The advent of HRM has brought forward the issues of linkages between the employee-employer relationships and wider organizational strategies and corporate policies. So it is useful to understand the nature of strategies and strategic management.
A strategy is a way of doing something. It usually includes the formulation of a goal and set of action plans for accomplishment of that goal.
The concept of strategy is very old. It originated from the Greek term strategia which means the art or science of being general. Effective Greek generals needed to lead an army, win and hold territory, protect cities from invasion, destroy the enemy, and so forth. Each objective needed a different deployment of resources. The Greeks knew that strategy was more than fighting battles. Effective generals had to determine the right lines to supply, decide when to fight and when not to, and manage the army’s relationships with citizens, politicians and diplomats. Effective generals had, therefore, to plan and act. For Greeks, strategy had both a planning component and an action component; it is no different even today.
Strategic management may be understood as the process of formulating, implementing and evaluating business strategies to achieve organizational objectives. A more comprehensive definition of strategic management is:-
That set of managerial decisions and actions that determine the long-term performance of corporation. It includes environment scanning, strategy implementation and evaluation and control. The study of strategic management, therefore, emphasis monitoring and evaluating environmental opportunities and threats in the light of a corporation’s strengths and weaknesses.
Strategic management, therefore, involves four steps as given below:
- Analyze the opportunities and threats or constraints that exist in the external environment.
- Formulate strategies that will match the organization’s strengths and weaknesses with the environmental threats and opportunities.
- Implement the strategies.
- Evaluate and control activities to ensure that the organization’s objectives are achieved.