Strategic Management Plans

Strategic management is a managerial capacity and activity the objective of which is to set goals. Strategic management gives long-term direction to a firm or organization, and this is under the same umbrella as organizational studies.

There are two main approaches in strategic management--they are opposites but they do supplement each other in some ways:

• The Industrial Organizational Approach deals with subjects such as resource allocation, economies of scale, and competitive rivalry. This approach also deals with assumptions like rationality, self-discipline, behavior, and profit maximization.
• The Sociological Approach is concerned mainly with human interactions, and with the assumptions of bounded rationality, satisfying behavior, and profit sub-optimality.

Similarly, there are 5 types of strategies in strategic management to ensure the success of the strategy - depending on its purpose: 

• Strategy as plan. This means a direction, guide, and course of action. This is more concerned with the objective rather than actual practice.
• Strategy as ploy. Strategy is seen as a tactic intended to outwit competition.
• Strategy as pattern. This is a constant pattern of past behavior. The actions (behavior) are practiced and realized rather than just intended or thought of.
• Strategy as position. Locating brands, products, or companies within the framework of clients or other stakeholders. These are strategies that are completely dependent on outside factors, and not those specifically within the same firm.
• Strategy as perspective. A strategy designed mainly by a master strategist.

Strategic management plans and techniques can be seen as bottom-up or top-down, as long as there is collaboration involved. In a bottom-up approach, the staff presents proposals to their immediate superior who, in turn, identifies the best and most suitable ideas further on up the organization. Most of the time, this is accomplished by a budgeting process that is subject for approval. Proposals are evaluated using financial factors such as return on investment. It has been known that cost underestimation and benefit overestimation are the two major sources of the errors.

The top-down approach, on the other hand, is the most common approach employed by organizations. In it, the head or president of the firm simply gives the overall direction and long-term plans of the company. The different units of the organization carry out these plans. 

Functional strategies are normally composed of marketing strategies, legal strategies, new product development strategies, financial strategies, human resource strategies, supply-chain strategies, and information technology management strategies. Each department's primary focus is on the accomplishment of short and medium term plans. Each of them then tries to do its part in contributing to achieve the overall corporate objectives. They do this by aligning their departmental objectives with the objectives of the firm.

Finally, doing a SWOT analysis would determine the overall effectiveness and efficiency of the management plan. Regular or scheduled analysis can determine flaws in the plan, and the corresponding action plan should then be drafted to ensure that the total objective and goals of the organization are attained.