Strategic management is an ongoing process whereby managers monitor, analyze, and assess an organization’s assets and liabilities to make sure that everything is in order. The entire process verifies that the organization is on course to achieving both long and short-term objectives.
The main goal of strategic management is profitability. Companies are in business to make money. Without proper planning, the firm could lose a lot of money.
Strategic management is also done to make sure that employees are on board with the company’s plan. Since the workers are responsible for helping the organization succeed, they have to know what is expected from them. Strategic management helps to define roles and responsibilities. It is also done to make sure that company resources are used properly. Misuse of resources could lead to high maintenance costs.
Strategic management is important today because businesses face a lot of competition from online firms. Companies cannot afford to waste money on ventures that will not give them any profits. Modern startups are run by ambitious young people that are very tech-savvy. To keep up with the competition, organizations have to plan strategically—for example, a blue-chip company has a large capital base. The firm can use that strength to its advantage—for example, it could buy out smaller competing firms.