The Importance of Strategic Management to the Public and Private Sectors.

byOEDempire

56 followers

8 years ago

The relevance of strategic management in the twenty-first century is something that cannot be over-emphasized despite the fact that some notable figures in this field have expressed that it does not really count. In a world of economic, political, financial and social uncertainty, strategy is about creating and managing options such as the growth and flexibility options, which should help organizations become more profitable and socially responsible within the business environment they exists or co-exists with their customers and clients. (M. Porter and M. Kramer, 2011 )

The private sector, having small and medium scale business organizations to the multinational corporations have in many ways over the years embraced and enjoyed the myriads of benefits associated with the tactful use of strategic management. For instance, research shows that business organizations which are most successful are those that develop long-term shareholders's values, have strong and consistent ethical, structural and cultural values. That is to say these companies have good vision, and thus strategically positioning themselves for the emerging challenges of the present – creating competitive advantages, and also preparing for the future. This is seen in the formulation and implementation of the business practices and policies of companies like Wal-Mart, Proctor & Gamble, Disney and HP. (J. Collins & J. I Porras, 1996)

Creating values goes beyond merely generating wealth for shareholders or maintaining the status quo in business sustainability and profitability. As Porter and Kramer rightly put it, "It doesn’t have to be this way, companies could bring business and society back together if they redefined their purpose as creating shared value — generating economic value in a way that also produces value for society by addressing its challenges. Business organizations can do this in three distinct ways: by redeveloping products and markets, redefining productivity in the value chain, and building supportive industry communities at the company’s locations". (M. Porter and M. Kramer, 2011 )

All of these could be made possible with strategy, more effectively and efficiently and something that is indispensable because strategy is the pattern of objectives, purposes or goals coupled with the major policies and plans for achieving these goals, well defined in such a way as to know what business the organization is in or is to be in and the kind of business organization it is or is to be. (K. Andrews, 1971). Consequently, strategy is a business tool which is useful to all sectors, private, public and third, as the case maybe. This is why business organizations that enjoy enjoy enduring success have core purpose and core values that remain unchanged, while their strategies and practices continuously conform to a changing world. The special and core ability to balance continuity and change, which requires a planned and practiced discipline is well connected to strategy – developing a vision with a mission.