Strategic management includes strategic planning, implementation and review/control of the strategy of an organization. All most all the modern organizations engage in strategic management to ensure that they achieve the desired level of performance. But in the modern business context strategic management faces many challenges such as:
Every aspect of the business is getting globalised and business organizations step in to global operations with MNC and other foreign business operations methods. Due to the globlised operations of the business world there are new orientations such as international human resource management (IHRM) and international finance are emerging. Company’s strategic management process has to be updated to cope up with these new orientations.
With the wide expansion of world wide wed (www) and the technology businesses have moved on to e-commerce where they conduct business electronic means such as online purchasing/selling and online advertising. Strategic management process of the business should be able to accommodate e-commerce motives into the business process.
With the globalization, e-commerce and other changes in the business environment, todays business world has become hyper competitive where the organization can no longer survive without executing proper competitive strategy. Strategic management process should generate competitive intelligence and predict the next moves of the competitors and build the competitive strategy to win the battle with competitors.
With the rapid changing business environment and increased uncertainty the business risk has increased drastically. To diversify the business risk companies now engage in diversified operations where they focus on more than one business area/industry rather than specializing in one area. The strategic management should be able to identify diversified business opportunities and manage them well.
In the modern world there are active pressure groups operating such as environmental activism and consumer protectionism. Strategic management should identify these external pressure groups and hear about their concerns.
The modern business organizations have engage in CSR and ethics to keep up their corporate reputation and be competitive in the environment. Strategic management should look into possible CSR activities and implement those to be in line with expectations of the society.
Note of Credits : This is article is based on a lecture done by Mr. Marlon Gunasekara at APIIT-Sri Lanka on Strategic Management on 14/12/2010