new market.
Enabling Change: Strategy often requires significant internal change. The structure can either facilitate or impede this change. Rigid, siloed structures often resist the strategic shifts necessary to adapt to evolving market conditions (Hitt et al., 2022).
The Role of Politics in Strategic Management
Organizational politics refers to the informal, often unwritten, influence tactics and power dynamics used to achieve personal or group goals within the organization. While often viewed negatively, politics is an unavoidable reality that profoundly impacts the strategy formulation and implementation processes.
Resource Allocation: Politics often dictates how resources (e.g., funding, talent, technology access) are allocated across competing projects or departments. Managers with greater political acumen or influence may secure more resources for their units, regardless of objective strategic priority. This can lead to the misallocation of strategic assets if not properly managed by senior leadership (Ocasio, 2018).
Strategy Formulation Bias: Strategic decisions are rarely purely rational. Personal agendas, departmental interests, and the desire to protect existing power bases influence which strategic options are presented, debated, and ultimately chosen. A dominant coalition (a politically powerful group) often shapes the accepted organizational narrative regarding threats and opportunities, potentially leading to suboptimal choices that favor internal consensus over market reality.
Sample Answer
The Essential Components of Strategic Management
Strategic management is a continuous process that involves analyzing, formulating, implementing, and evaluating decisions that enable an organization to achieve its long-term objectives. It is the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives (David et al., 2021). Effective strategic management ensures an organization not only reacts to its environment but also proactively shapes its future, creating a sustainable competitive advantage. This paper will define strategic management and examine the critical roles played by organizational structure, internal politics, and finance (including human capital, resources, and technology) in the strategic process.