Benefits of Strategic Management
"Research has revealed that organisations that engage in strategic management generally out-perform those that do not"
The connotation of the ancient Greek word "strategos", in its various grammatical forms, implies meaning of skilful manoeuvouring leading to achieving a highly crucial position or attaining a desired end. Commonly associated with the military operations, strategies aim at methodical out-performance of adversaries. Analogically, application of deliberate strategies in the business management context suggests combination of activities directed at becoming superior to business opponents. Hence, it can be assumed that engaging in these activities will produce better business results than not doing so.
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Industrial leaders and management theorists realised that environmental changes are constant and unavoidable and the search for the optimal performance was transforming into the search for survival. Competition, technological advances and the increasingly international nature of the business changed its context into the war-like area requiring a strategic approach in order to survive. Initially, the essence of the strategic approach, as stated by the Harvard Business School, was "to match the internal capabilities of the organisation with the demands of the environment" (Hubbard, 2000, p.3). It was then further defined by the works of Porter (Hubbard, 2000, p.3) to analysis of a particular industry and establishing generic strategies. Recent research underlines the need of flexibility in strategic management caused but hypercompetition. Farjourn (2002) observes that as the mechanistic theories like SCP (Strategy-Conduct-Performance) or SSP (Strategy-Structure-Performance) and design models like SWOT (Strengths, Weaknesses, Opportunities and Threats) proved to be suitable only to a stable and predictable world, a new organic perspective has emerged, which addresses time, continuity and iteration of processes.
Historical review of the management theory sets the context and reasons for