Strategic Planning and Management, Essay Example

Strategic planning is a technique that has gained a great number of supporters in the modern management. Some mistake this valuable tool with regular planning, but these two concepts are very different from one another. It is also often supposed that strategic planning is only suitable for large businesses with great numbers of staff and massive production volumes. Smaller enterprises were expected to “move with the flow” and never implement the ideas, which the larger businesses use.

However, the existence of a strategic plan is an absolute necessity for the business that intends to succeed. It is not to be confused with the business plan. Business plan is a thorough set of operations, which describe in every detail how the everyday operations of the enterprise are going to be organized and the way the entire system will work. Strategic planning involves explaining the true mission, goal, and final aim of the existence of the company. Strategy is about setting a vision of what the business will be in the future, to which size it will grow, etc. Lack of the ultimate, long-term perspective leads to an eventual failure, or significant underperformance of the business. If the owner of the small business wishes to achieve some local success and does not think about what it is going to be like in 10 years, his company is highly unlikely to live for ten years, or grow into anything bigger than he initially thought. Planning strategically means first asking the reason for the existence of the organization, and then generating a direction, in which it should develop.

There is no common technique that can be used to create a strategic plan, though some pieces of advice have to be followed. A good strategic plan should answer to the following criteria (Small Business Resource):

• Serve as a framework for decisions or for securing support/approval,
• Explain the business to others in order to inform, motivate and involve,
• Assist benchmarking and performance monitoring,
• Stimulate change and become building block for next plan.

Strategic Management

Strategic management is the art of leading the organization to its long-term goals in the most efficient manner. It involve s a number of vital practices, such as setting long-term goals, choosing the company’s organizational form, deciding on the steps that need to be made on the way to the final objective, etc. This type of activity may seem a very abstract one, as no specific numerical details need to be provided on this stage. This, however, does not make a strategic management a set of pointless proclamations.

Strategic management includes series of highly useful tools that can help any organization in its development. Six sigma method, SWOT analysis, and systematic thinking are only a small part of all the highly efficient business instrumentals, which were generated by this field of studies. Using strategic thinking in management allows setting long term goals, creating a strong corporate culture, thoroughly study the environment in which the company is going to function.

Small Business

Strategic planning and management tools can be effectively used to run a small business. Moreover, it actually should be used to compete successfully on the market. It is rather interesting to note that strategic planning is easily applicable to the small size of a company. In order to prove that, generic small business can be takes as an example. A very fast evolution in the field of information technologies has opened a great variety of possibilities for the small businesses in this area. Therefore, I suppose that a small company specializing in creating the web-sites and the search engine optimization (SEO) could be a good example. Even if the size of the company does not exceed 5 employees, some strategic management tools are applicable (Stowel, 2007):

• Step 1: Foresee the threats and opportunities for the business. (Threats – competition from the cheap labor force from India and Pakistan. Opportunities – good possibilities for remote employment, growing demand for the IT services)
• Step 2: Decide how to respond to these emerging threats and opportunities. (To deal with the competition from the cheap labor force, strategic marketing can be used to position the business as a genuine US service, which will attract more loyal customers)
• Step 3: Identify the source which those risks and opportunities will come from (A simple competitor analysis can be preformed to study the sources of potential threat).
• Step 4: Figure out when the risks will hit or if the opportunity is truly valuable (Estimate the actual probability that the threats will harm the business).
• Step 5: Execute actions to mitigate the threats or take advantage of the opportunities (Stowel, 2007).

As related to the four function of management, they are easily and effectively applied in any business model, no matter large or small. Strategic planning is vital to analyze the environment in which the business will be operating. Organizing involves choosing the most effective structure for the business. Leading involves creating a strong culture and raising the motivation for the employees. And finally, strategic control means monitoring the results of the operations, comparing them with the plan, and developing executive decisions.

References

Strategic Planning. Small Business Resources. Retrieved August 2, 2009 from: http://www.2-small-business.com/business_strategic_planning.html

Stowel, S. (2007) Strategic Planning is For Small Businesses Too. Retrieved August 2, 2009 from:  http://www.cmoe.com/blog/strategic-planning-is-for-smaller-businesses-too-part-1.htm