Previously we discussed the advantages of strategic management (can be viewed here).
The disadvantages of strategic management include the following factors:
It’s a complex and time-consuming process. The lengthy process involves continually checking many types of major critical components including short term and long term goals, business resources, and the organisational structure. It takes time to plan how the growth of the business may be affected and needs strong leadership and properly structured resources. This calls for proper practical planning. This is not possible by just one person but it is a team effort. The strategic management includes various types of continuous process which checks all type of major critical components. This includes the internal and external environments, long term and short term goals, strategic control of the company’s resources and last but not the least it also has to check the organisational structure. This is a lengthy process because a change in one component can affect all the factors.
Difficult to implement
Compared to other management techniques the process needs perfect communication between employer and employees. Active participation is needed with employees being held accountable for their work, and employers must constantly strive to make employees aware of the process and its benefits.
Needs proper planning
Proper practical planning needs to be implemented by the entire team in order to ensure that decision-making activities that would adversely affect the business in the long term are avoided. This calls for proper practical planning. This is not possible by just one person but it is a team effort. This calls for proper practical planning. This is not possible by just one person but it is a team effort.
Can be expensive
There may be funding agencies that can be approached to help with the financial costs to help develop strategies. These costs will need to be discussed prior to the implementation of any strategic management process.
It Inflicts Rigidity in the Organisation
Some claim or complain that strategic management brings in rigidity in the organisation through the strategic planning process. Under the umbrella of strategic management, the strategies are selected and implemented in a given set of environment-both external and internal. When these variables are taken into account, the organisations set different parameters for its functioning. Thus, organisational design may be changed, new rules and procedures are brought in, resource allocation pattern may change. So over or later, the employees are accustomed these changed para-meters. However, the changing strategies warranted by changed environment, bring in change is not easy. It is the internal inflexibilities encountered such as human and procedural, making strategic management in-effective and discouraging.
Its Inadequate Appreciation
The real problems crop up when the managers-now called strategic managers-not appreciating fully the implications and results of strategic management. The benefits of strategic management are not measurable by short term financial results. It is only long term assessment that mirrors the achievements of strategic management. This limitation can be overcome by proper implanting of concept of strategic management and its contributions in terms of both financial and non-financial terms. They are to be told the very ABC of strategic- management to be longer vision, horizon and future orientation rather than wasting their valuable time, treasure and talents on short-term achievements.
Ever Changing, Complex and Dynamic Environment
One of the major criticisms of strategic management is that it requires the organisation to anticipate the future environment in order to develop plans, and as we all know, predicting the future is not an easy undertaking.
Long Term Benefit vs. Immediate Results
Strategic management processes are designed to provide an organisation with long-term benefits. If you are looking at the strategic management process to address an immediate crisis within your organisation, it won’t. It always makes sense to address the immediate crises prior to allocating resources (time, money, people, opportunity, cost) to the strategic management process.
Impedes Flexibility
When you undertake a strategic management process, it will result in the organisation saying “no” to some of the opportunities that may be available. This inability to choose all of the opportunities presented to an organisation is sometimes frustrating. In addition, some organisations develop a strategic management process that become excessively formal.