Characteristics of Strategic Management
The Characteristics of Strategic Management are as follows:
- Top management involvement
- Requirement of large amounts of resources
- Affect the firms long-term prosperity
- Future-oriented
- Multi-functional or multi-business consequences
- Non-self-generative decisions
Top management involvement
Strategic management relates to several areas of a firm’s operations. So, it requires top management’s involvement.
Generally, only the top management has the perspective needed to understand the broad implications of its decisions and the power to authorise the necessary resource allocations.
Requirement of large amounts of resources
Strategic management requires the commitment of the firm to actions over an extended period of time. So, they require substantial resources, such as physical assets, 20 manpower etc.
Example: Decisions to expand geographically would have significant financial implications in terms of the need to build and support a new customer base.
Affect the firms long-term prosperity
Once a firm has committed itself to a particular strategy, its image and competitive advantage are tied to that strategy; its prosperity is dependent upon such a strategy for a long time.
Future-oriented
Strategic management encompasses forecasts, what is anticipated by the managers. In such decisions, the emphasis is on the development of projections that will enable the firm to select the most promising strategic options.
In the turbulent environment, a firm will succeed only if it takes a proactive stance towards change.
Multi-functional or multi-business consequences
Strategic management has complex implications for most areas of the firm. They impact various strategic business units especially in areas relating to customer-mix, competitive focus, organisational structure etc.
All these areas will be affected by allocations or reallocations of responsibilities and resources that result from these decisions.
Non-self-generative decisions
While strategic management may involve making decisions relatively infrequently, the organisation must have the preparedness to make strategic decisions at any point of time. That is why Ansoff calls them “non-self-generative decisions.
