Strategic Management, Essay Example

Introduction

That information technology is the critical element of present day strategic management no one can deny. With the rapid advancement of IT, more and more firms and organizations adopt IT as an effective tool of managing their strategic resources and balancing them with the sophisticated organizational needs. However, nowhere else is the role of IT as critical as in businesses which actually manage, produce, and distribute these technological benefits. In their article, WSJ Staff discuss the letter of Microsoft CEO Steve Ballmer to customers about the new role of technology spending and the need for adapting technology needs.

In his letter to customers, Microsoft CEO provides a detailed discussion of what, in his view, is “the new normal” – the term coined to distinguish the new economic reality from that before the latest financial crisis. Ballmer believes that the mere term “the new normal” indicates that “after years of economic expansion fueled by unrealistic rates of consumption and unsustainable levels of private debt, the global economy has reset at a lower baseline level of activity. Today, people borrow less, save more, and spend with much greater caution” (WSJ Staff). However, the problem is not in that the world economy has undergone a profound shift, but in how businesses should adapt their strategic needs to the new economic conditions and visions. Ballmer is confident that to make businesses efficient in the new economy, it is essential that firms and organizations build their strategies on technology and use technology to improve cost savings, to raise performance, to improve productivity, and to speed innovation (WSJ Staff). At the same time, cost saving, in Ballmer’s view, can hardly be a long-term winning strategy for businesses. Rather, delivering value to customers and increasing productivity are the two major source of long-term competitive advantage in any industry. With this information at hand, and for the purposes of building a sustainable strategic vision, organizations can (a) improve their data security; (b) deploy the new generation of business solutions which turn IT into a strategic business asset; and (c) use technologies to help employees build a new marketing insight and meet unfulfilled customer needs (WSJ Staff).

The relation of this article to strategic management is obvious. Strategic management usually encompasses a wide array of management visions and techniques, and taking into account that strategic management implies the need for managing strategic resources in a way that links businesses to the new economic order and helps them expand their market niche. It appears that with the growing sophistication of technological needs and with the rapid technological advancement, strategic management is no longer limited to strategy formulation and its implementation but requires developing and using the new strategic principles of knowledge management and building a new technological mindset. As such, strategic management is no longer possible without technology. As Ballmer shows, technology has already turned into the source of sustained competitive advantage and becomes even more critical in conditions of the current economic crisis. Unfortunately, in its current state, strategic management tends to disregard the role of technology in building the new business and corporate image among consumers, but managers must realize the unlimited potential of technology in driving cost saving and speeding innovation as the major prerequisite of continuous business success.

Conclusion

That technology is the critical element of any business performance is difficult to deny, but not all businesses do realize the value and strategic potential of technologies in management. For Steve Ballmer, technology stands out as the major source of sustained competitive advantage and innovation. Given the current economic difficulties and the need for businesses to balance their sophisticated needs with limited resources, technology can readily contribute to the effectiveness of strategic management and create a new vision of successful business performance in the long run.

Works Cited

WSJ Staff. “Microsoft CEO on the New Normal.” 2009. The Wall Street Journal. 03 October 2009. http://blogs.wsj.com/digits/2009/09/29/microsoft-ceo-on-the-new-normal/