Strategic Planning and Its Importance in the Current Business World
It cannot be denied that there have been several great changes during the previous century, especially considering the technological changes that have affected not only culture but also the norms that are being followed by the people. These changes have also inadvertently affected organizational strategies and, of course, the business world.
As such, it is thus safe to say that there have been several factors that allowed for the shaping of the current plans and strategies used by organizations today. Communication, in particular, has been one of the most helpful factors for the outcome of the current condition of the economical world; innovations in this area has allowed for wider expanse of business despite the presence of geographical hindrances. Most of all, it has also managed to extend towards understanding not only for the decision-making methods of a particular organization but also with regards to the reasons that have led to these. Cultures are now more easily understood with the variety of societal interaction that occur everyday.
Because of the struggle towards ideas of the people and the continued changes that are occurring even now, there are also legitimate questions being asked concerning the future of the corporations. Fast-paced situations, especially in the regard for the direction in which the multinational enterprises (MNEs) and how this will translate to the small and medium enterprises (SMEs) will go, has been scrutinized and analyzed over the years. Indeed, is there still the need for strategic planning for the corporations, which requires longer periods of building and has the possibility of being outdated even before its implementation?
Indeed, it has been questioned whether there is also the need for the implementation of strategic planning and the advantages that it would bring to the corporation especially with the rate of the demands that need to be fulfilled immediately. With the competition between organizations becoming more fierce and creative, organizations are turning to employing more factors that may be needed for the insurance of their success, such as a thriving human resource department, the possible manipulation of path dependencies, and others, all of which can affect the outcome of their work.
This paper outlines the advantages of strategic planning and management for the business administration, the effects that it has had on the economic world, the advantages and disadvantages, and the direction in which the economic world will be taking regarding the use of strategic planning. Here, the paper will also take the discussion on the different strategies that can be used and how corporations use strategic planning as a way to ensure their success in the business world. Moreover, there is also the analysis on the possible direction in which corporations can take and how strategic planning will be able to help—or, indeed, also how strategic management as a plan will evolve and be used for the corporation’s outcome.
Definition of Strategic Planning
There are two ways of making a decision: the impromptu or spontaneous method in which a quick decision is done based on presented facts and possible without review, while the second is based on carefully calculated outcomes based on the information that were received. The latter involves quite more time before its implementation, as it mostly focuses on the possible affects and directions that can be the outcome, and the possible actions that can be done once the situations have occurred. It is an act of cautiousness and is often associated with the idea of remembering how to dissuade the possibilities that can affect the situation.
In the business world, the term also focuses on the study on how firms are able to improve their marketing abilities, especially when faced with various competitions in the form of other organizations. The factors that may be involved in these also includes the analysis of the demands of the clients and also the employers themselves; the changes that the corporation has brought about to the corporation is based on the decisions that they make due to the enforcement of the advantageous actions. Management issues are also very likely to include strategic planning as part of their training to find ways that they can continue with the methods in which they can go; their responsibility lies on the ideas that they can offer to their organization and the methods that they can choose to ensure the security of their success.
In all, strategic management of an organization is based on the advantages that the members can use for the success ( 2005). These can be categorized based on their ideas that the organizations can use for their advantages. Moreover, these theories are all important due to the focus that they have given, especially based on the factors that may be involved with the formation of the organization and the actions that are to be done; more importantly, there is also the focus on the different features that may affect the on-goings within the organization. Some of the most prominently practiced strategic management methods are briefly discussed to show the corporations continue with their ideas.
Strategic Planning and the Role of Information
There are several stages that the company must associate themselves with in order to build a more strategic plan for the development of their purposes. At this point, there is a need for the developers to have extensive knowledge concerning the company in order to be able to achieve their needs. Several factors have to be considered when setting up the development stage, especially since the company must also associate itself with the company that needs the software.
At this, the following factors must be analyzed:
First, there is the purpose of the software that the organization needs. In order to be able to create the program or information system that the organization desires, it is necessary to be able to have a clear idea of their goal concerning what they are creating. In this, they will know what to include, what are the specific necessities they must incorporate within the system in order to have knowledge of what they will expect of the system, especially since the organization that they are working might have some specifics that they may want to add.
Second, there is a need for the creator of the system to have a clear understanding of the background and culture of the organization that needs the software. This includes knowing what kind of business the organization is involved in, and thus the system may be molded to their business. Although there are some organizations that offer the same products and target the same consumers, it is possible that their business cultures may vary differently, thus resulting to very different ways in which they would wish for their organizations to be run; this may also apply to how they believe their information systems must be managed and operated, and even down to the programs that they may use ( 1999).
Most of all, the organization must also know the vision of the organization wishes to have; technology may be the key to unlocking the competitive futures of the companies that they work in however if manipulated wrongly, it may result to problems that will affect the whole structure of the organization ( 1993). Knowing the goals of the company will also allow the plans for IMS to be molded based on these visions and thus allow for them to have almost similar goals. Although this may also be part of the culture of the organization, especially since the objective of the company is most likely also the basis for the development of the company culture, vision is one of the most important as it puts both the organization and the system being created in the same wavelength and lets the two combine in order to achieve a better outcome.
Finally, in order to make an effective and strategic organization, there is a need for the organization that knows and has been able to analyze the previous system, if there was, before implementing such plans. With this, there will be an analysis on might have been the defects, what were the possible solutions, its strengths and weaknesses, and what should be avoided in the future. This will not only entitle the group’s strategic plan to improve the previous system and produce a better one, it also gives a background on what to expect from those who have already become accustomed to the previous system and thus may make it hard for them to adjust. This will then ensure that there is a chance for the company to achieve higher standards that have previously been set and thus also be able to improve itself. Knowing the previous technology will also be advantageous as it will then be learned how much the members of the organizations will have to adjust and shift, as well as have to relearn the basics of a program in order to continue with the changes, and if they were willing to continue. A thorough investigation of the technology being used before the systems change will also yield more knowledge on the capabilities that the organization has had with the previous system.
With these factors, it is then possible for the organization to improve and achieve better status and reputation than before. At the same time, information will become more freely available to those who are in need and at a faster rate in the case that technology is upgraded; however, irresponsible planning in the part of the company will result to slower use as the employers themselves will have to get used to the new system as well as the software and technologies that they will have to use from now on. With strategic planning and the help of technology, companies may achieve higher growth and more production, as well as have faster obtainment, processing, and distribution of the data.
Resource-Advantage Theory
Competition between organizations and companies are brought about by several results that ill also affect the ways in which the corporation is able to function. The focus on these various features holds that there is the need to establish a point in which these can be regarded as a part of the strength-building for the corporation. One of the factors that are involved in the discussion is the need for the resources.
In this theory, (1996) pointed out that resources is not only limited to the description that is given to the products, but also involve the clients’ ideas and their demands as well as the employers’ needs and the benefits that they can receive. Because of the different ideas that they are receiving, there is also the question on how exactly the corporation will be able to accommodate such demands. However, the resource-advantage theory focuses on the understanding of the culture of both the clients and the employers in order to establish their advantages according to the delegations of the corporations. One of the important structures that was discussed in this idea is that there is also the question on how these will be stabilized based on the conditions that the corporations have brought.
The idea of competitive advantage is also discussed here wherein the organization focuses on the relationship of the people itself. By ensuring that there is a the relative rapport built even with the slightest affiliation, then these may also relatively affect the decision-making and, eventually, the culture itself within the organization, that in turn also affects the cycle of their decision-making in the future.
Core Competence
Meanwhile, (1990) pointed out that the core competence of the corporation, while can also focus on the resources of the organization, also focuses on the different regard on the ways that the people can include their assessment. This focus is based on the different arrangements that are included in the theory. Core competence focuses on the culture of the organization and how they believe they are able to finish a particular project based on their abilities. These take root not only on the strategies used by the corporation but also include the different understanding that they have with regards to the culture. The authors (79) pointed out particular differences as based on the core culture of the corporations and also the sense of responsibilities as based on the determination of the culture, especially comparing the Japanese and the American finishing for the automobiles.
This does not only facilitate with the decisions of the organizational head based on the human resources and also their interaction but also includes the different ways in which the makings of the people are held. There is also the inclusion of the different assessment that they can do and how these factors can be established based on the real-time needs of the people. Such understanding will help with the facilitation of the inclusion of parts that may be overlooked, such as the information and technological changes, their effects on people within the company, the goals of the company itself, and also the outcome.
Advantages of Strategic Management
In explaining the possible outcomes of strategic management, the advantages are also based on the different identifications that they are finding. It has to be noted that strategic management is highly viewed in a dynamic environment and therefore can also be advantageous for the different systems that they may have. Moreover, it is thus more inclined to being open to changes, which is an important factor in the demands that are being brought out in this stage. The dynamic system of strategic management is brought about by the different decision-making factors that allow for changes, and thus also differentiates it from long-term planning (which can, in contrast, be advantageous when in a static environment). Moreover, the mould in which the organization can mould itself will thus be helpful for the entirey.
In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. Traditionally, marketing strategy has been utilized by the private sector in decisively increasing the capabilities of an organization. Marketing can be considered as one of the most important element underpinning successful business creation (, 1994). Perhaps because of its complex applications, marketing have been defined in a variety of ways, based on their purpose, their goals, and others ( 1988). The marketing strategy concept was first promulgated in the late 1950’s (1990). The importance of marketing strategy incorporates oft-repeated elements such as: customer orientation; integrated marketing strategic efforts; and resultant profitability (, 1990).
Undoubtedly organizational innovations will cause some level of change but the extent and effect of this change is no longer a given. In Schumpeter’s original sense of this term, an innovation by definition had a substantial economic impact. An innovation was something that changed the market place in a profound way. The innovating organization was, thus, likely to become the new market leader and to gain an immense advantage over its competitors. With the broadening of the term to include small to radical innovations, sustaining as well as discontinuous innovations and the capacity to create as well as to quickly adopt new technologies, the impact of innovation is no longer a definitional issue. The impact of innovations has become an empirical question. Innovations are likely to cause various organizational impacts such as organizational changes, challenges and issues. However, they may or may not bring about the desired performance results, such as effectiveness, efficiency, cost savings, customer value or a transformation of the market place. Although it is easy to find successful innovations that have increased a company’s efficiency, improved its products, contributed to customer loyalty and even transformed the market place, there are also many cases where innovating organizations fail to reap such benefits.
All corporations may have different strategies in which they allow their organization to operate, which all depend on the different factors that the leaders believe affect their operations, ranging from the environment that their employers are in, the products or services that they are releasing and the dates in which they will be released, and also concerning their human resources that involve the employment, especially regarding their actions that affect the decisions within the departments of the company. With all these factors, it is easier to understand and to visualize that indeed in running a company, there are different features that affect the outcome of the company as well as the way in which the operations within it are being followed. However, emphasis must also be given on the clients of whom the companies are serving, of whom many businesses regard as the source of their operations.
Effects of Strategic Planning to Marketing
Strategies that include the complete assessment of the products’ advantage and the behavior patterns of the consumers based on how they will be able to affect the company through the successful promotion of products are all part of the methods that must be regarded for marketing. Since marketing particularly involves several aspects which include the conceptualizing of the product which is tangible and can be handled by the client, the assessment for its possible distribution and target consumers, and finally its creation, which includes not only the search for parts but also involving background research on its possible problems or side-effects that the consumers and the creators must be aware of. Technology may contribute to the changes that may occur within the business and therefore may also be the reason for the improvements being done for the corporation. It is undeniable that technology has become far reaching over the years of its development as it continues to contribute to the changes and the abilities of the corporation, from the methods in which they are able to gather information, their ways of assessing their services and abilities, and also leaves them with some free time to assess other strategies in which their methods will be improved.
Because of the complexity in which he marketing system operates, those who belong in the system—or the actors—may find that the marketing system may seem different for all those involved in the system; thus, the definition may be different for the consumers, those who are providing the products, as well as those who are managing the system. At the same time, groups are more likely to form while under the marketing system in order to ensure the smooth management of the distribution and receiving of the products. Thus, the organizations formed to keep the marketing systems are important. At the same time, these organizations make use of several equipments that are needed per departments to ensure the continuous flow of the system, and there may also be times when the system calls for these separate organizations to become more cohesive and thus more centralized ( 1971).
Placement of Strategic Management in the Fast-Paced World
In business, there is always the question of caution and how such plans will work in the current environment. Several factors that need to be included are not limited to the cultural and the beliefs of the people, but may even also include the geographical and the physical environment, if only to name a few. Effective organization, as it is being called, can be based on the setting of the corporation and the matter of taking the time to produce answers that will help the outcome: will the people find it easier to simply manage according to their instincts, or is planning ahead and strategic reading of the factors and incorporating them in the business still included in the establishment?
One of the things that should be understood about strategic management is that, while it anticipates the possible situations that may happen, it nevertheless does not in any way dictate the entirety of the corporation’s direction. It also means that situations will be able to provide the different ways that the corporation will head towards even though it will be helpful for the corporation to know how they believe they will be able to determine such. (2000) pointed out that there has always been an indeterminate assessment of the current condition of the situation, and that society—even though fast to change based on the current situation and is thus very much dynamic—can provide more insights on the direction that the corporation is going.
One of the most important factors that have to be remembered is the goal. Implementation of the various strategic processes are all well and good, yet it is important for the organization heads to ensure that their goals are general but also firmly encroached in their culture to provide a necessary direction that the others can follow. The advantages of strategic planning should be played out, yet as a suggestion it can also be helpful for the members to have various directional analysis, more understanding of not only their products and the financial information, but also include the demands, the needs, and the possibilities as provided by their clients. Moreover, the shareholders and the providers are also helpful in the understanding of the growth of the organization; by including that in their entire analysis, then the corporation may show that there is the continued need of their analysis and theories.
With these concerns, companies have then also begun to acknowledge that there is a need for systems evaluation before and after the implementation ( 1999). Several researchers, business scholars, and companies have debated on the forms in which evaluation of the system and the advantages that these will bring to several businesses. Most of all, evaluation has taken in the form of finding out ways in which the chosen IS of the company will benefit and damage them and in what forms.
Thus, in evaluating the system, companies must first see if the current IS is benefiting them based on the hard cost, which includes not only the profits of the company based on hard cash but also on their gains based on their employees and skills. Risks, meanwhile, involves the uncertainties that the company might involve with, including the possible problems that the system may make in a scenario that makes the company unable to cope with their output. However, this may also include problems or situations either controlled or uncontrolled that may cause problems for the system itself, and thus are also included in the uncertainties that they hold. Finally, the total worth of the system must also be included in the evaluation, considering not only the end results of the system but also based on how the system was first set up. Both the costs and the benefits must be assessed at an equal level in order to be able to review if the system does indeed bring advantages and disadvantages for the company.
This way, the company will also be able to assess if there are limitations and drawbacks within the system which they may be able to fix. Such will help with fixing and organizing of the systems. In this case, there too is a need for tactical analysis and planning for the changes the minimal changes that must be done in order to relieve the vulnerability that the system may hold, especially as the company actions mostly relies on the information that they receive and the distribute the information. Most of all, organizations will be able to assess if the plan will and is working based on their set goals and plans. In such, by continuing to profit largely despite some weaknesses, and by being able to deal with these weaknesses, the organizations will most probably have had evaluated the IS strategically.
Because the core of strategic management and planning is not only to understand the financial gains that can be done, but also include the effects that these will have on the culture of the people, advantages can be drawn from the understanding of the consumer-based oriented goals. Moreover, it is also possible to provide employer-based oriented goals and thus allows for the involvement of the workers with the outcome. As such, strategic marketing is also involved with the basic management methods used by the corporation.
Strategic marketing involves not only the planning of the company’s growth but also the analysis on the products and services that the company will offer, the markets in which the company will serve or the target people, and includes the environmental effects the industry will have, as well as intense research on the possible finance and organizational elements needed for the success (Henderson, 2000). Simply said, this process involves the following steps: 1) analyzing the present and possible future situation that the company may find itself in, 2) developing objectives or targets for the marketing course, 3) determining the possible hindrances to the project as well as the standing or current position that the company has, as well as how the position can be changed or used as an advantage, 4) finding the target consumers for the products or services, and 5) designing the project and implementing it to the consumers (, 1992). The process of strategic marketing may be very difficult for the company, especially since it involves several research and data analysis that may take years to gather; the researchers may also not be able to predict the courses in which products and prices may take as time changes. Because of this difficulty, many companies may also decide to merge with other industries to be able to share the data and products that they have, as well as cushion the blow of a failed market analysis in case it happens.
One of the difficulties with strategic marketing is that the planning takes up more time than the actual implementation of the product. This is a great drawback as it may take another company as fast as three months or less to compete with the strategies that the company is taking. In being able to come up with a unique and distinctive plan, the company will be able to carve their reliability and availability to their consumers’ minds. Being one of the first or the only one to introduce the product or service to the public gives the company a lot of credibility when it comes to their services and their research work.
The corporate strategies used by the companies may contribute to the company’s possible success rate especially in the face of crisis that involves the financial aspect of the corporation. The presence of a these strategies may give the company a competitive advantage over their rival corporations through their scheme on how the organizations or departments that make up the industry are able to work together, and at the same time how they establish their reputation in order to continue giving their services to their clients. Here, the corporate strategies that companies use involve the corporate responsibilities and the brands that contribute to the performance of the company.
(2001) stated that corporations should have economic and legal responsibilities to the public at large due to the influence that they bestow upon the public. Because of their services and products which they distribute to their clients, the public have now irresolutely put their trust upon the (1996) enumerated seven economic responsibilities of firms, which are: satisfy customers with goods and services of real value; earn a fair return on the funds entrusted to the corporation by its investors; create new wealth, which helps lift the poor out of poverty as their wages rise; create (and the writer would add, maintain) new jobs; defeat envy through generating upward mobility and giving people the sense that their economic conditions can improve; promote innovation; and diversify the economic interests of citizens so as to prevent the tyranny of the majority. Legal responsibilities, on the other hand, should be to follow the law or the rules that govern firms.
It is logical that those responsibilities, if exercised by the firm, can affect the firm’s operation in general, which includes marketing. The way firms handle and meet those responsibilities can be basically considered as corporate strategy, which can have numerous implications with the firms marketing strategy. Legal aspects of the firm is viewed as a part of its corporate governance and such rules will prevent them from exploring certain marketing strategies that are in conflict with their economic and legal responsibilities. These responsibilities can also be called as corporate citizenship, and be related with consumer marketing. A number of industry surveys suggest that consumers are willing to make an effort to support proactive corporate citizens. For instance, a study shows that 76 percent of consumers are prepared to switch to brands or stores that seem concerned about the community (1997). Similarly, a Walker Information national survey showed that 14 percent of US households actively seek “do-gooders” when making purchases, while similarly, 40 percent judge corporate citizenship as a tie-breaking activity ( 1997). On the contrary, (1997) demonstrate that negative corporate social responsibility associations can have a detrimental effect on overall product evaluation, whereas positive associations can enhance product image and value. Strategies derived from the consumers will be able to help with the corporation improvement. And it is with the legal understanding of the information that the people will be able to find that they can implement their strategies for their own organizations.
Conclusions
With this paper, the role of strategic management has been clarified and shown, especially when it comes to its evolution over the years; the theories that took advantage of the different situations and factors that may involve the outcome are the information technology, the marketing culture, the culture of the people itself, and thus also includes the workers and the clients in their mix. It has also been established that while such decision-making may also take some time, there is also the conclusion that strategic management, in itself, is actually more focused on the development of possible outcomes and the actions that can be done. The goals of the corporations are what keep the purpose of the organization leveled and remembered, especially in a time of crisis. These establish the firm resolution on what or what may not be entirety of the corporation. No matter how fast the business world is, there is always the need to keep one step ahead.
With this, it can be understood that despite the fast-paced community and the visions of the business world, it is still imperative to have a strategic management. In fact, it will be more advantageous for the corporation, especially with the establishment of global marketing and the possible problems that may arise with the establishment of partnership despite culture and societies; such actions would help with the determination of the outcome and also give a more structured argument on the way in which the entire situation is being directed from thereon.
As such, the importance of strategic management has thus been established with the factors that are being included as part of the building of the organization. The decision of the organizations are, of course, part of their own growth and it might be necessary for the corporation to hit some snags along their development, yet with careful planning and learning from their mistakes, it is highly possible that a corporation will then be able to establish a firm ground from which their success can be built on.
References:
0 comments:
Post a Comment