What are the Advantages and Disadvantages of strategic management ?
The process of making judgments and carrying out activities that will mould and direct a company or other type of organisation is referred to as strategic management. This process includes creating objectives, conducting an analysis of the competitive environment, and identifying both internal and external elements that have the potential to have an effect on the business. The end goal of strategic management is to assist companies in achieving their goals and improving their performance. This is the ultimate purpose of strategic management .Lets have a look on some of the Advantages and Disadvantages of strategic management.
Advantages of strategic management
Strategic management is the process of making decisions and taking actions that will shape and guide a business or organization. This process involves setting goals, analyzing the competitive environment, and identifying external and internal factors that can affect the organization. Some of the main benefits of strategic management include:
- Better decision-making: Strategic management offers a framework and a set of tools for examining and weighing possibilities, which can assist leaders in making more knowledgeable and efficient judgments.
- Increased competitiveness: Strategic management can assist firms in positioning themselves in a way that enables them to compete more successfully by comprehending the competitive environment and recognising opportunities and risks.
- Better resource allocation: Organizations may identify their important resources and allocate them in the most efficient way with the aid of strategic management. By doing this, you can make sure that resources are used effectively and efficiently to support the objectives of the organisation.
- Enhanced organisational performances: Strategic management can assist businesses in enhancing their overall performance and achieving their goals by establishing clear goals and routinely assessing and modifying their strategy.
- Greater adaptability: Organizations can use strategic management to prepare for and react to changes in their internal and external environments. In a world that is changing quickly, this can help firms become more flexible and agile.
Disadvantages of strategic management
There are a number of advantages to strategic management, but there are also some possible drawbacks to take into account. Strategic management has a number of significant drawbacks, including:
- Time and money: Creating and carrying out a strategic plan might take a lot of effort. Developing intricate models and analysis as well as employing experts and performing market research might all be necessary.
- Complexity: Setting goals, analysing the competitive environment, and identifying internal and external elements are just a few of the numerous components that make up strategic management. For some people, this makes the process complicated and challenging to comprehend.
- Resistance to change: Changing an organization’s structure, procedures, or culture is frequently a part of strategic management. Some employees or stakeholders may object because they find the changes difficult to accept or because they are uncomfortable with them.
- Inaccurate predictions: Strategic management depends on predicting the future, including the business’s objectives, the competitive landscape, and external events that might have an impact on the firm. The resultant strategy might not work if these hypotheses are wrong.
Overall, even if strategic management has a lot of advantages, there are also challenges and limitations. Before selecting whether and how to apply a strategic management approach, organisations must carefully consider the possible advantages and disadvantages of strategic management.