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THE IMPORTANCE OF STRATEGIC MANAGEMENT 1.In a short essay, explain why strategic management is important. AnswerOne of the most significant reasons that strategic management is important is that it can make a difference in how well an organization performs. The most basic questions about strategy look at why firms succeed or fail, and why, when faced with the same environmental conditions, their performance levels vary. Studies of the factors that contribute to organizational performance generally have shown a positive relationship between strategic planning and performance. In other words, it appears that organizations that use strategic management do have higher levels of performance. And that makes it pretty important for managers! Another reason strategic management is important has to do with the fact that organizations of all types and sizes face continually changing situations. These changes may be minor or significant, but it’s still change with which managers must cope. That’s where strategic management comes in. Using the strategic management process, managers examine relevant factors in deciding what actions to take, thus helping them better cope with uncertain environments. Strategic management is also important because of the nature of organizations. They’re composed of diverse divisions, departments, functions, and work activities—manufacturing, marketing, accounting, and so forth—that all need to be coordinated and focused on achieving the organization’s goals. Strategic management does this. Strategic management helps in coordinating and focusing employees by clarifying and pinpointing what’s important and by providing the reasons for why they’re doing what they’re doing. Finally, strategic management is important because it’s involved in many of the decisions that managers make.