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Intellect Is Required to Understand the World Published: Sunday, February 18, 2007 By: Dr. Manuel Ángel Morales

Strategic management is the tasks of creating organizations that generate value in a turbulent world over an extended period of time.  This action is a profound process by which companies are transformed from one state to another, in response to a changing, turbulent, uncontrollable and global world.  Throughout this process organizations must be creating value in the present while investing in the change ventures to ensure continuing survival and value creation in the future.

The transition process of organizations, from one state to another, and its characteristics (vision, structure, technology, products, markets, and people) may occur through inaction in which case the companies are not likely to survive.  Or it can be managed, and this option is preferable.  Such change may be revolutionary or metamorphic, or it may be gradual and incremental.  Driving these processes of continuous reinvention is the task of strategic management.

Suffice to say, that this change process within organizations occurs in an unpredictable uncertain environment.  The external context is continually changing over time.  Some changes are due to actions of the organizations, others due to the actions of other organizations, and such actors as government and social groups.  For organizations, these events are both a threat and an opportunity. 

Strategic management is both about developing foresight and insight to work their way through the sometimes impenetrable fog created by change.  Since some changes will be unpredictable in scale and scope, the strategy of the company must be emergent and adaptable, as the world evolves in ways that were initially not well understood.  Flexibility and agility will be favored over rigidity and high structure.  The new conditions require quickness and high velocity on the part of all organizations.

The emphasis is on the need for organizations to continually be creating value, and if they don’t, they are unlikely to survive.  While this ongoing transition continues, there will be pressure from competitors, the end result of which may be to drive returns toward zero economic profit or below.  Innovation is essential to value creation, whether it be in technology, logistics, organization, business model, or some other aspect of the organizations.

Managing ongoing change is an extremely difficult process. This is an important intellectual, theoretical, conceptual task. (Without theory there is no new knowledge and without new knowledge real change is not possible).  Organizations are complex entities and they gather human intellectual capital within a context of relationships, friendships and processes. Intellect is certainly required to understand the world and the future of things to come.

But management requires quick, visible and dramatic actions.  This is about making decisions, getting change accepted and implemented.

Making decisions, monitoring and measuring results, and modifying them as required constitute the essence and flow of strategic management.  Again, this is also about correctly interpreting the environment, coming to terms with globalization, responding to competition, incorporating technology and innovation, managing contradictions, acknowledging changing boundaries and working with the dimensions of scale, efficiency and flexibility of organizations.


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