Evolution of Strategic management:
In the previous days, talking about the 1920’s till 1930’s, the managers used to work outthe day-to-day planning method. Till this time they do not concentrate about the futurework. However after this period, managers have tried to anticipate and predict about thefuture happenings. They started using tools like preparation of Budgets and controlsystem like capital budgeting. However these techniques and tools also failed toemphasize the role of future adequately.Then long-range planning came into picture, giving the idea of planning for the long-termfuture. But it was soon replaced by Strategic planning and later by Strategic management-a term that is currently being used to describe the process of Strategic decision-making.The first phase of the planning can be tracked in the mid of 1930’s. The planning at that period was done on the premises of Ad Hoc policy making. The reason why the need for planning arose at that period was that, many businesses had just about started operationsand were mostly in a single product line and the ranges of operation were in a limitedarea. As these companies grew they expanded their products and also increased their geographical coverage. The method of using informal control and coordination was notenough and became irrelevant as these companies expanded. Thus arose a need tointegrate functional areas. Framing policies to guide managerial actions covered this task of integration. Policies helped to have predefined set of actions, which helped themanager to make decisions. Policy-making became the way owners managed their business and it was considered their prime responsibility.Thus, the increasing environment changes in the 1930’s and 1940’s planned policyformation replaced Ad Hoc policy making, which led to the shifting of emphasis to theintegration of the functional areas in a policy changing environment, showing anindication of the evolution of Strategic management.The Importance of Strategic management:
Strategic management is a wide concept and encompasses all functions and thus itseeks to integrate the knowledge and experience gained in various functional areas of management.
It enables one to understand and make sense of the complex interaction that takes place between different functional areas.
There are many constraints and complexities, which the Strategic management dealswith. In order to develop a theoretical structure of its own, Strategic management cutsacross the narrow functional boundaries. This in turn helps to create an understandingof how policies are formulated and also creating a solution of the complexities of theenvironment that the senior management faces in policy formulation.Role of the Managers