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The Effect of Strategic Management on
Organizations Performance
ABSTRACT
The topic of this project is “the effect
of strategic management on organization’s performance”, with a particular reference
to Krisoral Group of company’s Ltd Onitsha.
The problem of this study is that most business organizations fail not
because they lack good employees but because their management lack adequate
strategy. How organizations can
successfully adapt to their environment to ensure growth, survival,
profitability and continual existence is the concern of this project. The objectives being to bring to focus the
necessity for effective and efficient management strategy in organizations such
as:
1. The
extent to which the organizations involve in strategic management.
2. Why
strategic management fails in some organizations.
3. The
relationship between strategic management and secondary data collected. Whereas the secondary data were collected
from text books, journals, Internets
Data analysis involved sampling out a
particular number from the population of study in order to make
generalization. The work went as far as
testing the hypothesis formulated in chapter one f this project. It was found out that clear understanding of
a company’s business objectives to a large extent determines the rate of
managerial efficiency. Proper monitoring
and control of company’s strategy is very essential in organization’s
efficiency. Flexibility of strategy is
necessary for organization to stand the test of time. In conclusion, strategic management is a
means towards attaining success in business endeavours. Therefore, strategic management is inevitable
for organization to stand and continue in existence.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND INFORMATION
Business today operates in a highly
competitive, fast paced, globally connected environment where change is a
constant. This environment presents
challenges to any leadership team attempting to lead and manage successful and
sustainable business in the global area. Strategizing ahead becomes of paramount importance to the leaders of
organizations. Spot and strategic
management is therefore critical as the strategies implemented will help lead
organizations to assume their best position in the global market. Nowadays,
demands on corporate strategists are increasingly heavy, as strategic
implementation is becoming more complex in the real world. Therefore, there is a need to develop a
conceptual model to integrate and make the theory of strategic implementation
easier to understand and apply. An organized enterprise does not exist in a
vacuum, but is dependent on its external environment.
The enterprises therefore receive
inputs, transforms them into processed outputs and delivers them to the
environment are composed of
1. Customers
(both distributors and users)
2. Suppliers
of materials, Labour, Capital equipment and work space
3. Competitors
for both the markets and resources and
4. Regulatory
groups including governmental agencies, unions, and inter firm association
General environment includes economic
policies, Technical system and demography
Managers have no control on these forces
but rather respond to their changes.
Their ability to respond to these external variables and internal forces
are the major trust of this study.
(Akpala 1990, P.12) Poor management of
any organization will likely bring about poor undesired performance
necessitated by inappropriate organization structure which is the pivot or
building block for management. Without a
known framework, management of organization cannot be effective and
efficient. It is within this framework
that organization management process thrives effectively. According to Akpala, management as the
process of combing and utilizing or of allocating an organization’s input (i.e.
men is human resource, material and money) by planning, organizing, directing
and controlling for the purpose of producing outputs (goods and services)
desired by customers to achieve organizational objectives or goals. The ability of any organization to achieve
its aims and objectives within specified limits is known as managerial
efficiency. How well an organization
uses its available resources to achieve desired goals is a source of concern
for managers in this era of scarcity of resource.
Human resource management, one of the
key factors to improve business performance can be regarded as a general
approach to the strategic management of intentions of organization on the
future direction it wants to take. It is
concerned with long-term people issues and macro-concerns about structure,
quality, culture values, commitment and matching resource to future need.
Since early 1990s, there has been
evidence being generated on the impact of people’s management practices on
business performance. It is useful for
all organizations and inherent framework which reflect the business
strategy. They can ensure that various
aspect of people management are mutually reinforcing in developing to achieve
business success. (Akpala 1990, P. 12) Poor management of any organization will
of no doubt bring about undesired performance necessitated by which the pivot
or building block for management. Without a known framework, management of an organization
cannot be effective and efficient. It is
within this framework that organization management process thrives effectively.
According to Akpala, management as the
process of combining and utilizing or of allocating an organizations inputs
(men, material and money) by planning, directing and controlling for the
purpose of producing outputs (goods and services) desired by customer to
achieve organizational objectives. The
ability to any organization to achieve its aims and objective is known as
managerial efficiency. How well an organisation
uses its available resources to achieve desired goals is a source of concern
for managers especially in this area of scarcity of resources. So, in strategic management appropriate
organizational structure which will match the environment and productive
activities of an organisation is chosen.
Sometimes, when an organisation is
implementing the strategies it has formulated, the environment can change
further thereby indicating that there should be further strategic planning
analysis of these new events which the organisation did not anticipate before
they occurred during the strategic implementation process. These new issues are called real-time
response management (Ansoff, 1984). When
implementing strategies formulated to respond to changes in the environment,
two major problems are faced by the general management which are
1. Behavioural
resistance to change and
2. Systematic
resistance to change.
Strategic management is a component of
business policy. The major objective of
the various strategic management analyses is to help an organisation to
formulate effective business policies which can lead to the attainment of
organization objectives.
Krisoal Group of Companies was chosen as
the case study to highlight some areas of study. The effect of strategic
management on the performance of the organisation. Krisoral Group of Companies
Ltd was established by one man in 1996 as Eastern Distilleries Ltd., and
located at Niger Bridge Industrial Layout Onitsha. The company started with few employees
producing schnapps and wine in a small scale.
The company grew gradually, expanded and diversified into other
things. Because of the expansion and diversification,
the location became so overcrowded that they have to pack into their new
location at Atani Road Harbour Industrial Layout Onitsha, structures erected by
the organization. The mission of the organization
is to establish viable productive and service oriented enterprises with
absolute commitment to quality, and the vision being to pragmatically evolve
human endeavors to touch life and project them as the best in their chosen
field. For these reasons, the company
changed its name to Krisoral Group Companies, comprising of Eastern
distilleries, krisoral Agro Allied Ind. Strategic
management is necessitated by the fact that company’s operation is determined
to a large extent by the external variables in the environment which the
company is a sub-unit. The company’s
ability to achieve managerial efficiency is dependent on its ability to
forecast and respond to the external environment and to adopt the best alternative
course of action that will improve its performance to remain in business as a
corporate body. The level of competence
a company has been able to achieve is the domain of this research.
1.2 STATEMENT OF THE PROBLEM
Business continuity is a task that must
be pursued. Therefore, the future
occurrences are problems that every manager must take seriously as a first
class management task. Nobody can say
for certain what the future will be like but and can make good forecast. Irrespective of one’s careful plans and
strategies, there are still abundant unforeseeable occurrences one cannot
predict or determine. Every organization devotes time to map out where the
company is going how to get greater height and what it will be doing in order
to adapt and survive in this hard economic crunch and competitive market. Most
organizations have been observed to be declining from their objectives only to
engage in attractive and multiple but unattainable activities; they then lose
their sense of purpose and direction. They are more often than not prepared for
this environmental dynamics of change.
Such organizations that cannot adapt with the dynamics of change in
their environment die off prematurely while those that are able to streamline
and fine tune their strategy continue to strive from strength to greater
heights. Any organization that fails to strategies
and adapt to change covertly has planned to fail overtly. Most business concerns fail not because they
lack good employees, but because their management lack adequate strategy. The
problem is then on how organizations can successfully adapted to them environment
to ensure survival, growth, profitability and continued existence.
The Effect of Strategic Management on Organizations Performance
NB: The Complete Masters Project Topics in Business Administration Thesis is well written and ready to use.
