Strategic management

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Process flow of strategic management

In business administration, strategic management is a management function that deals with the development, planning and implementation of content- related goals and orientations of organizations . The planning horizons in strategic management usually span two to five years, whereby strategic is not to be equated with long-term , but strategic plans usually have a longer-term time horizon.

General

Due to the strong overlap of the topic with questions of the product policy of marketing and the importance for the stakeholders of the company, the strategic management corresponds strongly with the concept of corporate management . In the St. Gallen management model you can see how strategic management interacts with other areas of management.

Origin of the term

The term “ strategy ” found its way into business administration, particularly through considerations in the context of game theory . The strategy here represents a player's “complete” plan, which allows him to make the right decision in all conceivable game situations. The discipline “Business Policy”, which goes back in particular to the Harvard Business School, provided further impetus for developing an understanding of corporate strategy. When dealing with fundamental business decisions, questions about the direction of future corporate activities increasingly came to the fore.

In business planning theory, the concept of strategy has undergone considerable differentiation since its introduction. According to the broad strategy definition (e.g. Chandler), the strategy includes the definition of the basic corporate goals and the associated measures to achieve these goals. A very narrow strategy definition, on the other hand, only includes situation-related measures (game theory interpretation, Szyperski / Winand).

The following three representatives form the basis for developing strategic management theories.

  • Chandler (1962) - "Strategy and Structures"
    • made the term strategy "socially acceptable"
    • showed for the first time the connection between strategy and structure
  • Ansoff (1965) - "Corporate Strategy"
    • laid the foundation for strategic management at company level
  • Andrews (1971) - "Concept of Corporate Strategy"
    • laid the foundation for strategic management at the business unit level.

Objects of strategic management

There are three objects of strategic management to be mentioned:

1. Strategies

  • determine the business direction of a company
  • set long-term business goals
  • determine how the company should position itself in the market
  • identify and develop competitive resources

2. Structures

  • Shaping the company
  • defines the type of division of labor
  • coordinates the work-sharing task fulfillment

3. Systems

  • Company infrastructure
  • Tools for running the company
  • Management information system
  • Management incentive system

Strategic Management Levels

Since there are different organizational structures in a company, these must also be considered in relation to strategic management. There are two levels to consider here. On the one hand the level on a company basis and on the other hand the business field basis. In addition to these internal company perspectives, two external aggregation levels can also be defined within the framework of the strategic analysis with the branch level and the superordinate macro level (see also phases of strategic management ).

Strategic Management Levels
Strategic management Strategic decision advantage success
At company level Corporate strategy, structures, systems "Parenting Advantage" (as a business owner) Success of the entire company
At the business level Competitive strategy, structures, systems Competitive advantage (in a business) Success of individual business areas

Company level

The goal of strategic management is more and more often not only to maximize profits, but to increase the company value through company growth . At company level this includes a. the design of the business field portfolio in order to optimally distribute the company's resources to the individual business fields, as well as the strategic design of the company's structures and systems.

Business area level

At the business unit level, the question arises as to how the company has to act optimally in the individual businesses in order to remain successful in competition. In order to guarantee this, competitive advantages must be created and used. A separate strategy must be developed for each individual business area ( strategic business area ). This means that companies have their own strategy for each of its business areas, which is held together by the overall strategy (corporate strategy).

Industry level

Both company and business unit levels are influenced by the corporate environment, so that this must also be taken into account in the context of strategic management. The industry environment includes the direct threats within an industry, as ported by Porter in his model of the industry structure analysis. Another instrument for analyzing the branch level are strategic groups , which differentiate companies based on their strategic proximity to one another.

Macro level

In addition to the direct influences of the industry, there are many other interdependencies that a company must take into account in terms of strategic management. These usually result from overlapping conditions that determine the scope of action of several companies. These influences on the macro level can be examined by analyzing the global corporate environment. A widely used model for analyzing the global corporate environment is the STEP analysis .

Phases of strategic management

1 phase: [analysis]

The analysis phase consists of two essential parts, the analysis of the environment and the analysis of the company. The former includes the competition analysis as well as the industry structure and industry dynamics analysis. The latter is intended to create an objective picture of the company's current and future strengths and weaknesses in order to withstand risks and take advantage of opportunities (see SWOT analysis ).

2 phase: [planning]

Since a basic function of management is the formulation of goals and goals determine the long-term development of the company, their formulation in the context of strategic management is of great importance. Strategic goals serve to align and orientate strategic planning. If there are no long-term goals, the strategic management runs the risk of only acting in the short term and thus losing sight of long-term, strategic plans . Since strategic goals are not simply given, they have to be planned or formulated in the strategy process, set in relation and concretized. The goals have the following functions: selection function, orientation function, control function, coordination function, motivation and incentive function, evaluation function and control function.

3 phase: [strategy formulation and evaluation]

The core area of ​​strategic management is the strategy formulation phase. In this phase, a strategy for target achievement is developed that does justice to the information from the environment analysis and company analysis. Since there is not just one possible strategy, the strategy variants must also be evaluated according to the target definition ( strategy evaluation ). The effects on earnings and corporate risk, especially the risk of insolvency , must be taken into account.

4 phase: [implementation]

Concrete, strategy-guided action by company members. If it is not possible to implement strategies efficiently, then the strategic management remains ineffective and a mere "intellectual gimmick".

In addition, a final control phase and process-accompanying strategic controlling are necessary.

Basic perspectives of strategic management

The discussions about corporate strategy can be sorted according to the most varied pairs of opposites. The most important questions for practice and theoretical reflection are:

  • whether the generation of strategic planning (should) only take place at the top of the company or whether it doesn't make sense to take initiatives that develop elsewhere in the hierarchy into account
  • whether strategic management should only pursue the goal of maximizing the company's profit or whether it does not make sense to at least take into account a broader target range, such as social or ecological goals
  • whether one should primarily develop prescriptive normative strategies when dealing with strategic management or whether one should not also, perhaps even focus on the description and analysis of real strategic processes.

Relevant approaches to strategic management

In the analysis of the reasons for the strategic or competitive success of companies, three explanatory models have emerged in the economic literature:

A further development that seeks to integrate the market and resource-based view is the dynamic capabilities approach .

criticism

The term strategic management is only slightly defined, which makes it universally applicable, but dilutes the essential content. That turns the term into a kind of catchphrase . Due to its long-term orientation, strategic management cannot offer any solutions for specific problems. These must be found in the context of tactical decisions and operational processes based on strategic specifications.

One caveat is that in implementation there is often the risk of orienting yourself too closely to categorical, strategic models and thus preventing creative processes within a company. Furthermore, orientation towards the past in finding strategies and the preference for fact-based, hard data in strategic decision-making processes are criticized. Often too little attention is paid to soft factors, see also the 7-S model .

It is also criticized that strategic management often delivers primarily "qualitative" models with little informative value and little concrete benefit for corporate management. This criticism is right to the extent that standardized strategy models can only ever offer a basic grid for analyzing and obtaining basic data on the facts under consideration.

The accusation that is often raised that the use of strategic management and the associated instruments cannot generate any quantifiable additional profits in corporate activities can be countered with two points:

On the one hand, concrete and quantifiable value creation can only take place in the actual, operational activity of a company . According to the widespread opinion that strategic activities are tasks of dispositive positions from a production factorial perspective, a concrete, comprehensible causal chain between management and object-related, operational service provision is difficult to establish. This also makes a reliable quantification of the efficiency gains associated with the use of strategic management tools more difficult.

However, this is possible with comprehensive key figure models such as the classic ROI scheme from DuPont , the ZVEI system or the Tableau de Bord model.

On the other hand, strategic models and instruments can only provide clues for recommendations for action. In this respect, the concrete success and the associated additional income is inseparably linked to the quality of strategic and tactical operationalization as well as the operational implementation of these recommendations for action.

See also

literature

  • Franz Xaver Bea, Jürgen Haas: Strategic Management. 9th edition. UTB, Stuttgart 2017, ISBN 978-3-8252-8707-8 .
  • Hans Corsten, Martina Corsten: Introduction to Strategic Management. 1st edition. UTB, Stuttgart 2012, ISBN 978-3-8252-8487-9 .
  • Harald Hungenberg: Strategic Management in Companies. Goals - Processes - Procedures. 8th edition. Springer Gabler, Wiesbaden 2014, ISBN 978-3-658-06680-2 .
  • Martin K. Welge , Andreas Al-Laham , Marc Eulerich : Strategic Management. Basics - Process - Implementation. 7th edition. Springer, Wiesbaden 2017, ISBN 978-3-658-10647-8 .
  • Robert M. Grant, Michael Nippa: Strategic Management - Analysis, Development and Implementation of Corporate Strategies. 5th edition. Pearson studies, Munich 2006.
  • Hans H. Hinterhuber : Strategic corporate management - 1. Strategic thinking: vision, corporate policy, strategy. 7th edition. Berlin 2004.
  • Henry Mintzberg : Strategy formation: Schools of thought. In: J. Frederickson (Ed.): Perspektives on strategic management. Boston 1990, pp. 105-235.
  • Cynthia A. Montgomery, Michael E. Porter (Eds.): Strategy. Seeking and Securing Competitive Advantage. Harvard Business Press, Boston Mass 1991.
  • Günter Müller-Stewens, Christoph Lechner: Strategic Management. How strategic initiatives lead to change. 5th edition. Schäffer-Poeschel, Stuttgart 2016, ISBN 978-3-7992-6982-7 .
  • Michael E. Porter : How competitive forces shape strategy. In: Harvard Business Review. Vol. 57, March-April 1979, pp. 137-156. (Also in: Henry Mintzberg, James Brian Quinn: The Strategy Process - Concepts and Contexts. 2nd edition. Prentice Hall, Englewood Cliffs NJ 1992, pp. 61–70)
  • Ewald Scherm , Christian Julmi: Strategic Management. Theory, decision, reflection. De Gruyter, Berlin / Boston, ISBN 978-3-11-054049-9 .
  • Dieter Schneider: Corporate management and strategic controlling - superior instruments and methods. 4th edition. Munich 2005.
  • Georg Schreyögg : corporate strategy. Basic questions of a theory of strategic management. Berlin / New York 1984.
  • R. Whittington: What is strategy - and does it matter? London 1993.
  • AD Chandler: Strategy and Structure in the History of the American Enterprise. Cambridge / Mass. 1962.
  • Norbert Szyperski, U. Winand: Basic concepts of corporate planning. Stuttgart 1980.
  • Harry Igor Ansoff : Management Strategy. Verlag Moderne Industrie, 1966. (Original title "Corporate Strategy")
  • K. Andrews: The Concept of Corporate Strategy. Homewood 1971. (First published as: E. Learned, C. Christensen, K. Andrews, W. Guth: Business Policy. Homewood 1965)

Individual evidence

  1. ^ A b Harald Hungenberg: Strategic Management in Companies. 2nd Edition. Gabler, Wiesbaden 2001.
  2. ^ Dwivedi Mau Sheldrick: The Evolving Physiology of Government: Canadian Public Administration in Transition. 1st edition. Univ. Of Ottawa, 2009, ISBN 978-0-7766-0706-1 .
  3. Gert L Kootstra: Designmanagement: design effectief benutten om ondernemingssucces te creëren. 1st edition. Pearson Education Benelux, 2006, ISBN 90-430-1172-X .
  4. ^ Martin K. Welge, Andreas Al-Laham: Strategic Management. 3. Edition. Gabler, Wiesbaden 2001, p. 97.