Contribution of Management

Strategic management is an art and science from making, implementing, and evaluating strategic decisions between functions that enable an organization to achieve future goals. Strategic management, focuses on integrating / combining aspects of marketing, research and financial / accounting development and production / operations of a business. Because it integrates all business functions, strategic management is used as a name for the currency in business administration. Strategic management consists of three processes:

a) Making strategies, which include developing long-term mission and goals, identifying opportunities and threats from outside as well as company strengths and weaknesses, developing strategic alternatives and determining strategies that are suitable for adoption.

b) Implementation of strategies, including the determination of annual operational targets, company policies, motivating employees and allocating resources so that the established strategies can be implemented.

c) Evaluation / control of strategies, including efforts to monitor all results from the making and implementation of strategies including measuring the performance of individuals and companies and taking corrective steps if needed.

Strategic always "gives an advantage", so if the management process carried out by the company fails to create profits for the company / organization, the management process cannot be called strategic management.

Vision is a carefully formulated statement of intent that defines a goal or future condition that is specifically desired by a person or group. Vision is the starting point of tomorrow's reality. The right vision has a strong driving force.

The right vision has several basic criteria:

• Looking ahead is not just a projection of the status quo.

• Is a belief in the possibility of going to a better condition for the organization.

• Right and suitable for the organization, consistent with the history, culture and values ​​of the organization.

• Set standards of excellence and reflect high ideals.

• Clarify directions and goals.

• Stimulate inspiration, enthusiasm, and commitment.

• Reflecting uniqueness, prominent competencies, and what you want to fight for.

• Reflect on strong ambitions.

Strategic management system is the process of formulating and implementing strategies to realize the vision continuously in a structured manner. Strategy is a pattern of selected actions to achieve certain goals. At first, the strategic management system was characterized by:

• Rely on annual budgets

• Long-term and focused on financial performance.

The implementation of such a strategic management system in many private companies has failed. The reasons include:

• Only 25% of managers have incentives that are linked to the strategy

• 60% of companies do not link their budget to strategy

• 85% of executive teams spend less than an hour discussing strategies every month

• 5% of employees who understand the strategy.

But the strategic management system is still needed because the company is required to develop in a planned and measurable manner, so that it requires a travel map to face an uncertain future, requires strategic steps, and needs to direct HR capabilities and commitment to realize the company's goals.

Balanced scorecard is briefly a management system to manage strategy implementation, measure performance in its entirety, communicate vision, strategy and objectives to stakeholders. The balanced word in the balanced scorecard refers to the concept of balance between various perspectives, the length of time (short and long), the scope of attention (internal and external). The word scorecard refers to the organizational performance plan and its parts and their size quantitatively. The balanced scorecard benefits the organization in several ways:

• explain the organization's vision

• align the organization to achieve that vision

• integrating strategic planning and resource allocation

• improve management effectiveness by providing appropriate information to guide change

Balanced scorecard is a method developed by Kaplan and Norton to measure every activity carried out by a company in order to realize the goals of the company. The balanced scorecard was originally a separate activity related to targeting, but then integrated with a strategic management system. The balanced scorecard is even further developed as a means to communicate from various units within an organization. The balanced scorecard was also developed as a tool for organizations to focus on strategy.

The role of balanced scorecard in strategic management systems is:

a) Expand perspectives in each stage of the strategic management system

b) Make management focus balanced

c) Linking various targets coherently

d) Measuring performance quantitatively.

The use of balanced scorecard in the context of private companies is intended to:

a. Produce productive processes and cost effective

b. Produce multiple and long-term financial returns

c. Develop productive and committed human resources

d. Creating products and services that can produce the best value for customers / customers.

Balanced scorecard is believed to be able to change strategy into action, make strategy as the center of the organization, encourage better communication between employees and management, improve the quality of decision making and provide early warning information, and change work culture.

The potential to change work culture exists because balanced scorecards can make:

• The company is more transparent

• Information can be accessed easily

• Organizational learning is accelerated

• Feedback is objective, scheduled, and appropriate for organizations and individuals

• Establish an attitude of seeking consensus because of the initial differences in setting goals, the strategic steps taken, the size used, etc.

The advantages of a strategic management system based on balanced scorecard compared to other management concepts is that it shows outcome indicators and clear outputs, internal and external indicators, financial and non-financial indicators, and indicators of cause and effect.

Balanced scorecards are best arranged at certain times, for example when there is a merger or acquisition, when there is pressure from shareholders, when going to implement a large strategy and when the organization changes direction or will push the change process. The balanced scorecard is also applied in routine situations, including:

1. When preparing a budget allocation plan

2. Develop performance management

3. Conduct socialization of new policies

4. Get feedback

5. Increase staff capacity.

Balanced scorecard in Government

The government in the current era, both central, regional and local government is expected to be:

1. Accountable

2. Competitive

3. Friendly people

4. Focusing on performance.

Government organizations are also challenged to meet the expectations of various groups of stakeholders (ie service recipients, employees, lending / grant institutions, communities, and taxpayers). This demand requires government organizations to act professionally as is done by private organizations.

Government organizations must have a strategic management system. Because the external world is very unstable, the planning system must control the uncertainties encountered. Government organizations, thus, must focus on strategies. This strategy is more hypothetical, a dynamic process, and is the work of each staff. Government organizations must also feel, experiment, learn, and adapt to developments.

In order for government organizations to focus on the strategies that have been formulated, government organizations must also translate strategies into operational terminology, align organizations with strategies (and not vice versa), motivate staff so that strategy is everyone's work, drive change through executive leadership, and make a strategy as a continuous process.