Strategic Management

Strategic management is an externally oriented philosophy of managing an organization that links strategic thinking and analysis to organizational action. As a continuous, explicit philosophy of managing an organization, strategic management

• Provides a framework for thinking about the “business”
• Creates a fit between the organization and its external environment
• Provides a process of coping with change and organizational renewal
• Fosters anticipation, innovation, and excellence
• Facilitates consistent decision making
• Creates organizational focus
• Represents the process of organizational leadership

Strategic management provides an ongoing philosophy for developing and managing the plans and actions of the organization. It seeks to orchestrate a fit between the organization's external environment (political, regulatory, economic, technological, social, and competitive forces) and its internal situation (culture, organization structure, resources, products and services, and so on). In some cases orchestrating the fit may mean responding to external forces, whereas in other cases the organization may attempt to actually shape its environment (change the rules for success). Change in health care has been quite dramatic and often disruptive. When change occurs, new opportunities and threats emerge. Strategic management is an organization's mechanism for understanding and constructively managing change. It is the leadership process for reinventing or renewing the organization.

Strategic management focuses on anticipating external change, fostering innovation in the services and processes of the organization, and promoting excellence. At the same time, strategic management sets direction for the organization and—through a common understanding of the vision and broad goals—provides everyone in the organization a template for making consistent decisions. Such management defines where the organization is going and, sometimes more important, where it is not going. Strategic management creates organizational definition and focus.

Strategic management is no longer viewed as a separate discipline; rather, it has become integral in leading and managing organizations. Strategic managers constantly relate the organization to its external environment, not merely to ensure compatibility and survival, but also to understand or alter the environmental trends so as to “create the future.” Thus, strategic management represents an evolving process of analysis and evaluation to continuously monitor the environment and adapt the organization to create momentum. Strategic management is the process of organizational leadership.