MT460: Management Policy and Strategy
Strategic planning is a critical part of running a successful business. By anticipating environmental changes and unexpected internal and competitive demands, a strategic management team can plan for company’s long-term goals. “Different from classic business planning, the strategic variety involves vision, mission and outside-of-the-box thinking”, (Evans, 2010). Formulating a strategic plan helps executives to make an organized road map that spells out where an organization is going over the next year or more and how it’s going to get there.
“Strategic management is the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives,” (Pearce, 2013). These decisions are based on the strategic management process, a flow of information that moves through interrelated stages of analysis towards a future goal. The information involved in this process is historical, current, and forecast data on the operation and environment of a business, (Pearce, 2013). Considering the values and priorities of influential groups like stakeholders, managers evaluate the data found in strategic management process and formulate strategy that achieves the company’s long-term mission.
Establishing a vision, mission, purpose, and philosophy or goal is another important part of strategic planning. A company mission is, “The unique purpose that sets a company apart from others of its type and identifies the scope of its operations in product, market, and technology terms”, (Pearce, 2013). Developing a mission is important for a company because it can define the product, market, and technological area of emphasis, while highlighting their values and priorities. A statement of the company’s philosophy, also known as the company creed, usually appears within the mission statement. “It reflects or specifies the basic beliefs, values, aspirations, and philosophical priorities to which strategic decision makers are committed in managing the company,” (Pearce, 2013). The company philosophy often highlights core values that are meant to guide employees. The vision statement is written to describe the “firm’s strategic intent that focuses the energies and resources of the company on achieving a desirable future”, (Pearce, 2013). The vision statement provides guidance and inspiration as to what an organization is focused on achieving. “If an organization cannot define it's "reason for existing (Mission) or "where it is going" (Vision), how can it align people, processes, products or services towards a successful future?” (Evans, 2010). A clear vision and mission can be beneficial in many ways. They can strengthen the culture of a company through a sense of purpose, improve decision-making, by outlining the "big picture;" and, enhance cross-functional relationships through a shared understanding of priorities.
Having a future oriented plan can be beneficial to a successful business strategy in many…