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"Research has revealed that organisations that engage in strategic management generally
out-perform those that do not"
The connotation of the ancient Greek word strategos", in its various grammatical forms,
implies meaning of skilful manoeuvouring leading to achieving a highly crucial position or
attaining a desired end. Commonly associated with the military operations, strategies aim
at methodical out-performance of adversaries. Analogically, application of deliberate
strategies in the business management context suggests combination of activities directed
at becoming superior to business opponents. Hence, it can be assumed that engaging in
these activities will produce better business results than not doing so.
This essay attempts to provide evidence to support the opening statement. It firstly reviews
the purpose of managerial activities from the historic perspective. It, then discusses the
impact of strategic management process components on organisational performance and
finally describes benefits of strategic thinking and strategic integration.
The analysis concentrates on matching the theoretical principles of strategic management
with the pragmatic business examples. For the purpose of this discussion, out-performance
has been defined as surviving on the existing or successful entering the new market.
Although definitions of management range from very simple statements, like the one of
Frederick Taylor "knowing exactly what you want people to do and then seeing that they
do it in the best and cheapest way" (Taylor, 1903, p. 21) to complex postulates listing
managerial activities and objectives (Davidson & Griffin, 2003, p. 5), their common
denominator points to a set of deliberate actions to achieve organisational efficiency "using
resources wisely" (Davidson & Griffin, 2003, p. 7) and effectiveness "making the right
decisions" (Davidson & Griffin, 2003, p. 7).
Accompanied by a large volume of the theoretical work, management practice, can
therefore be broadly described as a constant search for the optimal performance
methodologies. Thus, from the historical point of view, it can be proposed that strategic
management is a twentieth century form of the management discipline that emerged as a
result of the evolution process necessitated by the changes in the organisational internal
and external environment. The environmental changes of management have been
occurring throughout the history on social, economic and political arenas. Social forces,
represented by "norms and values that characterise the people in a culture" (Davidson &
Griffin, 2003, p. 35) influence demand of the management process stakeholders. Economic
factors encompassing systems of producing, distributing and consuming wealth" (Bartol,
Martin, Tein & Matthews, 1998, p. 92) impose economic ground rules on the management
activities. Political elements define legal boundaries in which the management process
