Strategic management

Basic process and strategic management considerations

Planning

•    Strategic business planning
•    Annual operating plans
•    Management plan

Organising

•    Organisational structure
•    Duties and responsibilities
•    Departmental plans

Staffing

•    Individual performance plans
•    Performance based compensation systems
•    Recruitment

Directing

•    Departmental budgets
•    Profit centre budgets
•    Product line budgets
•    Management development & training
•    Supervisory training

Controlling

•    Management information systems
•    Management reporting
•    Outside assistance

The Process

Assemble all the relevant data.

Diagnose the current situation of the business. Decide what are its internal strengths and weaknesses (for example, unit costs are less than the competition, but the distribution system is poor), and its external opportunities and threats.

Develop a business mission statement. A clear definition of the central purpose of the business, its products, services, customers and values.

Develop goals. State, in terms which can be measured, the outcomes expected for the business, across the next three to five years, such as growth, profitability, and market share.

Define strategies. Allowing for contingencies, identify the broad initiatives to be taken and the techniques employed to achieve the specified business goals. Each action point should include the steps to be taken, the people responsible for carrying them out, the time frame, and the resources required

Determine the impact upon the business of implementing these strategies. What resources (human, financial, equipment, time) will be required.

Write up the plan, incorporating the business mission, goals, strategies and impact assessment, along with the financial and budget projections, into a single document

Implement and monitor the plan. Assess the company’s performance relative to the plan at regular (at least annual) intervals.

Revise the plan as necessary. Add or remove plan elements to ensure the healthy development of the business. Flexibility is the key to success.

The management plan

  • A documented organisational structure and job descriptions
  • Measurable performance goals
  • An objective performance review/appraisal system
  • A training and development programme
  • Competency/performance-based remuneration
  • Monitoring and control methods.

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