STRATEGIC BUSINESS MANAGEMENT AND PLANNING

Strategic Business Management and Planning



Strategic Business Management and Planning

Introduction

Today's organizations operate in a rapidly changing environment. Consequently, one of the most important assets for an organization is the ability to manage change. Organization Development is the attempt to influence the members of an organization to expand their candidness with each other about their views of the organization and their experience in it, and to take greater responsibility for their own actions as organization members. The assumption behind organization is that when people pursue both of these objectives simultaneously, they are likely to discover new ways of working together that they experience as more effective for achieving their own and their shared (organizational) goals (Schein 2002, 30-257).

Reasons For Strategy

ROE

Return on equity refers to the profits earned per rupee invested by shareholders or owners of a business (explained in more detail in a later section). This is the primary reason for the existence of a business. In order to increase ROE in a competitive environment, strategy is required. Peter and Certo, 1991, state that organisations with good strategic management tend to increase their levels of profit and profitability.

Repositioning

Businesses operate in a dynamic world. The markets, competition and other environments such as the political, economic, social and technological environments that affect business are all changing constantly. Thus, in order to succeed, businesses also need to change (or to reposition) in response. Strategic planning is essentially an activity lf aligning the organization with the environment. Thus it enables effective repositioning when required (Oeilly, 2000, 31-77).

Who should get involved?

According to the video, the CEO of the company should be involved in strategy formulation. This is logical since he CEO is the executive who is held accountable for the performance of the organisation as a whole?(Peter and Certo, 2001). In practice, the CEO dominates strategy formulation in all small firms, in most medium sized firms and in many large firms (Higgins and Vincze, 2006).

Another group that should get involved in strategy formulation are the key players in implementing the strategies. These are the senior line managers (Higgins and Vincze, 2006). These are the ones closest to the problems or opportunities and their solutions. Higgins and Vincze (2006) further states that within the current trends of increased delegation of work and flatter organizations these line managers are increasingly engaged in making strategic decisions (Oeilly, 2000, 31-77).

Peter and Certo, 1991 quote George Grune on the importance of the line managers in strategy formulation as llowing others to participate in the strategic management process even to the extent of lower level line managers results in more realistic goals, objectives and strategies (Pearce & Robinson, 2004, 63-108).

Who else should get involved?

Apart from the strategists and implementers (Higgins and Vincze, 2006) a third group of facilitators should get involved in strategy formulation. Particularly in large organizations, when the activities involved in strategic planning get too extensive, many of them are delegated to a group of planners. The size of this group may vary from just two ...