The major contribution of performance management is its focus on achieving results - making use of the best tools to success and useful products and services for customers inside and outside the organization. In other words, performance management is not just being busy, but it is of how much of the work is effective in achieving the goals of the organization. Today, organizations have goals, plans and resource management. In order to achieve specific goals of an organization, it is essential that they need to have strategic management.
Recently, organizations have been faced with challenges like never before and those organizations which utilize strategic management practices are generally more effective than those who do not. Further, this increasing competition from businesses across the world has meant that all businesses must be much more careful about the choice of strategies to remain competitive. Therefore, small and large organizations put more focus on effectiveness to put systems and processes in the right way to the right things to achieve the predetermined results. This is the only way to claim that the organization and its various parts are really performing (McNamara n.pag, 1997).
In simple terms strategic management is the process of specifying an organization's aims and objectives, developing policies and plans to achieve it, and allocating resources so as to implement the plans. Strategic management is the highest level of managerial activity, which is generally performed by the top leaders of an organization. It provides an overall direction to the whole organization, leading them all to achieve a set goal/s. An organization's strategy must be best suited for its resources, circumstances, and to achieve its objectives. The process involves matching the company's strategic advantages to the business environment the organization faces. Training each and every individual to perform the individual targets is also am important step in this process. In general the goal of corporate strategy is to put the organization into a position to carry out its mission effectively and efficiently. Hence a good corporate strategy should combine an organization's goals, policies, and action into a complete package of success (Wikipedia n.pag, 2007).
In general a corporate strategy can be described as an organizations sense of purpose - a guiding purpose or policy, or it can also be a focused mission statement, or even a philosophy, for the achievement of an objective. It is the mapping out of future directions that need to be adopted using the resources possessed. The study of corporate strategy is a relatively recent phenomenon. Edith Penrose (1959) was one of the pioneers in academics to argue that what happened inside the firm was just as important as the marketplace outside the firm. Till then the main focus of economics had been upon the marketplace outside the firm, with a detailed consideration of market demand and supply issues. Penrose argued that the growth of the firm was related to its use of resources, its past history and its evolution over time; previous history was a key influence on future development. The US strategist Alfred Chandler (1962) also published a substantial study regarding the growth of the firm. He argued, in support of Penrose, that the development of an organization over time is an essential element in understanding strategy.