Text 2 Strategic management versus operational management
Strategic management is one of the special parts of management. It is aimed at the mission, external environmental problems, long-range planning, people, information technologies, at strategy development and its implementation in the market in the situation of changing environment.
One of the main aims of strategic management is to make people to things efficiently, the essence of its functions is coordination of all individual efforts fro the achieving company’s strategic objectives.
The five major goals of strategic management are shown below:
As for the five functions of strategic management, they are as follows:
- Strategy planning;
- Organization of strategic plans implementation;
- Coordination of actions by strategic plans implementation
- Motivation by results achieving;
- Control of strategy implementation.
In fact, for any company it is vital to have its strategic vision, so the executives have to answer the basic questions: How do we see our company? What are we going to do and to achieve? In What way can we achieve our objectives?
The strategic management principle, known in the best-managed companies, is: to achieve a sustainable competitive advantage, which contributes to a company performance better than the short-term profitability.
It is obviously that at first a company conducts the analysis of the environment, formulates its vision, mission and objectives, then it determines its strategic priorities, in other words it forms the mini-strategy of a company (MOS – mission, objectives, and strategic priorities).
The next step is the choice of techniques a company uses to achieve goals.
Doing so, a company determines the chain of actions for its staff for its successful operation into the market..
Taking all this into consideration, a company forms the strategic plan, formulates its strategy and starts its implementation. This plan represents the so-called “time schedule” of the company for a long period. The strategy implementation is a dynamic process, and the firm should control it continuously, taking into account the current situation. A company, willing to succeed, should analyze and estimate the results of its strategic plan, and include the proper changes in its implementation.
All these steps are of vital importance and they are in close interaction with each other. In no doubt is the fact that strategic management determines the company policy in a whole.
Additionally, it is well known that company uses the operational management considering the internal resources, and the entire company activity is based on the results of strategic management. Strategic management and operational management can be viewed as the two sides of the same coin. The main differences between them are as follows:
The main goal of a strategic management is the company survival in the long-term perspective, whereas the main task of the operational management is producing of product to ensure its profitability.
The strategic management is concerned at (with) the external resources; the operational management is concerned with (at) company’s internal recourses.
The basis of a strategic management includes personnel, information system and market; the basis of the operational management involves functions, organization structure, technologies etc. As it was said above, despite the differences, these two kinds of management are closely connected and necessary; they interact continually.
For the successful running of business, strategic management must be implemented by skilled and professional managers, who:
- Upgrade their skills in the strategic planning, strategy development, implementation and evaluation;
- Create the enabling environment for organizational growth and staff development;
- Apply their knowledge from the policy to practice.
In fact, the quality of company’s activity depends on the professionalism of its managers, and the significant improvement in management sometimes contributes more than any other factor.
In Conclusion, let us list some of the necessary managerial qualities and competences needed to master the strategic management:
- professional competence;
- good interpersonal and communication skills;
- analytical thinking;
- ability to manage people and time;
- knowledge of foreign languages;
- ability to compete efficiently.
Those are the most important competence, which any manager must master.
As for a span of control, it refers to the number of subordinates of a manager; six is the optimal number here. Six subordinates can be supervised by a manager most effective, but it depends on the business situation.
However, it is fair to say that managers are known to call innovative, daring, imaginative and even geniuses, if their decisions lead to the great results, but when their predictions haven’t come true, they can be called reckless, talentless and even charlatans. In making decisions, managers have to deal with huge numbers of unknown and uncertain factors and risk by conducting research of the competitive market. Nevertheless, they must exercise thought and judgment in order to introduce staff to support the company policy.
The ability to develop and implement effective strategies, procedures and work processes turned top management into the ruling business class of the 21st century. The traditional economies consider managers become the driving force in a global business environment.