A Note on Strategic Management For Organisational Performance

Strategic Management is an integral aspect of successful management that takes into account specifically what is the correct decision, strategy, personnel requirements and goal of an organisation to ensure it survives and thrives within its competitive market. It is a basic strategic plan of how the organisation is to get from where it is to where it would like to be; encompassing all functions of the company to determine a correct business model to secure economic viability and success.

Studies have shown that there is a positive relationship between strategic planning within an organisation and higher levels of performance (Reimann, Schlike and Thomas, 2010). It is due to this relationship that strategic management is of vital importance to the success of the organisation.

Strategic Management follows a strict process that involves planning, implementation and evaluation. The process is as follows: identifying the organisation’s current mission, goals and strategy, then conducting an external analysis to decipher the opportunities available to seize and threats impacting on the company to buffer against, followed by an internal analysis about the organisation’s current resources and capabilities including its financial, physical, human and intangible resources, which is then used to determine the organisation’s strengths and weaknesses, formulating a strategy from this information, followed by implementation of the strategies and then further evaluation of the results in order to determine whether there is a need to revaluate any of the preceding steps to correct strategic management in order to obtain organisational goals.

With this strategic process in mind, strategic management is closely related to HR and talent management. Through the internal analysis of the organisation, the validity of personnel is taken into consideration when analysing the company’s strengths and weaknesses. This analysis can have either a positive or negative effect on employee relations, given that the performance review of each employee could deem them either beneficial to the organisation or labelled as a weakness of the organisation. The role of Human Resource Management then comes into play through its role of being a strategic partner to management (Sheehan, De Cieri and Holland, 2013), implementing the changes necessary to align all employees with the goals set through the strategic management process.

The working environment created by an organisation can have direct impact on the quality of work and commitment of employees. This workplace environment can be seen as being a direct result of the management style, leadership style and culture created within an organisation. Research has shown that ethical leadership is vital in fostering positive outcomes within an organisation; particularly related to employee satisfaction (Avey, Wernsing & Palanski, 2012). Improving relationships between employer and employee as part of the Employment Relations system leads to increased motivation of employees; increasing the individual’s efforts towards attaining organisational goals (Steers, Mowday and Shapiro, 2004). This school of thought remains vital to the implementation of strategic management processes, through soft HRM practices focussing on the employee as an asset (Sheehan et al, 2013).

Listening to employees desires and needs and treating them as an integral part of the success of operations benefits the organisation as a whole through continued commitment of employees and growth of the firm, with many employees committed to the organisation long term due to the high level of employee focus within the management strategy. This level of employee productivity and commitment is in stark contrast to management styles that lack direction and employee focus, where significant levels of conflict can be seen to arise at all levels of management through to front line employees, through a lack of managerial direction (does the story of Grocon’s waring executives and poor safety records ring a bell with anyone?).

Strategic management provides an organisation with a means for identifying trends, prioritising, and exploring new opportunities; making it possible to prepare for new markets and business directions to ensure organisational mobility and success in the future.

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