Limitations of Strategic Management

20/03/2020 0 By indiafreenotes

Strategic management is not without limitations. While strategic management has a number of benefits as pointed out above, it is also a fact that many firms fail despite adopting strategic management and many firms which do not have strategic management are successful. In short, strategic management by itself does not ensure unconditional success.

The important limitations of strategic management are the following:

  1. Strategic management is based on certain premises and if the premises do not hold valid, the strategy or plans based on them would not be realistic or effective. These points to the need for exercising due diligence in premising and to the importance of strategic control, particularly premise control.
  2. SWOT analysis has a very important role in strategic management. Obviously, if the SWOT analysis is not right, the strategy based on it may go awry. SWOT analysis is an exercise which requires lot of expertise and information. When these two are lacking, the utility of the SWOT analysis is questionable and it could even lead to formulation of wrong or ineffective strategies.
  3. Strategic management is a means to achieve the mission and objectives of the organization. Hence, any lack of realism or other limitation of the mission/objectives would naturally get reflected in the strategy.
  4. One of the criticisms against strategic management is that it sometimes makes the organization over-ambitious and the resultant failure to reach the goals cause frustration. Unrealistic strategies may land companies in severe problems.
  5. Another criticism advanced against strategic management is that it makes the future vision tunneled that several opportunities may be overlooked. Against this criticism, it may be argued that the strategy is formulated after scanning all the opportunities. Further, a good strategic management also envisages modification of the strategy when changes in the environment call for it.
  6. Yet another criticism which is very akin to the above is that it makes the whole approach very rigid. Against this, it may be pointed out that a good strategic management system provides for required flexibility and modifications. Strategic control and contingency planning impart the plans some amount of adaptability to the unforeseen developments.
  7. An important limitation of the strategic management is that if the implementation of the strategy is not effective, even an excellent strategy would not produce expected results. Effective implementation demands many things  resource allocation, leadership implementation, right structure, and effective evaluation and control. The reason for the failure of many strategies is the implementation failure.