Strategic Human Resource Management

Role and Importance of Strategic Management

Strategic management is to do with two things namely deciding the strategies to be taken and implementing them using the company resources so that successful survival, fruitful expansion and enchanting growth is ensured. Strategic management is a process, directed by top management, to determine the fundamental aim or goals of the organisation, and ensure a range of decisions which will allow for the achievement of those aims or goals in the long-term, whilst providing for adoptive responses in the short-term.

Importance of Strategic Management

(1) Better and Effective Control of Uncertainty – Though it is almost impossible to do away with the odds created by uncertainties of future, it is strategic management can reduce the severities of uncertainties through strategic forecasting and planning future course. What holds for the firm can be better known by strategic forecasting and planning of future by gearing the organisation to face boldly the odds of future which is certainly uncertain. It is strategic management, and hence, the strategic manager can make the things happen in his way. Strategic planning calls for strategic organisation, that provides for better direction and control. Risks of business are reduced by proper shaping of future for the firm where innovative approaches used to use the resources in requisite time period.

(2) Lending Clarity in Objectives and Direction – By very definition, strategic management process is hinged on organisational objectives and the direction all resources and action in attaining these objectives. Many firms fail to define with utmost clarity the objectives. The stated objectives may lack clarity in definition and precision. When the objectives are not clear, it is futile to accept direction and achievement of results. Instead of saying to “good return on capital or sales”, say or state the “the company’s profits after tax will be 25 percent and shall grow at the rate of 10 percent every year”. This makes the difference.

The clearly stated goals the manpower the achievers will get clear direction to use physical and human resources to achieve the same. The total task of achievement is properly divided into departmental responsibilities and who is who and what for he is responsible ? and to what extent ? It goes without saying that the people in the organisation who know perfectly what is expected of them will certain perform much better than those who are ignorant or confused as to what is expected of them.

(3) Enhancing the Organisational Effectiveness – Organisational effectiveness is something whereby the organisation is geared to use its resources to attain the goals stated. In other words, the term “effectiveness” stands for productive use or prudent use in terms of time, quality and cost. As strategic management is most particular about statement of objectives and the way in which they are to be used to produce the best-result. That is, organisation effectiveness is felt when the resources at the disposal of the firm are made to produce the very best result.

(4) Keeping the Organisational Personnel Satisfied – In all those organisations where the strategic management becomes the way of life, the people in organisation are made to contribute much more that they can. Strategically managed firm is one where every person knows clearly as to what his role-in converting the resources into products and services. Systematising the decisions in organisation each know as to what is his contribution in the total firm level achievements.

It is the individuals who make the organisation. That is, contribution of each individual at individual level means aggregate contribution of all towards the attainment of organisational goals. It is micro-level thinking and acting in the back drop of strategic management that reflects in macro-level performance. Strategic management is clear as to who will make what decisions ? What is his responsibility ? What are his authorities or powers that extended to perform his duty is an easy and cosy manner. The people in the organisation are satisfied and motivated as they know who is who ? and what is what ? and his powers and responsibilities. The greatest capital of the rich organisation is satisfied people who are accountable for achievement.

(5) Bolstering the Financial Results – The fundamental appeal of any managerial approach is the expectation of profit maximisation. This is more true in case of strategic management system, that changes very face and pace of both formulation and implementation of plans. In fact the studies, conducted by experts in advanced nations of the West and North and developing countries of the East and South, clearly demonstrated that the firms which are wedded strategic management have given better financial results in terms of para-meters as sales, sales price, earnings per share, assets and earnings growth. On the other hand, the firms which non-formal planners fared much lower than the formal strategic planners.

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