Management effectiveness is a complex category. It reflects the characteristics of social, economic, organizational phenomena. Management effectiveness is tactical and strategic, potential and real.
Tactical means getting the result in the near future, and strategic - in the future.
Potential is a preliminary assessment, and a real one is an assessment based on practical results.
Efficiency in this case is the result of management activities, the rational use of available resources (material, labor, financial).
In the conditions of centralized management of the national economy, effective management was not included in the functions of enterprise management. All major decisions were made “upstairs” - in the offices of the State Planning Commission, various ministries, departments.
In modern conditions, a market economy does not allow a leader to be strategically irresponsible. He must independently make fundamental long-term decisions, while taking full responsibility for their consequences.
Strategic management represents a modern concept of enterprise management, an organization that provides the development and implementation of long-term programs. The effectiveness of the organization and enterprise directly depends on this. It is necessary to change the initial principle of activity planning , radically change the direction of movement, that is, move from the future to the present.
From the point of view of strategic management, an enterprise is an open economic system, and the prerequisites for the success of its activities are not inside, but outside it. In other words, the performance of an enterprise or organization will depend on how successful adaptation to environmental requirements is. These include consumer requests, competitors, regulatory acts, etc.
The effectiveness of strategic management compared to operational management consists in the fact that the first is a process of making and implementing strategic decisions, taking into account its own resource potential, with the capabilities and threats of the external environment in which it exists and carries out its activities.
Strategic management much more fully tells management what to pay close attention to at present in order to exist safely in the future.
Strategic management, in comparison with traditional management, proceeds from the fact that the external environment and conditions of the enterprise will constantly change in the future, it will not always be able to work better than in the past or present.
So, the effectiveness of strategic management lies in the fact that it operates, ensuring the implementation of the goals of the enterprise, organization in the process of dynamic and uncertain environmental changes. This allows you to optimally use the available potential and be susceptible to external requirements.
The potential of the enterprise is its ability to produce products, and in addition to internal variables, it includes management capabilities.
An enterprise strategy is a set of rules that allows you to make management decisions.
Structural and strategic management consists of five elements listed below:
- analysis of the environment in which the enterprise (organization) operates;
- strategy and its choice;
- implementation of the strategy;
- mission and goals;
- monitoring the implementation of the strategy.
The effectiveness of management depends on how strongly these elements are interconnected and whether they have stable feedback.