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Strategic Management

Notes activities such as planning, organising, leading or controlling. Rather, it integrates them into a
broader context taking into account the external environment and internal capabilities and the
organisation’s overall purpose and direction. Thus, strategic management involves those
management processes in organisations through which future impact of change is determined
and current decisions are taken to reach a desired future. In short, strategic management is about
envisioning the future and realizing it.

1.1 Definition of Strategic Management

We have so far discussed the concepts of strategic thinking, strategic decision-making and
strategic approach which, it is hoped, will serve as an a background understand the nature of
strategic management. However, to get an understanding of what goes on in strategic
management, it is useful to begin with definitions of strategic management. Later in the unit, we
introduce the elements and the process of strategic management and the importance, benefits
and limitations of strategic management.
As already mentioned, the concepts in strategic management have been developed by a number
of authors like Alfred Chandler, Kenneth Andrews, Igor Ansoff, William Glueck, Henry
Mintzberg, Michael E. Porter, Peter Drucker and a host of others. There are therefore several
definitions of strategic management. Some of the important definitions are:
1. “Strategic management is concerned with the determination of the basic long-term goals and the
objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary
for carrying out these goals”.
– Alfred Chandler, 1962

2. “Strategic management is a stream of decisions and actions which lead to the development of an
effective strategy or strategies to help achieve corporate objectives”.
– Glueck and Jauch, 1984

3. “Strategic management is a process of formulating, implementing and evaluating cross-functional
decisions that enable an organisation to achieve its objective”.
– Fed R David, 1997

4. “Strategic management is the set of decisions and actions resulting in the formulation and
implementation of plans designed to achieve a company’s objectives.”
– Pearce and Robinson, 1988

5. “Strategic management includes understanding the strategic position of an organisation, making
strategic choices for the future and turning strategy into action.”
– Johnson and Sholes, 2002

6. “Strategic management consists of the analysis, decisions, and actions an organisation undertakes in
order to create and sustain competitive advantages.”
– Dess, Lumpkin & Taylor, 2005

We observe from the above definitions that different authors have defined strategic management
in different ways. Note that the definition of Chandler that we have quoted above is from the
early 1960s, the period when strategic management was being recognized as a separate discipline.
This definition consists of three basic elements:
l. Determination of long-term goals

2. Adoption of courses of action
3. Allocation of resources to achieve those goals

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