Strategic management and operational management are management techniques used by the company to manage their company, while both strategic as well as operational management involve applying management techniques and principles to manage the organization efficiently and effectively but there are many differences between the two. Let’s look at some of the differences between strategic management and operational management –
Strategic Management VS Operational Management
Meaning
Strategic management refers to that management that involves formulating and implementing major policies of the company after careful assessment of the company’s resources and ensuring that there is no lapse in implementation of company’s policies at any level of management while operational management refers to that management which involves managing the resources like men, machine and material at ground level so as to ensure that company produces high-quality goods or services at cheapest possible rate thus improving the profit margins of the company
Scope
Strategic management has wider scope in the sense that it is involved with the formulation of overall policies of the company and operational management is a part of strategic management while operational management is narrower in scope in the sense that it deals with only the operations part of the company and is a part of strategic management. In simple words just like in the case of payslip there are many components of salary in the same way in case of management strategic management is like payslip while operations management is one of the components of the salary.
Levels of Management
Strategic management is done by top-level management as it is more strategic in nature and that is the reason why people making a strategic decision requires extensive knowledge not only about the company but also about competitors, global markets, government regulations, local factors, and so on while operational management is done by middle level management and lower-level management as it is more routine in nature and one does not have to take into account so many variables as is the case with strategic management.
Frequency
In the case of strategic management, the policy and decisions are taken one or two times as policies and goals are set on a yearly basis, however, controlling and constant supervision is done in order to ensure that departments are on track for completing the tasks allocated to them while in case of operational management it is done daily because if the operational manager is not there in the plant for one day than the whole plant will stop functioning resulting in a loss for the company. In simple words, strategic management is required at infrequent intervals while operations management is required continuously for the smooth functioning of the company.
Impact
In the case of strategic management, the impact of decisions taken during strategic management is felt by the whole company and such decisions are often irreversible in the sense that the company cannot change its goals or policies midway once it has committed huge resources and capital on the basis of strategic management decisions. While the impact of operational management decisions is not felt on the whole company and that is the reason why errors from the operational management side can be more easily solved as opposed to errors from the strategic management side.
Area of Focus
In the case of strategic management, the area of focus is on the bigger picture that is the company’s profit position, its growth rate for the next few years, its market position as opposed to its competitors, and so on while in case of operational management the area of focus is on the operational side like improving employees productivity, logistics management, supply chain management, waste management and so on.
As one can see from the above that both strategic management and operational management are miles apart from each other and that is the reason why one cannot expect a strategic manager to be a good operational manager and vice versa which is the reason why the company will need different department and people to manage its strategic affairs and operations affairs effectively and efficiently.