Strategical System Understanding Strategic Systems

¶ … Strategical System

Understanding Strategic Systems and Strategic Management

It is difficult to find the proper commencement on the analysis of the contemporaneous business community. The academic sources on the topic are countless, and each author emphasizes on the past and emergent changes that they find most relevant. Some economists focus on the increasing role of the customer in achieving organizational success. Others focus on the major role played by technological innovations in increasing operational efficiency, as well as improving customer communications. A third group of sources is focused on the corporate attitudes towards the employees, who have metamorphosed from the force operating the machines into the companies' most valuable assets. All these changes can however be related to a commonality of the same causes and goals. In this order of ideas, the cause generating mutations revolves around the growing competition (present from the local to the global level) and the goal of all the changes is that of consolidating a strong competitive position and registering increased levels of profitability.

With this desiderate in mind, corporate managers develop and implement a wide series of strategic approaches. Some of the most outstanding courses of action refer to increasing the motivation and performances of the staff members, reducing operational costs and increasing operational efficiency, increasing customer satisfaction and so on. All these approaches, alongside with a large number of additional decisions, are organized under the term of strategic management. For the company to retrieve success from its strategic implementations, the stratagems must be employed at all organizational levels and throughout the entire system.

The primary thesis here is that understanding the strategic system is pivotal in succeeding as an organization. In proving the rights of this statement, one must first look at the simple definitions of the concepts involved. In this order of ideas, the Longman Dictionary of Contemporary English defines the system as "a group of related parts that work together as a whole for a particular purpose." Their definition of the organization is that of "a group such as a club or business that has formed for a particular purpose." The basic observation of these definitions retrieves the conclusion that the organization is in fact a system, or a group of several parts, unified to reach a common objective.

In order for the established goals to be achieved, the individuals in the system must develop and implement a wide array of strategic courses of action. The Longman dictionary defines the strategy as a "planned series of actions for achieving something." The importance of understanding the strategic system is then determined by the need to understand each organizational group, or level, identify its problems and implement the required strategies that ensure its success. In other words, the organization reaches its objectives through strategies implemented at all system levels, ergo the importance of the strategic system in properly managing for-profit and not-for-profit institutions.

In better understanding the strategic system, one must be able to recognize the features which differentiate it from a traditional system. The traditional system generally offers solutions to the existent problems and ensures the proper functionality of organizational groups. Strategic systems take one step further and identify potential solutions that improve the organizational performances. For instance, while the traditional system may only care to ensure the allocation of resources, the strategic system will focus on the efficient allocation of the resources. "A strategic system fundamentally changes the way the organization conducts business or competes in the market place. A strategic system significantly improves overall business performance with results that can be measured by multiple indicators. These multiple indicators include measured performance increases and noticeable improvement on the organization's financial statement" (Cannon, Bergmann and Pamplin, 2006).

In order for a strategic system to stand increased chances of success, it must simultaneously meet three desiderates:

the system must be unique and must have the ability to attract targets and new development and 'attack' opportunities secondly, the strategic system must be able to identify problems and close the gaps which prevent the organization from reaching its objectives finally, the third requirement refers to the effectiveness of "how the system attacks particular sets of targets: the timeline and size of attack (understood here as organizational strategy) necessary to achieve a successful outcome and the operational uncertainties affecting the readiness, usability and effectiveness of the system in various situations" (Betts, 1981)

The specialized literature is filled with references to strategic management and the reason for it are simple - strategic management actually works (Joyce and Woods, 2001). Various definitions of the concept have been forwarded, and while they are generally presented in different words, they seem to be revolving around the same principles. Some of the most relevant definitions of strategic management are presented below:

Strategic management is fundamentally about setting the underpinning aims of an organization, choosing the most appropriate goals towards those aims and fulfilling both over time" (Thompson, quoted by Karami, 2007)

Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives" (David, quoted by Karami, 2007)

Strategic management is the process of articulating a future vision of accomplishment for an organization and planning, directing and controlling the organization's entire range of activities to work toward the desired state or position" (Tyndall and Cameron, 1990).

The field of strategic management deals with:

a) the major intended and emergent changes b) taken by general managers on behalf to owners involving the utilization of resources d) to enhance the performance e) of firms f) in their external environments" (Fritz, 2008).

To summarize the definitions above and integrate them in a simple formulation, strategic management seems to represent the totality of tools and mechanisms employed in reaching organizational goals. These tools and mechanisms may refer to decision making processes, problem identification processes, market research, human resource motivation and evaluation, seizing external opportunities and so on. What must be remembered is that strategic management is not a solitary action, but a way of conduction operations and its success is directly linked to its proper implementation at all levels of the organizational system. This then means that the strategic system is similar to the strategic management.

Having defined the strategic management and linked it to the strategic system, as well as the importance of understanding the strategic system for a full success of the managerial act, the question remains as to how exactly strategic management works. The answer to this question is a paradox in the meaning that is as simple, as it is complex. It is complex in the meaning that it is present at all levels and considers multifaceted features; it is simple as its objective is clear. To better understand, take the case of an organization looking to increase its revenues. The managerial team develops and implements a wide variety to strategic approaches in achieving this desiderate. They for instance approach the matter through the lens of organizational expenditure and conclude that the costs must be cut. In following this course of action, they could decide to downsize part of their staff members, switch to more cost-effective suppliers or reduce the training programs to the employees. Costs will as such be reduced, increasing the organizational profits.