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Monthly Monograph
April-2003

Strategic administration in the small and medium company: a current necessity

Arise

Planing

Address

Necessity

Management Strategy arise

The administrators of success (efficient and effective) they have always concocted good strategies, but it is not but until recent times (1962) that the specialists of the administration recognized to the strategy like a key factor in the organizational success. This recognition delay owed herself mainly to the changes of the environment happened from the years 40 (Second World War).

Politics formulation(50)

When a small manager offers a class of goods or services to a reduced group of clients, the functional areas of the company can be planned, to be organized and to be coordinated in an informal way. But when the well or service modifies or it is substituted, or when the sale territories extend, the functional areas increase.
The activity of integrating the functions requires a structure of more formal procedures so that the company can coordinate the activities inside so much as among the basic functional areas. The arises this way "it Focuses of the formulation of political", based on the concept of installation of the daily orientation guides that they establish the delimitation as for what a functional area can or not to make.

Iinitial strategy focuses(1962-1975)
Chandler proposed that "strategy" it was defined as: "the determination of the objectives and long term plans, the actions to undertake and the assignment of the necessary resources to achieve this."
The focus of the initial strategy embraces four ideas keys that are:
1.Those "you work" to undertake to achieve the objectives, like in the objectives, same.
2. The "search" of ideas keys instead of the routine principle of implanting the politicians being based on a single idea that it could or not to need a consideration.
3.Interest in "how" the strategy is formulated, not only it was of her in what.
4. To abandon the conventional thing that the relationship between company and its environment was more or less stable and foregone. Chandler A. developed its ideas using the historical method, analyzing the growth and development of the company.
The definition of Chandler "strategy" it was refined by Andrews K., and Ansoff, and other who introduced the idea like a " process", instead of fixed indications (the politicians).

Soon they became evident two factors:
1. The "strategic planeación" it was adapted in the organizational world.
2. The administrator's paper when implanting the strategic planeación was not very clear.

Strategic administration focus(1974-1990)
Hofer Ch. and Schendel D., suggested a new focus: the "strategic administration", based on the principle that the general design of an organization can only be described if the achievement of those "objectives" it is added to those "political" and to the strategy like one of the key factors in the process of the strategic administration.
Hofer and Schendel are centered in four key aspects of the strategic administration that are:
1. The establishment of objectives
2. The activity of the formulation of the strategy
3. The installation of the strategy
4. The change in the analysis of the administration and the activity to achieve the predetermined objectives.
The key factors are the processes "political" and the internal individual reactions of the organization that can force the revision of the strategy. The final activity, the strategic control, provides the administrators of course a negative feedback that can, to affect a new process of strategic planeación.

PLANING REFLECTIONS

An organization is a complex entity that interac reacts in front of a turbulent external environment. When we refer to the analysis and design of the planeación system, it is essential to face this problem in a logical and systematic way, otherwise, the mind for the variety and the number of implied factors.

Project the future instead of suffering it
From remote times, the man has manifested concern in knowing in advance that that will face in the time to come. As this way it could avoid their destination in the case of bad omens; or, when it is good perspectives, to be tranquilized and to enjoy them in advance.
Unfortunately, the occupations of fortune-tellers and pitonisos have proven to be as fascinating as unhappy; in more than an occasion, the encounter with the reality has been translated in the disillusion of unfulfilled predictions.
We can say that the idea to drift responds to the humanity's logical restlessness to know the time; and the modern administrator to know the future, although with a more active focus that the simple wait of their occurrence. What is looked for with the planeación is not only the design of scenarios, but the way of to alter them and to take out them the biggest possible profit. It is, therefore, of carrying out the action of planning the future instead of suffering it.

Company Planning

The company planing appear first in North America at the end of the decade of the 50. Expanding this practice to other countries: Great Britain, France and Germany.
The planeación system in the companies, arose starting from four basic premises:
1. Before editing a plan that is projected to achieve an objective, it is necessary to decide "what it is what is wanted to achieve."
2. In times of quick changes it is necessary to foresee the future, as distant as it can, to advance these trasformaciones.
3. Instead of considering to a company like a quantity of departments, it should be considered it as an everything (that is to say, a system).
4. To give all their importance to the external environment to the company before elaborating any plan.
These premises really contain a kernel and when they meet in a concept a new and powerful method, the it appears "strategic administration."

Definition of strategic administration

Certo S. defines this way it: "It is the process that is continued to assure that an organization possesses organizational strategy and benefit of its use."
Stoner J. defines this way it: "Administration process that involves that the organization prepares strategic plans and, later, act according to them."
Just as it is used in the previous definitions, an appropriate strategy is that that suits better to the necessities of an organization in a certain moment.

Strategies and political

The "strategies" are general programs of action guided to the execution of general objectives. The main strategies of a company imply objectives: the commitment of those "resources" necessary for the achievement of this objectives and the main ones political that will be accepted when using those resources.
Those "political" they are guides that provide orientation in the administrative action and, mainly, in the taking of decisions, putting under an obligation to elaborate them inside certain limits. In general, the politicians don't require action some, since their intention is to serve from guide to the administrators in the commitments that they acquire when they make their decisions.
The essence of the politicians is the good trial. The strategies, on the other hand, refer to the destination that should be given to the resources (human, financial, etc.) so that they increase the probabilities that the fixed objectives are achieved.

Main types of strategies

In a company of commercial type as example, the main strategies that fix the general direction of their operations should correspond to the following areas:
Goods or new or modified services
Marketing
Growth
Finances
It structures organizational
Personal
Relate public.
To elaborate a strategy for any area, they should think about the appropriate questions. For example, in the area of goods or services, the questions key can be:
Which is our business?
Who are our clients?
What do our clients need?
What quantity can our clients buy and to what price?
Do we want to develop our own goods?
What advantages does it offer us to assist the necessities of the clients?
How should we respond to the current and future competition?
What utilities can we wait?
What does it form basic he/she will have our strategy?

PLANING AND STRATEGIC ADDRESS

Is one of the characteristic activities in the contemporary organizational means, the planeación becomes more necessary in the face of the growing interdependence and speed than it is observed in happening of the phenomena: economic, political, social and technological. In occasions this seems to decipher the enigma of the planeación, non point to know toward where we go, but rather to know "where we are". For it is it that the planeación techniques that formerly had a high quantitative component, today they spread to be centered in the analysis of qualitative elements.
The above-mentioned has made that so much the entities and public dependences, as well as private companies, dedicate good part of their efforts and resources to drift, that which has gone developing a methodology whose sophistication has grown parallelly. Nevertheless, the planeación continues being in essence an exercise of common sense, by means of which seeks to understand each other, in first term, the crucial aspects of a present reality, it stops later to project it, designing scenarios finally of which is looked for, to obtain the biggest profit. Of there the strategic character of the planeación: it only is not to foresee a road on which will traffic, but rather it is looked for to advance their direction and, if it is possible, to change it.
However, it would be erroneous to think that the whole advance has been established in the design of scenarios and that the strategic planeación is only limited to the new position of the prospective future. On the contrary, their reaches go much further on; the objective is not only to drift, but carrying out in systematic form a wide number of activities that, in turn, they imply the use of human resources and materials. For it is fundamental to have clarity of which it is the mission and the objectives that are pursued, so that the repetition of the cycle of the planeación brings near us gradually to the wanted purpose. This is the design and installation of a strategy.
A plan whose objectives are not translated in a specific and consistent strategy, represented by concrete actions, is not a formal plan, but an enunciated of intentions.
For each fixed objective they should be defined: the actions to carry out, to advance the problems to solve, to prioritize their solutions, to assign resources, to determine responsibilities, to design pursuit measures that only allow not to evaluate the advance, but, mainly, drift again.
To translate the strategic objectives in concrete actions that incorporate to the daily chore of the company, is to pass from the planeación to the strategic address; it is to grant him, in fact, a transcendent sense to the daily action of all their members who you/they will know that, to the margin of the routine tasks, it is necessary to develop other activities that have a more important, durable effect and, mainly, necessary to guarantee the future of the organization.
The knowledge of the mission, the objectives and the strategy of an organization on the part of all their members, it is a fundamental element to complete them. It also serves since as motivational element, when participating in their fixation, and later to reach them, he/she becomes a challenge to be integrated to the organization. The planeación and strategic address imply an effort participativo. This not only refers to the fixation of objectives, political and to the design of the strategy, but also to their execution and control. It means it that the strategic administration will fix reference marks inside which will be delegated the taking of decisions. Otherwise it would be contradictory that there is a wide participation in the action of drifting, but a centralization in the action of executing.
Next it is shown in the figure 1 an outline of the strategic administration.
Concluding, the strategic administration means to have conscience of the change and to understand the vital thing. Otherwise, the life of a company is reduced to its luck.

NECESSTY APPLY THE MANAGEMNET STRATEGY IN SMALL AND MEDIUM COMPANIES

The "strategic administration" is defined as the process that is continued to assure that an organization possesses an appropriate organizational strategy and benefit of its use.
Just as it is used in this definition, an appropriate strategy is that that suits better to the necessities of an organization in a certain moment.
It should occur bigger consideration to the necessity to apply the strategic administration in the small and medium company. In the practice, earlier or later, most of the companies (mainly in the small and medium) they lose energy, they reach a goal, they miss their road. At first sight dozens of reasons exist so that this happens: the well or service becomes antiquated, the company has grown with such a speed that the general manager or proprietor cannot make in front of the administrative problems, the person that began the company retires leaving a hole in the address, etc.. However, the previous and other more reasons so that a company doesn't work appropriately, they decrease to only three:
1. The company no longer has an objective clearing.
2. The proprietor doesn't know how to reach the general objective.
3. It is necessary a dynamic address.

Since the two reasons of these administration problems are those that the strategic administration is dedicated to solve, the small and medium companies, mainly in this position, they can adopt in a profitable way this practice, although it is better to prevent that to cure administrative problems, it is necessary to introduce the strategic administration "before" that a company begins to stagnate. Companies of all types (industrial, commercial, etc.) and sizes (small, medium and big) they can miss their road. The minimum thing that the strategic administration would reach for a company it would be to prevent the stagnation, and perhaps would surrender much more.
A strategic plan is as necessary and possible for a small or medium company as for a big one. Between the plan of a small one and that of a big one there are not nature differences, but of level, of volume and of complexity. In definitive, is it always to respond to the question to who to sell? This question takes harnessed other four: what?, where?, when?, how?
Also, to assure the development of the company, it is necessary to have it presents other aspects, as:

How did it reach their company the current situation?
Why does it produce those goods or services in short?
Why has it been located there?
Why does it only cover certain parts of the market?
Why has he/she been organized the company this specific way?
How is it that he/she has this group of managers in particular?

All these questions refer to different, but interrelated aspects of a company, and all those aspects unite and they influence in the effectiveness (I achieve of objectives). The decisions have more than enough goods or services, the location, the structure and the appointment of the managers are very important decisions. Invariably they have consequences in the results of the company. The way to make these fundamental decisions (or strategic) and the form of putting them into practice is what defines the process of the strategic administration.

M.A. Joaquín Rodríguez Valencia
Maestría en Administración. Catedrático por la Universidad Autónoma de Puebla y Universidad Madero. Presidente del Colegio de Administradores y de la Academia Regional de Investigación y Postgrado en Contaduría y Administración. Consultor y Capacitador externo en materia de Administración.

BIBLIOGRAPHY

Chandler A. Strategy and Structure.
Andrews K. y Ansoff I. Corporate Strategy, McGraw-Hill, N.Y., 1995.
Hofer Ch. y Schendel D. Strategy Formulation: Analytical Concepts, West Publishing, L.A. 1978.
Hermida J. y otros. Administración y Estrategia, Macchi, B.A., 1992.
Rodríguez Valencia J, Cómo aplicar la planeación estratégica en la pequeña y mediana empresa, Ecasa, México, 1997.

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