Capital Ethiopia Newspaper

Strategic management issues of concern

What influence do business owners and managers have over the effectiveness of their operations, the motivation and work ethics of their workers, the competition, the economy, the environment, etc.? There are many issues to be concerned about as a business owner, some of which within and others outside their circle of influence. The business owner needs to make up his or her mind about the issues to be concerned about, decide whether or not something can be done about it and subsequently work on enhancing influence on the issue. If you come to the conclusion that an issue is not for you to have any influence over, it may be better to stop being concerned about it at all. Instead focus on what you can have a (growing) influence over. To get some more insight in the issues we want to address we classified the way in which business may be organised last week as follows:
1. Strategic management
2. Production management
3. Human resources management
4. Financial & administrative management
5. Marketing management
Now, using this classification as a point of departure, we can begin to identify issues of concern, that we can have a direct influence over and that thus require our attention.  Let us begin looking at strategic management.
Strategic management deals with the longer term plans of the company and decisions related to that, for example: Are you going to expand, develop other products, export your products and position the company more strategically? While we find ourselves very busy to manage our business on a daily basis, what often  seems to be lacking is a longer term perspective and we often do not find the time to think about developing a business strategy. What do we mean by a business strategy though? Strategy is about the ways and means of achieving the main objectives of your business, the process of moving it from where it is now to where it needs to be, for it to become more successful. Strategy is not concerned with the daily management but with the general direction, in which the business is going. Strategy is the key to business discipline. Developing a strategy involves questioning the fundamental premises upon which the business is built: its economics, its competitive advantage, its resources and how they are used, the flexibility of the company and the quality of the workers. Thinking strategically may eventually lead to a major shift in the emphasis of the business. In our present day, managers of all sizes of business should be encouraged to think strategically, if their business is to be successful. A strategy will provide the framework that allows for adaptation and innovation, responding to changes that take place in the market. Strategy serves thus as the basis for a business plan, which will help us make the right decisions. A business plan is not only a requirement when applying for a loan for instance; it provides a sense of direction for the business itself. So let us examine how we can begin thinking more long term and make a beginning with developing a strategic business plan. The process will look something like this:
1.    Establishing the current situation of the business: Where are we now?
2.    Establishing the direction and longer term objectives: Where do we want to be in a few years time?
3.    Looking at the different options to get there: How can the resources be used best to create or maintain an advantage over the competition?
4.    Putting the chosen strategy into action.
We may probably have some idea about what strategy to follow but we have difficulties making it explicit. It is important that we put our long term objectives down in writing, otherwise our business strategy will emerge ad hoc, as the result of a series of decisions at different times. And if decisions are made in the absence of a framework, the different activities of the business will be pulled into different directions, according to personal concerns and preferences. There will be no consistency in the decisions that we make. Some issues of concern that we may be better able to address by formalising a business strategy include but are not limited to:
1.    Uncertainty about how the business works and where it is going.
2.    Not having clear targets and thus not being able to monitor progress.
3.    The feeling always having to deal with a crisis.
4.    How the business will be able to offer better services to its customers.
5.    How to identify new customers and services.
6.    Having a basis to get financial and technical assistance.
7.    The quality of discussions about the business with our staff and workers.
8.    Uncertainty about the future of the business.
9.    Understanding better our own concerns and goals and ways to achieve them.
Remember that strategy is about means and ends, which will allow you to be more in control of your business, your resources and challenges facing your business. This requires concentrated effort but will pay its returns in the long term.