03 May Strategic Planning
Week One Lecture
Chapter One: Strategic Management
Welcome to Strategic Planning for Organizations. Strategic planning is an essential part of every organization. In order to understand strategic planning for organizations, there are several components that need to be identified. Let’s first start by looking at the definition for strategy. According to Carpenter and Sanders (2009) “strategy is the coordinated means by which an organization pursues its goals and objectives” (p.10). In our textbook there is an illustration of the strategic management model, Figure 1.1. In this model there are four parts: strategic thinking, strategic planning, internal analysis, and operational and budget planning, all of which equate to one thing – implementation. Below is a video that does a great job illustrating the strategic management model. Strategic Management Model – By Prof. Mohammed Ahmed. (http://youtu.be/XP9F1xcuRrc) In an effort to think outside the box in terms of strategic planning, like so many things in our world, there are multiple ways to do things and still achieve desired results. According to Dr. Carter McNamara “there is no one perfect strategic planning model for each organization. The approach, or model, for strategic planning depends on several factors” (n.d., para1). Dr. McNamara outlined six models that all relate to strategic planning (n.d.):
Model 1 – Vision-Based or Goals-Based Strategic Planning Model 2 – Issues-Based Planning Model 3 – Alignment Model Model 4 – Scenario Planning Model 5 – “Organic” (or Self-Organizing) Planning Model 6 – Real-Time Planning
Our textbook illustrates that strategic planning consists of five steps: “1. Strategic thinking including external analysis, 2. Internal analysis, 3. Identifying key strategic issues, 4. Developing viable strategic alternatives and 5. Choosing the best strategy” (Abraham, 2012, pg 4). Think back to a time when you were responsible for planning something. Perhaps it was a vacation trip, a baby shower, a wedding, or a family picnic. There are several things that need to happen in order to have everything go as planned. Let’s use the example of a vacation. You first need to “strategically think” about where you want to go, what type of weather you want to have, if you prefer to be near a beach, mountains, lake, etc. Once you have decided on where you want to go, you then need to conduct an “external analysis”. For example; where you will stay, how you will get around, if there are restaurants nearby, what activities you can do there, etc. Then you move on to the “internal analysis” in which you look at your finances; what you can afford, if you can get the time off work, whether you can arrange pet sitting, etc. Next we move onto the “identifying key strategic issues.” In this scenario it might consist of the following; can we get to this location by plane, boat, or car? How long will it take to get there? Do we need to plan an extra day for vacation due to the time it takes to travel there? Can we use our Visa, Master Card, etc.? Next is “developing viable strategic alternatives.” This is the “what if’s”… What can we do if we arrive and our hotel is overbooked and we don’t have room? What if we miss the flight? What if someone gets sick while on this vacation? Lastly is “choosing the best strategy.” Now that we have identified the place we want to go, the time needed for this trip, how we will get there, where to stay, how to get around, and a backup plan should anything go wrong, we are now ready to “implement”, or book the vacation. For organizations the process is similar but typically involves a higher scale of analysis and decision making. There are two key elements that are vital to strategic planning for organizations. The first is to understand the organizational mission. The second is to identify the organizational vision. Strategic management and planning work hand in hand by understanding the company’s mission and vision. One cannot create a strategic plan without understanding what the overall vision and mission are. Below are two interesting videos that relate to strategy: 7 Steps to Successful Strategy and Implementation – by Robynne Berg (http://youtu.be/LkesApAMSQk) You need strategy for Your Organization – Prof Michael Porter – by Reza Baniasad. (http://youtu.be/DViVtgD0xwE)
Chapter Two – Leadership, Governance, Values, and Culture
Leadership within an organization requires a level of knowledge in terms of the direction the company is pursuing. In order to maintain such direction, it is important to have a guide to help keep the leadership and organization on track. For many companies this guide is known as a mission statement and a vision statement. According to Hill and Jones (2010), “a company’s mission describes what the company does.” This is true, but it goes beyond just identifying what the company does. It is important to capture the essence of your company’s goals and philosophies (Entrepreneur, 2003). The mission statement should also identify “what your business is all about to your customers, employees, suppliers and the community” (Entrepreneur, 2003, para1). Below are some great questions to ask when composing a mission statement:
· Why are you in business?
· Who are your customers?
· What image of your business do you want to convey?
· What is the nature of your products and services?
· What level of service do you provide?
· What roles do you and your employees play?
· What kind of relationships will you maintain with suppliers?
· How do you differ from your competitors?
· How will you use technology, capital, processes, products, and services to reach your goals?
· What underlying philosophies or values guided your responses to the previous questions? (Entrepreneur, 2003, para 9).
The vision statement identifies the desired future state of the organization; “it articulates what the company would like to achieve” (Hill & Jones, 2010, pg 15). According to Arline (2013) “a good vision statement provides the inspiration for the daily operations of a business and molds its strategic decisions” (para 1). Here is a basic example: Most adults at some point in their life will think about goals they wish to accomplish. For many in this class, it is assumed finishing your degree is one of those many goals. For some it may be to find their dream job, others it may be to purchase a home. Some have goals of working in Washington or others to perform on Broadway. We all have goals in mind that wish to achieve one day. A vision statement would help us recognize these goals by writing them out in a statement that identifies these goals and whether they are short or long term goals. Just to be clear, a vision statement does not outline how we will achieve these goals, as that comes from the tactical, operational and strategic goals that all lead up to the vision we have outlined.
Often people confuse a mission statement with a vision statement, thinking they are one in the same; they are not. So often these two statements are used interchangeably. Below is a clear explanation of the difference between the two:
· Mission statements are present-based statements designed to convey a sense of why the company exists to both members of the company and the external community. Vision statements are future-based and are meant to inspire and give direction to the employees of the company, not anyone outside the company (Hom, 2013, para. 4).
Now that it has been established what the mission and vision statements consist of, the next step would be to look at the leadership and identify the difference between a leader versus a manager. Our textbook provides a great outline of the differences between a leader and a manager. See table 2.1 in our textbook for more information. Through the years there have been numerous papers and definitions that describe the differences between the two. The most basic definition would be that a leader is one that people follow because they choose to and a manager is one that people follow because they have to. In terms of strategic planning, most companies have an organizational design, which identifies what role each member of the company has, who they report to and what they are responsible for. If you are able to, take time this week to review your organizational chart and identify how the company design is set up. In addition, seek out to find if your company has a mission and/or vision statement and what it says. Forbes School of Business Faculty
References
Ahmed, M. (2010, June 9). Strategic management model [Video file]. Retrieved from http://youtu.be/XP9F1xcuRrc Arline, K.. (2014, December 11). What is a vision statement? Business News Daily. Retrieved from http://www.businessnewsdaily.com/3882-vision-statement.html
Baniasad, R. (2012, July 22). You need strategy for your organization – Prof Michael Porter [Video file]. Retrieved from http://youtu.be/DViVtgD0xwE
Berg, R. (2011, Oct 2). 7 steps to successful strategy and implementation [Video file]. Retrieved from http://youtu.be/LkesApAMSQk
Carpenter, M. & Sanders, W.G. (2009). Strategic management. Upper Saddle River, NJ: Pearson Education Inc. Entrepreneur (2003, October 29). How to write your mission statement. Retrieved from http://www.entrepreneur.com/article/65230
McNamara, C. (n.d.). Basic overview of various strategic planning models . Retrieved from http://managementhelp.org/strategicplanning/models.htm
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