Failing to follow certain guidelines in conducting strategic management can foster criticisms of the process and create problems for the organization. Issues such as as "Is strategic management in our firm a people process or a a paper process?' should he addressed.
An important guideline for effective strategic management is open-mindedness. A willingness and eagerness to consider new information, new viewpoints, new ideas, and new possibilities is essential; all organizational members must be share a spirit of inquiry and learning. Strategists such as chief executive officers, presidents, owners of small businesses,and heads of government agencies must commit themselves to listen to and understand managers' satisfaction. In addition, managers and employees throughout the firm should be able to describe the strategists' positions to the satisfaction of the strategists. This degree of discipline will promote understanding and learning.
No organization has unlimited resources. No firm can take on an unlimited amount of debt of issue an unlimited amount of stock to raise capital. Therefore, no organization can pursue all the the strategies that potentially could benefit the firm. Strategies decision thus always have to be made to eliminate some courses of action and to allocate organizational resources among others. Most organizations can afford to pursue only a few corporate level strategies at any given time. It is critical mistake for managers to pursue too many strategies at the same time, thereby spreading the firms resources so thin that all strategies are jeopardized.
Strategic decisions require trade-off such as long range versus short range considerations or maximizing profits versus increasing shareholders' wealth. There are ethics issues too. Strategy trade-offs require subjective judgments and preferences. In many cases, a lack of objectivity in formulating strategy results in a loss of competitive posture and profitability. Most organizations today recognize that strategic management concepts and techniques can enhance the effectiveness of decisions.Subjective factors such as attitudes toward risk, concern for social organizations need to be objective as possible in considering qualitative factors.
Jolito Ortizo Padilla on his book Strategic Management - Proper Perspectives-2nd Edition summarizes the important guidelines for the strategic planning to be effective;
- It should be people process more than a paper process.
- It should be a learning process for all managers and employees.
- It should be words supported by numbers rather than number supported by words.
- It should be simple and non routine.
- It should vary assignments, team memberships, meeting formats, and even the planning calendar.
- It should challenge the assumptions underlying the currently corporate strategy.
- It should welcome bad news.
- It should welcome open-mindedness and a spirit of inquiry and learning.
- It should not be a bureaucratic mechanism.
- It should not become ritualistic, stilted, or orchestrated.
- It should not be too formal, predictable , or rigid.
- It should not contain jargon or arcane planning language.
- It should not be formal system for control.
- It should not disregard qualitative information.
- It should be controlled by "technicians".
- Do not pursue too many strategy at once.
- Continually strengthen the "good ethics is good business" policy.
Strategic management must not become a self perpetuating bureaucratic mechanism. Rather, it must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues. Strategic management must not become ritualistic, stilted , orchestrated , of too formal, predictable, and rigid. Words supported by numbers, rather than numbers supported by words , should represent the medium for explaining strategic issues and organizational responses. A key role of strategists is to facilitate continuous organizational learning and change.