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Importance of Strategic Planning

Discuss about the Ensuring Leadership Continuity and Building.

Now a day with the changing era the organizations management process has also been modified and developed according to choice and preference of the customers and prospective clients of the company. To incorporate sound management system within an organization, initially a company needs to strategically plan the management of the company with the use of efficient tools and techniques. Further the internal and external environments of the company are also being considered to view the activities conducted by the business. Along with fulfillment organization objective by using efficient management techniques the company not ignore the code of ethics defined and the legal obligation of the company (Steiner, 2010). “The following essay provides an overview of role of strategic planning in a modern business environment. Further the internal and external factor affecting the business and with the legal ethics are also discussed.”

Strategic planning is considered as a critical aspect of business success. Differentiating from the traditional planning process, the strategies help the company in thinking innovative and act malleably in flexible market environment. The planning process helps the company to create a roadmap which shall lead them in fulfillment of their organization objective. Further in this case strategic planning helps the company in deciding which target market to attract and with means the company can gain competitive edge. With a proper sense of direction and outline, it becomes easy for the company to lead the market. Also this process helps the company in executing day to day business activities of the company (Moser, 2012). Summing up the above statements it shall be concluded that strategic planning assist the company in carefully analyzing the market conditions and work accordingly to fulfill the objective optimizing the resource provide to them. From the initial stage the planning helps the company in setting mission for the management for the organization. Many companies have lost their value in the market even after using effective techniques of management also; the reason is due to incorrect mission statement defined for the company. A qualified mission statement provides between links between idea and practices implemented by the organization. Also a mission statement defines the code of ethics which a company shall follow in order to curb the penalties. After analyzing the mission of the company the role of strategic planning is to set goals to apply procedures in the management. Substantially goals lead to program and program leads to quantitative change in profits of the company. The effects of a strategic planning are identified by evaluating the progress of the company and comparing them with the planned objectives. So it is the role of strategic planning process to initiate missions in the organization and implement them to achieve competence in the market (Allison, & Kaye, 2011).

Benefits of Strategic Planning

By conducting the strategic planning process in an organization, the company gains several benefits in qualitative as well as quantitative terms, thus this planning has become important for the organization to survive in the competitive market. The process of strategic planning helps in efficient and optimum use of resource in the organization. Harassing the resources will lead to depletion of natural resource and also this practice is unethical whereas optimizing minimum resources will incur loss for the company. Thus strategic planning helps the company in generation of product and services by using resources optimally. Further planning helps the company in establishing definite goal which is achievable by the company. Setting standard whose completion is next to impossible for a company will lead to demotivation within organization. Apart from that this process also reduces the risk of uncertainty in a company by evaluating the outcomes and market conditions on a prior basis (Rothwell, 2010). The process of team building is initiated through the strategic planning resulting in better communication within the organization. Such benefits of strategic planning help the company in creation of competitive advantage in the market.

There are many factors present in the market which affect the environment and working of the organization. The factors are further classified into internal and external factors. Internal factors refers to those factors which are related to the internal working of the organization whereas external factors are those factors which are present in the external environment of the business and affect the internal environment of the organization (Crane, & Matten, 2016).

Furthermore, the internal factors include mission and objectives of the organization, management structure, human resource, communication within organization etc. The mission as discussed earlier is the most important aspect of the organization on the basis of which activities in the business are conducted. The mission statement drives the future of the organization and decides the market in which the company shall and provide services to customers (Oliveira, & Martins, 2011). Another aspect of internal factor is management structure and nature of the organization; it includes the composition of board of director in an organization and the organizational structure of organization. The management structure also includes the approach of the company to solve the problem and risk management. The communication of the business also affects the activities of the business, as if there is communication within the organization structure then the company won’t be able to achieve efficiency. Also many problems will also not resolves due to difference in thinking of people. The most important internal factors which affect the activities of the business is the personnel of h organization. If the employees of the company are highly qualified and efficient then the organization will achieve its objective whereas if there is dispute in the human resource then the company will not achieve competence. The porter’s five forces also efficiently define the internal factors affecting the environment which are, bargaining power of buyer, bargaining power of supplier, threat of substitutes, threat of new entrants and industry rivalry. The company uses this model to analyze the internal factors affecting the business operating environment (Lewin, Massini, & Peeters, 2011).

Internal Factors and Business Management

Further considering the external factors of the organization, the company conducts PESTLE analysis to analyze the external environment. The PESTLE analysis stands for political, environmental, social, technological, legal and economic factors. The political factor includes governmental laws and tariffs imposed in the market; it also includes subsidies grated to the firms. The environmental factors include factors related to the climate which affects the business activities. Weather and ecological change are also included in this factor (Lindner, & Wald, 2011).

Additionally social factors are the cultural aspects which create fluctuation in the business environment. Population, growth rate, safety are some of the factors lying under this aspect. Technological factors include the technological changes present in the external environment which affects the internal environment of the organization. Quality of technology, speed of internet, innovation techniques etc. are some of the factors occurring under this aspect. The legal factors includes laws related to the organizations such as health laws, safety laws etc. economic factor refers to the factor which includes the economic variable present in the environment. Such factors include demand and supply of product and services (Naranjo-Valencia, Jiménez-Jiménez, & Sanz-Valle, 2011).

It is an important aspect of strategic planning that companies have to determine set of rules and guidelines to follow in the business management. It is difficult for the company agree on all terms related to humanities, so the company started defining themselves business ethics which they shall comply in order to inculcate rightful activities in the management. Further there are different theories used by the company which assist them in implementing the code of conduct defined by them. The Utilitarianism insists the company to should perform action in the organization concerning the rules or principles made by them. Also it is the belief of this approach that the company shall never disobey or compromise the moral beliefs of the organization, the activities shall always provide a view of the basic rules defined by them (Michaelson, Pratt, Grant, & Dunn, 2014).

The Kantian deontology theory suggests that the activities of an organization are considered to be ethical if it abide the universal laws worldwide and do not harm the interest of any individual. The theory also believed that every individual shall be treated fairly with respect. The baseline of the theory states that morality shall be followed in all organizations irrespective of the regulations. In no exceptional case a company can waives the moral rule and guidelines (Fairhurst, & Grant, 2010).

The rights theory of ethics states that, in order to fulfill the rules defined, the company formulates set of standards and tool which shall be followed by all. Also the human rights shall be independent from the influence of various factors. Further there are two types of rights positive and negative rights. Positive rights are those which shall be obligated by the company to inculcate goodness and positivity in their work whereas negative rights refers to those rights which a company shall be obliged to fulfill in order to stop them from doing wrongful activities (Heugens, & Scherer, 2010).

Conclusion

Thus, in the limelight of above mentioned statements it shall be noted that the process of initiation of strategic planning is essential for a company to gain the competitive edge. This process helps the company to define set of rules and standards to follow and achieve the target.

References

Allison, M., & Kaye, J. (2011). Strategic planning for nonprofit organizations: A practical guide and workbook. John Wiley & Sons.

Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Fairhurst, G. T., & Grant, D. (2010). The social construction of leadership: A sailing guide. Management Communication Quarterly, 24(2), 171-210.

Heugens, P. P., & Scherer, A. G. (2010). When organization theory met business ethics: Toward further symbioses. Business Ethics Quarterly, 20(4), 643-672.

Lewin, A. Y., Massini, S., & Peeters, C. (2011). Microfoundations of internal and external absorptive capacity routines. Organization Science, 22(1), 81-98.

Lindner, F., & Wald, A. (2011). Success factors of knowledge management in temporary organizations. International Journal of project management, 29(7), 877-888.

Michaelson, C., Pratt, M. G., Grant, A. M., & Dunn, C. P. (2014). Meaningful work: Connecting business ethics and organization studies. Journal of Business Ethics, 121(1), 77-90.

Moser, C. (2012). Gender planning and development: Theory, practice and training. Routledge.

Naranjo-Valencia, J. C., Jiménez-Jiménez, D., & Sanz-Valle, R. (2011). Innovation or imitation? The role of organizational culture. Management Decision, 49(1), 55-72.

Oliveira, T., & Martins, M. F. (2011). Literature review of information technology adoption models at firm level. The electronic journal information systems evaluation, 14(1), 110-121.

Rothwell, W. J. (2010). Effective succession planning: Ensuring leadership continuity and building talent from within. AMACOM Div American Mgmt Assn.

Steiner, G. A. (2010). Strategic planning. Simon and Schuster.

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