Over the last few decades, the business framework in the global scenario has undergone considerable changes and modifications much of which can be attributed to the changing demands of the customers across the world as well as to the changes in the supply side scenarios in almost all the industries. The global phenomena like that of globalization as well as liberalizations of different economies have contributed in making the business environment more integrated and internationally inclusive with different commercial institutions expanding their operational activities across different geographical domains as well as in different markets (Ferraro & Briody, 2017). This in turn has resulted in an increase in the number of players in the supply side of the industries, with the inclusion of international suppliers along with increased domestic suppliers.
This increase in the supply side dynamics along with the consistently changing preference patterns of the customers have resulted in increasing levels of competitions among the different business organizations. With time, these commercial organizations have felt the need to keep on modifying the changing their operational structures and to keep on investing in innovation, not only in their production process but also in their overall thought process, so as to stay ahead of their competitors. With the increase of such needs, has developed the concept of “Strategic Management” in the business scenarios across the world (Verbeke, 2013).
The concept of “Strategic Management” in general deals with the techniques and processes which the managers of the contemporary business organizations implement so as to contribute to the efficiency in the production process of the organization as well as in the overall operational structure of the same, to earn long term prospects, profitability and sustainability in the market. With time, this concept of strategic management of commercial institutions has also undergone considerable dynamics with many modifications and inclusions being incorporated, with the continuously changing demands in their operational framework, such that they stay afloat in the increasing competition (Grant, 2016). There are substantial scholarly evidences and literary works in this aspect, which explores the different aspects of strategic management and the new ideas and models developing in this field. Keeping this into consideration, an extensive review of the existing literatures regarding the concept of strategic management and its need, implications as well as the new thinking and development of ideas in this respect is conducted in the following section of the report. The report tries to critically analyze and evaluate these literary evidences and also tries to find the gaps present in the existing literary frameworks.
There have been considerable literary works across the world in the field of strategic management in the commercial scenarios, with the increase in the importance of the same given the consistently rising competition and operational dynamics in almost all the commercial fields across the globe.
The term “Strategic Management” being multidimensional and broad, incorporating different aspects of the business structures, different scholars have tried to define the same from various perspectives. In this aspect, one of the most comprehensive and inclusive definition of this concept is provided by (Slack, 2015), in his elaborate work on the different operational strategies of the commercial organizations. The author defines the concept of Strategic Management to be the framework which deals with the identification and implementation of different strategies by the management of the commercial organizations, which help the same in carrying out their activities related to production and business more efficiently, thereby increasing their efficiency and improving their performances. According to him, the implementation of proper strategic management framework in the business organizations helps the same to gain competitive advantages over their rivals in terms of higher profitability and sustainability in the long run. However, the definition provided by him, was not wholesome and had several gaps, which were filled by the ideas put forward by different authors.
The assertions of the previous author regarding the concept of strategic management is augmented by (Hitt, et al., 2012), who defines the same as the bundle of decisions, which not only involve the management of the business organizations but also the employees in every strata of the same, which are taken for the increased welfare of the organizations as well as the members of the same. These strategies and decisions, according to the authors, not only require a thorough knowledge about the concerned organization and its operational structure, but also require credible information about the overall business environment in which the organization operates. These external business environments include the presence of competitors, the inherent strengths and weaknesses of the organization as well as that of its competitors, the opportunities and threats present in the markets and other similar factors.
(Rothaermel, 2015), in this context, summarizes the entire notion of strategic management in the contemporary commercial scenario, to be the set of strategies and decisions taken by the management of the commercial institutions, in the aspects of running the operations and managing the scarce resources of production efficiently, such that the concerned companies can achieve their objectives of profit maximization and expansion effectively. According to him, the decisions are not always planned and are often taken impromptu for tackling both predictable and also the unfeasible contingencies which arise in the operational framework of the companies.
The concept of strategic management, though being a comparatively new concept in commercial framework, in the global scenario, has its roots in the commercial operations of decades ago. This is discussed in the following section.
(Eden & Ackermann, 2013), in their working paper, try to develop the timeline of the journey of development of strategic management as a concept and the path of its evolution with the changing global commercial scenario. According to them, the notion of strategic management, as a proper discipline in the contemporary business scenario, evolved in the 1950s and 1960s with the global business environment becoming more integrated, cognitive and competitive.
However, the authors, in spite of providing authentic information regarding origin and evolution of the concept and discipline of strategic management in the global framework, however fails to provide the reasons behind the need for such a framework in the businesses in the contemporary period. In this context, some productive works can be seen to be done in the paper of (Hair, 2015). Hair, in his paper, tracks down the need for the origin of the conceptual framework of strategic management and its implementation in the global business scenario. As per the assertions of the author, prior to the emergence of the notion of strategic business management, the different functions in the operational structures of the businesses worldwide, used to perform separately by separate departments within the businesses, with little coordination among these activities. This in turn led to discrepancies and inefficient information flow among the different related departments, thereby leading to lack of synchronization among the activities, which in turn resulted in efficient usage of the scarce resources and untimely actions, thereby creating negative implications on the businesses in the long run (Nooraie, 2012).
This problem went on increasing with the increasing complexities and dimensions of the businesses and with more businesses increasing their domain of operations in new geographical areas as well as in different products and services markets. (Joyce, 2015), in this context, also pointed out that with the increase in the number of external as well as internal factors affecting the businesses, it became crucial for the managers of such organizations to develop a robust strategic framework to cohesively deal with all the factors such that the business operations of their organizations could be run in an efficient and timely manner. The strategic management framework, according to the author, originated from the perception of the need of decision making structures, able enough to deal with any anticipated as well as unprecedented situations arising in the business activities.
Strategic management, as a discipline, has developed, over the years, as one of the most crucial components of businesses of all size and natures, in the contemporary period. There are various reasons behind the rising importance of the same, as has been stated by many scholars across the world, over the years. The primary roles of the strategic management framework in the contemporary business scenarios are as follows:
These, along with the other responsibilities falling under the strategic management framework of the companies, makes the concept of strategic management and its presence extremely crucial in the contemporary business organizations, in order to augment the domain of operations of the same, their efficiencies in production, resource management and client handling. A robust strategic management construct in a company is expected to contribute positively in the short term as well as long term profitability, prospects, clientele and sustainability of the same, by helping the company to gain a competitive edge over its rivals (Goetsch & Davis, 2014).
Since the origin of the concept of strategic management in the global commercial scenario, the framework of the same has undergone considerable changes and inclusions, in order to cater to the changing needs of the customers as well as the increasing competitions among the supply side providers of almost all the industries. There are substantial literary works which discuss about the different models and innovations in this aspect, which is discussed in this section of the literature review.
(Afonina & Chalupský, 2012), in their working paper elaborate about the existing models prevailing in the domain of strategic management in the contemporary global business situations. The different popularly used models used in this aspect, as highlighted by the authors and their purposes are discussed as follows:
However, both the BSC and strategy map methods of strategic management constricts the actions to that of planning and structuring the actions of the companies and do not help in identifying the internal strengths and weaknesses of the company and the possible opportunities and threats faced by the same.
These models, try to take into account the broad aspects of production and sales related activities in the companies. However, with time, the strategic management framework has also experienced development of models which are more targeted and which deal with prevention and management of specific issues. Some of these are as follows:
As can be seen from the above discussion, the new strategies designed and implemented in the domain of strategic management in the commercial scenario, are emphasizing more on wholesome coverage of all the operational activities of the firms rather than making one particular construct for all the contingencies. This is where strategies like Blue Ocean and War Game Simulation differ from the old ones like SWOT, PESTLE and Porter’s Five Forces. The new ones help the management to get a clear view of all the aspects of businesses and also helps them in making arrangements for anticipated as well as unanticipated contingencies and also in expanding their prospects in a highly competitive framework (Dehkordi, et al., 2012). The complex and innovative frameworks of the new strategies also help in taking into account greater number of problems and in finding the effective solutions to the same, thereby increasing the efficiency of the commercial organizations.
However, these frameworks, in spite of being inclusive of many factors are still found to be fundamental and the major problem of these methods is that they are useful mostly for long term and anticipated situations, which are observed with the help of the structures of the models as asserted by (Taneja, et al., 2013). However, there remain many factors and situations which cannot be measured cardinally or in ordinal ways and which crops up unprecedentedly. Keeping this into consideration, several changes are being made in this framework, as can be seen from the VRIO or War Gaming Model.
Conclusion
From the above literature review, it can be asserted that strategic management has been becoming one of the primary components in the contemporary business framework in the global scenario. With the increase in the importance of more efficiency and effectiveness of the operational structure, in the increasingly competition in every industrial aspects, it becomes crucial to develop new and cognitive ideas in the strategic management framework of the companies. The methods have changed over the years, becoming more efficient, ordinal and multidimensional in order to cater to the changing needs. However, as can be seen from existing literatures, there still remain several gaps and limitations in the aspect of construction of one wholesome strategic management method, which can help the companies to combat any anticipated as well as unanticipated changes in the market and to stay ahead of their competitors.
References
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