Discuss in Scholarly Detail the Benefits and Risks Associated with Strategic Management Essay

Strategic management allows organizations to be more proactive than reactive and to initiate and influence internal and external activities to gain control over its own destiny. It allows executives at all levels to participate in analyzing a firm’s current practices in order to formulate and implement shorter and longer term strategies for growth and development. Historically, this participative approach has produced better results. Another benefit of strategic management has been to formulate better strategies through the use of the more systematic and proven methodologies. Organizations of all sizes have recognized and realized the benefits of strategic management. While financial benefits include increased sales, profitability and productivity, non-Financial benefits include, better understanding of competitor’s strategies and reduced resistance to change across the organization. Strategic planning with risk awareness has always been difficult. According to Rick Funston & Bob Ruprecht (http://bpmmag.net), Success demands excellent risk management as a core competency. Risk intelligence enables an organization to respond to rapidly changing circumstances with greater agility and resilience. Risk handled well becomes a source of competitive advantage; handled poorly it can severely hamper a company’s prospects. The greater the risk, the less complacent organization can afford to be. More often executives who are responsible for strategic planning lack an integrated view of risk due to the unavailability of business intelligence when needed. Many organizations fail to consider a range of time horizons when incorporating risk considerations into the planning process resulting in uncertainty down the chain-of-command with each expanding time horizon. Unavailability of an integrated decision-support framework that links key performance metrics with business and risk intelligence multiplies the risks exponentially.