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Strategic Management

Notes 3. It provides a framework for improved coordination and control of activities.
4. It minimizes the effects of adverse conditions and changes.
5. It allows decision-making to support established objectives.
6. It allows more effective allocation of time and resources to identified opportunities.
7. It allows fewer resources and less time to be devoted to correcting erroneous and ad hoc
decisions.
8. It creates a framework for internal communication among personnel.
9. It helps integrate the behaviour of individuals into a total effort.
10. It provides a basis for clarifying individual responsibilities.
11. It encourages forward thinking.
12. It provides a cooperative, integrated enthusiastic approach to tackling problems and
opportunities.
13. It encourages a favourable attitude towards change.
14. It gives a degree of discipline and formality to the management of a business.

1.6 Risks involved in Strategic Management

Strategic management is an intricate and complex process that takes an organisation into
unchartered territory. It does not provide a ready-to-use prescription for success. Instead, it
takes the organisation through a journey and offers a framework for addressing questions and
solving problems.
Strategic management is not, therefore, a guarantee for success; it can be dysfunctional if conducted
haphazardly. The following are its limitations:

1. It is a costly exercise in terms of the time that needs to be devoted to it by managers. The
negative effect of managers spending time away from their normal tasks may be quite
serious.
2. A negative effect may arise due to the non-fulfillment of the expectations of the participating
managers, leading to frustration and disappointment.
3. Another negative effect of strategic management may arise if those associated with the
formulation of strategy are not intimately involved in the implementation of strategies.
The participants in formulation of the policy may shirk their responsibility for the decisions
taken.
As quoted by Fred R. David, some pitfalls to watch for and avoid in strategic planning are:

1. Using strategic planning to control over decisions and resources
2. Doing strategic planning only to satisfy accreditation or regulatory requirements
3. Moving too hastily from mission development to strategy formulation

4. Failing to communicate the strategic plan to the employees, who continue working in the
dark
5. Top managers making many intuitive decisions that conflict with the formal plan

6. Top managers not actively supporting the strategic planning process
7. Failing to use plans as a standard for measuring performance

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