Planning and Strategic Management Essay

Management Chapter 10 Planning and Strategic Management Planning Overview Importance of Goals: Goals provide a sense of direction Goals focus our efforts Goals guide our plans and decisions Goals help us evaluate our progress The importance of planning at organizations The Hierarchy of Organization Plans Strategic Plans – Plans designed to meet an organization’s board goals. Operational Plans – Plans that contain details for carrying out, or implementing, those strategic plans in day-to-day activities. How Strategic and Operational Plans Differ Strategic Plans Operational Plans Time Horizons Strategic plans tend to look ahead several years or even decades For Operational plans, a year is often the relevant time period Scope It affects a wide range of organizational activities It has a narrow and more limited scope Degree of Detail Strategic plans are stated in terms that look simplistic and generic Operational plans are stated in relatively finer detail The Evolution of the Concept of Strategy Strategy: The board program for defining and achieving an organization’s objectives; the organization’s response to its environment over time. Strategic Management: The management process that involves an organization’s engaging in strategic planning and then acting on those plans. for attaining objectives The process of seeking key ideas ( rather than routinely implementing existing policy); and How strategy is formulated, not Just what the strategy turns out to be The Strategic Management Approach Dan Schendel and Charles Hofer have suggested four key aspects of Strategic Management- 1) Goal Setting 2) Strategy Formulation 3) Administration 4) Strategic Control The Strategic Management process Strategic Planning – includes both the goal-setting and strategy-formulation processes. Strategy Implementation – involves with action based decisions. Levels of Strategy: Some key Distinctions Corporate-level strategy: Strategy formulated by top management to oversee the interests and operations of ultiline corporations. Business-unit strategy: Strategy formulated to meet the goals of a particular business; also called line-of- business strategy. Functional-level strategy: Strategy formulated by a specific functional area in an effort to carry out business- unit strategy. The Corporate Portfolio Approach Portfolio framework – An approach to corporate-level strategy advocated by the Boston Consulting group; also known as the BCG matrix.