PLANNING AND STRATEGIC MANAGEMENT

Chapter 4

 Planning and Strategic Management

An Overview of Planning Fundamentals

Planning is the conscious, systematic process a making decions about goals and activities that an individual, group, work unit, or organization will pursue in the future.

The Basic Planning Process

            The important steps followed during formal planning are similar to the basic decision.

Step 1 : Situational Analysis A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration.

Step 2 : Alternative Goals and Plans The planning process should generate alternative goals that may be pursued in the future and the alternative plan that may be used to achieve those goals. Goal are the target or end that management desires to reach. Plans are the actions or means managers intend organizational goals.

Step 3 : Goal and Plan Evaluation Next managers will evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan. They must prioritize those goals and even eliminate some of them.

Step 4 : Goal and Plan Selection Once managers have assessed the various goals and plans, they will select the one that is most appropriate and feasible. The evaluation process will identify the priorities and trade-off among the goals and plans.

Step 5 : Implementation Once managers have selected the goals and plans, they must implement the plans designed to achieve the goals. Even the best plans are useless if they are not implemented properly.

Step 6 : Monitor and Control The sixth step in the formal planning process-monitoring and controlling-is essential. You will never know whether your plan is succeeding. Managers must continually monitor the actual performance of their work units againts the units goals and plans, and also developed the control systems.

Strategic Planning

            Strategic planning involves making decisions about the organization’s long-term goals and strategic. Strategic plans have a strong external orientation and cover major portions of the organization. Senior executives are responsible for the development and execution of the strategic plan, althought they usually do not formulate or implement the entire plan personally.

Tactical and Operational Planning

Tactical planning is a set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portionof the organization, such as a functional area like marketing.

Operational palnning is the process of identifying the specific procedures and processes required at lower levels of the organization.

Strategic Management

Strategic management is a process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies. The strategic management process has six major components :

Step 1 : Establishment of Mission, Vision and Goals The mission is a clear and concise expression of the bassic purpose of the organization.  The strategic vision is the long-term direction and strategic intent of a company and it’s points to the future-it provides a perspective on where the organization is headed and what it can become.

Step 2 : Analysis of External Opportunities and Threats Successful strategic management depends on an accurate and thorough evaluation of the competitive environtment and macroenvirontment. Stakeholder are groups and individual who affect and affected by the achievement of the organization’s mission, goal, and strategies.

Step 3 : Analysis of Internal Strength and Weaknesses As managers conduct an external analysis, they will also assess the strengths and weaknesses of major functional areas inside their organization. This kind of internal analysis gives strategic decisions makers an inventory of the organization’s existing function, skills, and resources as well as its overall performance level.

Step 4 : SWOT Analysis and Strategy Formulation is a comparison strengths and weaknesses, opportunities, and threats that helps executives formulate strategy. SWOT analysis helps managers summarize the relevant, important facts from their external and internal analysis.

Step 5 : Strategy Implementation Strategic managers also must unsure that the new strategies are implemented effectively and efficiently. By paying closer attention to the processes by which strategies are implemented, executives, managers, and employees can make sure that strategic plans are actually carried out.

Step 6 : Strategic Control A system designed to support managers in evaluating the organization’s progress regarding its strategy and, when discrepancies exist, taking corrective action. The system must encourage efficient operations that are consistent with the plan while allowing flexibility to adapt to changing conditions.