Strategic management offers significant advantages but also presents certain risks. It enables organizations to be proactive rather than reactive, establishing a clear sense of direction and enhancing overall performance. However, it can also be a time-consuming process and face application difficulties.
Benefits of Strategic Management
Here's a breakdown of the benefits:
- Proactive Approach: Strategic management allows companies to anticipate changes and respond effectively, rather than merely reacting to them.
- Clear Direction: It helps to establish a sense of direction, ensuring everyone in the organization is working towards the same goals.
- Operational Efficiency: Implementing strategic plans can lead to increased operational efficiency as resources are allocated more effectively.
- Market Share and Profitability: Properly executed strategies often result in an increase in market share and profitability.
- Business Durability: Strategic management enhances long-term business durability, helping the company survive and thrive in a competitive environment.
In essence, strategic management helps organizations move from simply surviving to actively shaping their future.
Risks of Strategic Management
While the benefits are substantial, strategic management also involves potential downsides:
- Application Difficulties: Successfully implementing strategic plans can be challenging, leading to application difficulties.
- Time-Consuming Process: Developing and executing strategic plans is inherently a time-consuming process, requiring significant investment of resources.
The challenges in application can stem from various sources, including resistance to change, poor communication, or lack of adequate resources. The time commitment can also be a strain, especially for smaller organizations.
Here's a summarized view:
| Benefit | Risk |
|---|---|
| Proactive organization | Application difficulties |
| Establish a sense of direction | Time-consuming process |
| Increased operational efficiency | |
| Increase market share and profitability | |
| Increased business durability |
