Everyone recognizes that there is a hierarchy that is involved in managerial decision-making. However, very little acknowledge the process that is taken to reach rational decisions that will benefit both the company and employees. This paper will emphasize the importance of planning and strategic management and the benefit that it may bring to any business setting. Both of these processes were introduced in order to produce an effective and efficient format for reaching certain goals. However, no one organization is identical; therefore, you may decide which process is more beneficial for both you and your team.
In the hyper-competitive environment, it is difficult for business houses to survive, grow, and expand in the long-run if they do not have strategic planning. ( surbhi, S. http://www.keydifferences.com). Strategic planning should not be mistaken for strategic management. While both share the same goal, they must both be utilized with different processes. Essentially, it is upper management’s responsibility to ensure that decisions and actions are assembled in order to achieve organizational goals. Strategic planning is a future oriented activity which tends to determine the organizational strategy and used to set priorities. ( surbhi, S., http://www.keydifferences.com). Imagine planning a vacation; you plan ahead based on your schedule and interests. It’s an analytical process that steers away from actions due to its long term goals. We see this as a way to work more efficiently because we are able to come to a more rational decision making process. The actions are identified and analyzed; however, these actions are not acted upon without the assurance that the plan is beneficial in all aspects depending on organizational needs. It’s important to remember that strategic planning is performed by high level managers. This is because these decisions are typically implemented for a long term objective rather than short term.
There are two approaches to strategic planning. These two approaches are top down and bottom-up. It entails a centralized approach to strategy formulation, in which the planning team determines the organizations mission, objectives, and goals. ( Surbhi, S. , http:// www.keydifferences.com). As we get into bottom-up approach, we utilize autonomous or semi-autonomous units to determine the strategic role. ( Surbhi, S. http://www.keydifferences.com). Incorporating these approaches will enable your organization to envision your future over the next several years, assess your current environment, develop strategies to address any current problems, assign expected timelines to turn your plan into reality, and minimize risk. When we incorporate strategic planning and risk, you’ll assess your current situation regarding resources, environment, and strengths and weaknesses in order to minimize risk as much as possible. A better way to develop a healthy work environment is to get employees involved in brain storming strengths and weaknesses to build enthusiasm. Employees are a crucial aspect when envisioning positive changes because they are familiar with the ins and outs of the organization.
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When we get into strategic management, most people assume that it is the exact same as strategic planning; however, that is not the case in regards to formulating strategies to improve a certain short term goal. The term strategic management entails the process that helps the organization assess their internal and external business environment to set objectives, establish direction, and implement strategies that aim towards the achievement of the goals of the organization. (Surbhi, S. http://www.keydifferences.com). This process is typically assessed in order to gain market advantage. While strategic planning focuses on making optimal decisions, strategic management gets into focusing on producing results. It’s more of an action oriented process that gives an organization a chance to produce new ideas, whether it be new products, new market targets, or up to date technologies. In order for the process to be successful, an organization must identify the actions that must be taken, the individuals that will perform these actions, the right time to perform these actions, and the way to perform them. ( Surbhi, S.,http://://key differences.com).
An organization is said to have competitive advantage if its profitability is higher than any other company in the same industry. In order for complete success, the manager in charge of the process must have a thorough knowledge of the competitive environment in order to enforce proper decisions. A SWOT analysis(strengths, weaknesses,opportunities,and threats), is highly recommended. ( Prachi Juneja, http://managementstudyguide.com). By doing this, you plan for the predictable and unpredictable contingencies. It gives the organization the opportunity to identify the direction in which it is moving. It’s a continues process that evaluates business strategies in order to obtain an advantage against competitors. By evaluation on a regular basis, it implements the acknowledgement on whether or not changes need to be made. Involving employees will also introduce them to a broader perspective on exactly how their involvement impacts their organization. Once appropriate measures are taken by both employees and managers, they can properly focus in efficiency and effectiveness to better reach their goals. If various departments are pulled together to determine the goals, they are able to successfully face any changes approaching. It is the managers responsibility to ensure that everyone is on the same page and has a clear understanding of the plan being implemented. A good question to ask yourself regarding this process is, “where are we” and “where do we want to be”.
Conclusion
I believe that’s it’s safe to say that the overall aspect of strategic management is far more imperative than the role of strategic planning in terms of an organizations survival, growth, and proficiency. However, that does not necessarily indicate that the role of strategic planning is not beneficial to the organizations short term goals. Both processes go hand in hand when discussing the vision of long term goals. So yes, there is a hierarchy when making rational decisions involving an organization. However, there is structure of processes that take place in order for a company or business to grow and survive. Even small businesses are realizing that planning and strategic management is a crucial key in survival within their industry. Targeting strengths and weaknesses will ultimately have a positive impact in short and long term goals. Planning for the future or devising a strategy to successfully accomplish your goals is just a part of how organizations can grow stronger within the corporate structure and with profit margins.
