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Strategic management and its role in public sector Management is an integral part of the modern society's activity. It is connected to all fields of activity and that is why it is necessary to know as much as possible about its laws and specificity. In my paper I am going to discuss the basics of strategic management and its role in the public sector. Speaking about strategic management, it is necessary to specify some initial conceptual representations about management and management as a whole. The model of strategic management is offered as one of conceptual bases in the system of management consisting of two subsystems: strategic and operative, (fig. 1). Strategic management should give the answers to the following three key questions: 1.
What are purposes of our organization? 2. What is the existing and future structure of our business? 3. That should we do to provide the achievement of our goals? The bases of strategic management are: 1. analysis of organizations external environment; 2. internal diagnostics (an estimation of the strong and weak sides of the organizations; 3.
definition of mission and the purposes of the organization; 4. development, estimation and choice of alternative strategy on concrete subsystems of the organization; 5. development and the developed definition of corporate strategy as a program of concrete actions; 6. strategy realization; 7.
estimation of results and feedback Fig. 1. Strategic management model. The general direction of management development is submitted on fig. 3. And the basic characteristics of each stage of evolution: "Management by instructions", "Management by objectives " and " Management by Learning " are shown in separate figures 4, 5, 6. Special value of the factor of training for modern management, its connection with phenomenon of business leadership and, finally, Management by Learning as a key competitive advantage and strategic factor of business success all of these is submitted on the Fig. 7 On the Fig. 8 there is a general model of the organization. The given system of the organization as the original strategic pyramid is very simplified.
At the same time it is very successfully shows the system and integrate unity of strategic and tactic aspects of management. Fig 3. The general direction of management development Fig. 4. Managing by instructions (MBI).
Internal Environment: Stable Product: Simple, standardized; Market: Mass Mutual relations with the consumer Everything produced is sold Work character: monotonous, simple Theory: . Smith, Ph. Tailor, . Weber Power: Centralized Structure: Hierarchy Symbol: Pyramid Attitude towards future: "I am controlling the future" The future is sufficiently definite and allows the extrapolation of the past Strategic Planning Conception Methods of quality provision: War accepting Effective type of behavior: Man-function Effective type of manager: Authoritarian technocratic boss Corporative culture: Normative manipulating, low adaptive Terminology: "This is under my control", "I manage that issue", "The situation is under control" Base method of power realization: The direct instruction, supported by order Fig. 5. Management by Objectives (MBO). Internal Environment: changing Product: Relatively difficult, standardized Market: Mass segmented Mutual relations with the consumer Developed feedbacks Work character: Complicated, not creative Theory: R.
Akoff, P. Drake, G. Odiorne, . Raya Power: Decentralized Structure: Not univariate hierarchy Symbol: Matrix Attitude towards future: The future is basically controlled Strategic Management Conception: 1 st phase of development Methods of quality provision: War accepting in combination with the manipulating approach Effective type of behavior: Man-manipulator Effective type of manager: A leader capable to see the future way and form it in a form of the concrete and clear objects. Corporative culture: Normatively-procedure, adaptive Terminology: "Lets discuss it together", "I suggest we should look at the situation once again. " Base method of power realization: Procedure or / and mechanism, supported by order Fig. 6.
Management by Learning (MBL). Internal Environment: Dynamic Product: Complicated, made "for the concrete client" Market: Fast filing niches inside of segments Mutual relations with the consumer Partnership Work character: Complicated, creative Theory: P. Drake, . Pitters, .
Arguers, P. Senge Power: Distributed Structure: Hierarchy, project-oriented Symbol: Net, leaning organization Attitude towards future: The future in uncertain in principle, and the source of development is based on this Strategic Management Conception: 2 st phase of development Methods of quality provision: Technology, based on the including of the personal into the changing of the methods of functioning Effective type of behavior: Man-partner Effective type of manager: Trainer, taking care of the achievements of his team or / and colleagues. Corporative culture: High adaptive, partnership, playing, constructive Terminology: Strategic vision, system approach, sources of uncertainty key competence, social and technical design, effective communicative capacities, creativity Base method of power realization: Procedure or / and partnership, supported in the agreement Fig. 7. System Learning management: utterances Fig. 8. Simplified organization model: (Strategic pyramid)...
Mission Goals Strategic conception What area would we like to work in? Strategies of key organizational subsystems How is the organization going to get a success? opportunities Dangerous Advantages weaknesses Competitor advantages keeping Competitive advantages creating New methods of management in the public sector are essential because government enters the new phase. Market dynamic have formed defiance's for public organizations, with the appearance of the global economy, progression in technology, extended public demands, and the requirement to offer more public services with smaller amount of resources. Also an extensive wish for better organizational examination has enlarged the anxiety for transformation, given more available joint information methods and discriminating media interest critical of government incapacities in service delivery. Reply mechanisms have came out within the private market to meet these changes but government organizations is very slow to react.
This is clear, given financial limitations and the practical process manifest to governments. However, a new method, which includes modern strategic management approaches, is essential for the public sector to attain better presentation and general service worth. As present public plan models have surely started to reveal a modify away from conventional thinking about executive design and public management, a methodical process for creating and sustaining better performance that reflects changes in the background is evidently absent. Support does exist to propose change is influencing the public sector, and this change is obvious in the transforming structures and progresses of many public organizations.
It is within this background that this case learning exists. The directive philosophy in any strategic management development, no matter in the public or in private sector, are about appreciating what changes are required, how to realize and run these changes, and how to produce a schedule for supporting betterments that lead to better presentation. The complexity in strategic management is the defiance of making a basis for victory in the future while meeting the changes. Speaking about the strategic management in the public sector, it is essential to explain the term benchmarking. Benchmarking makes out that no company is excellent at all. Therefore it is a continuing procedure implicating firms from any business and any state.
It is not a one-simple affair. There is no area for self-satisfaction... Benchmarking suggests that you should look for better way outs all the time. The motivation is, if you endlessly look for best performance in the best companies around the world, you should become an outstanding firm.
Any purpose and assignment of your company can be benchmarked, from manufacturing, to marketing, to buying, to information technology management, to customer service. Some specialists call benchmarking "best practices benchmarking" or "process benchmarking." This is to distinguish it from what they call "competitive benchmarking." All commercial organizations operate in the concrete market environment. For all organizations one overall objective is the reception of the profit. Achievement of the specified purpose in this or that measure is possible to one and impossible for others Ability of the organization to achieve the purposes in conditions of the market where other organizations operate with the similar purposes, is characterized by the concept "competitiveness" Five forces of a competition determine profitableness of business because they influence the prices and charges which firms may dictate. The strategic management is connected to the range of different terms: System of management is the main means of development and practical realization of the general program of the organization development and realization of its strategy. An ultimate goal of system of management is the performance of the companys mission.
Mission is the most overall aim of the organization as the competitive structure, submitted in the most general form and expressing a principal cause of organization existence. Strategy of corporation is a business concept of the organization on the given strategic prospect, submitted as the long-term program of concrete actions which are capable of realizing the given concept and to provide the organizations competitive advantages in achievement of the purposes. The important element of strategy of the organization is an answer to the question: "how to conduct competitive struggle? ." The key element of strategy is the target orientation in use of resources of the organization. Finally, corporate strategy of the given organization consists in knowledge and practically skills on creation and realization of the concrete advantages. Strategic management is a subsystem of organization management which carries out all the complex of concrete works on professional action under the strategic analysis, to development, realization and controlling strategy of the organization. Competitive advantage is those characteristics which create the certain superiority over its competitors for the organization making and realizing the given product.
These characteristics may be various and concern to the product (base service), and to the additional services accompanying base, i. e. to modes of production, selling, sales etc. , specific to the organization and its product. Such superiority is relative, i.
e. is defined by comparison with the competitor. Competitive advantage is divided into two basic kinds: lower costs and differentiation. Low costs reflect the ability of the organization to develop, let out and sell the comparable product with expenses lower than competitors. The differentiation is an ability to provide the buyer with unique and greater value as new quality of a product, special consumer properties or service. Any potentially effective strategy and the appropriate strategic management should pay sufficient attention to the both types of competitive advantage.
Real competitive advantage is reached due to the fact how the given organization in practice carries out separate kinds of the activity and all their set as a whole. SWOT analysis is a very important term in the marketing strategy. It is a plain structure for making strategic alternatives from a circumstances study. It is appropriate to either the community level or the one company level and is often met in marketing plans. SWOT (sometimes called TOWS) means Strengths, Weaknesses, Opportunities, and Threats. The SWOT structure was explained in 1960 's by Edmund P.
Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). Since it is focused on the problems that really have the most effect, the SWOT analysis is helpful when a very restricted amount of time is obtainable to analyze a multifaceted considered situation. The following illustration shows how a SWOT examination applies to a strategic situation analysis: Situation analysis Internal analysis External analysis Strengths Weaknesses Opportunities Treats SWOT Profile The internal and external situation analysis can make a huge quantity of data, much of which may not be extremely applicable. The SWOT analysis can be used as an explanatory filter to ease the data to a convenient amount of main problems.
The SWOT analysis categorizes the internal characteristics of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can be used as a base for creation a competitive benefits, and weaknesses may obstruct it. By accepting these four aspects of its situation, a firm can better influence its strengths, improve its weaknesses, take advantage of on opportunities, and prevent really destructive threats. Dynamically flexible, system and qualitatively adequate strategy of the organization, finally, is shown in high tactical efficiency of its business which is achieved at the most various changes of the organization external environments. Hence, in the given context all strategic management is managerial process by strategic changes. And efficiency of strategic management is an efficiency and special quality of the appropriate strategic transformations.
Bibliography 1. Camp, R. (1989) Benchmarking: The search for industry best practices that lead to superior performance American Society for Quality Control, Quality Press, Milwaukee, Wis. 1989. 2. Beating the competition: A practical guide to Benchmarking, Kaiser Associates, Vienna Virginia, 1988. 3. Leadership through Quality: Implementing competitive Benchmarking, Xerox Corporation, Stamford Conn, 1987. 4. Bring, Sandford.
The New Public Management is Here to Stay. Canadian Public Administration. Spring 95, vol. 38 no. 1, p. 112 - 21. 5. Cohen, Shawna & Cardinal, Nancy. Style and drinks turning Ontario's liquor stores into adult entertainment centers.
Marketing, Sept. 13 / 99. P. 30 - 1. 6. Change Management: An Inside Job. The Economist, July 15, 2000 7. Hartung, G. C.
Institutionalized Excellence: Not Just More Pop Government Jargon? Public Management, July 1996. 8. Israel, Charles. Privatization Dues and Dont's: What the LCBO Union Fears in the Monopoly Going Private. Toronto Life, June 1992
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Research essay sample on Strategic Management And Its Role In Public Sector