What is determined at the first stage of strategic planning. The main stages of strategic planning: characteristics, analysis, sequence. Planning Stages: Setting Goals
Strategic management can be viewed as a dynamic set of five interrelated management processes. These processes logically follow (or follow) one from the other. However, there is a stable feedback and, accordingly, the reverse influence of each process on the others and on their entirety. This is an important feature of the structure strategic management. Schematically, the structure of strategic management is shown in fig. 1.2.1.
Fig.1.2.1. Stages of strategic planning
The first stage of strategic planning is the analysis of the environment. Environmental analysis is usually considered the initial process of strategic management, as it provides both the basis for defining the mission and goals of the firm, and for developing a strategy of behavior that allows the firm to fulfill its mission and achieve its goals.
One of the key roles of any management is to maintain a balance in the interaction of the organization with the environment. Each organization is involved in three processes:
- * getting resources from external environment(input);
- * transformation of resources into a product (transformation);
- * transfer of the product to the external environment (exit).
Management is designed to provide a balance of input and output. As soon as this balance is disturbed in an organization, it embarks on the path of dying. Modern market sharply increased the importance of the exit process in maintaining this balance. This is precisely reflected in the fact that the first block in the structure of strategic management is the block of environmental analysis.
Analysis of the environment involves the study of its three components:
- * macro environment;
- * immediate environment;
- * the internal environment of the organization.
The analysis of the external environment (macro- and immediate environment) is aimed at finding out what the company can count on if it successfully conducts work, and what complications can await it if it fails to avert negative attacks in time, which can give her the environment.
Analysis of the macro environment includes the study of the impact of the economy, legal regulation and management, political processes, natural environment and resources, social and cultural components of society, scientific, technical and technological development of society, infrastructure, etc.
The immediate environment is analyzed according to the following main components: buyers, suppliers, competitors, labor market.
An analysis of the internal environment reveals those opportunities, the potential that a company can count on in a competitive struggle in the process of achieving its goals. An analysis of the internal environment also makes it possible to better understand the goals of the organization, to more correctly formulate the mission, i.e. determine the meaning and direction of the company. It is extremely important to always remember that the organization not only produces products for the environment, but also provides an opportunity for its members to exist, giving them work, providing an opportunity to participate in profits, providing them social guarantees etc.
The internal environment is analyzed in the following areas:
- * personnel of the company, their potential, qualifications, interests, etc.;
- * management organization;
- * production, including organizational, operational and technical and technological characteristics and research and development;
- * company finances;
- * marketing;
- * organizational culture.
The second stage of strategic planning is the definition of the mission and goals of the organization. It was said earlier that one of the key tasks of management is to maintain a balance between the input and output of the organization. Another equally important task of management is to establish a balance of interests of various social institutions and groups of people interested in the functioning of the organization and influencing the nature, content and direction of its functioning. The balance of interests determines where the organization will move, its target orientation in the form of a mission and goals.
The definition of the mission and goals of the organization, considered as one of the processes of strategic management, consists of three sub-processes, each of which requires a large and extremely responsible work. The first sub-process consists in the formation of the mission of the company, which in a concentrated form expresses the meaning of the existence of the company, its purpose. The mission gives the organization originality, fills the work of people with a special meaning. Next comes the sub-process of setting long-term goals. And this part of strategic management ends with the sub-process of setting short-term goals. The formation of the mission and the establishment of the goals of the company lead to the fact that it becomes clear why the company operates and what it strives for.
The third stage of strategic planning is the choice of strategy. After the mission and goals are defined, the stage of analysis and strategy selection begins. At this stage, a decision is made about how, by what means, the company will achieve its goals. The strategy development process is rightfully considered the heart of strategic management. Defining a strategy is not drawing up a plan of action. Defining a strategy is making decisions about what to do with a particular business or product, how and in what direction to develop an organization, what place to occupy in the market, and so on.
The fourth stage of strategic planning is the implementation of the strategy. The peculiarity of the process of implementing the strategy is that it is not a process of its implementation, but only creates the basis for implementing the strategy and achieving the company's goals. Very often there are cases when firms are unable to implement the chosen strategy. This happens because either the analysis was carried out incorrectly and incorrect conclusions were drawn, or because unforeseen changes in the external environment occurred. However, often the strategy is not implemented also because management cannot properly attract the potential of the firm to implement the strategy. This applies in particular to the use of human potential.
The main task of the strategy execution phase is to create the necessary prerequisites for the successful implementation of the strategy. Thus, the implementation of the strategy is the implementation of strategic changes in the organization, transferring it to a state in which the organization will be ready to implement the strategy.
The final stage of strategic planning is the assessment and control of the implementation of the strategy. Evaluation and control of the implementation of the strategy are the logically final process carried out in strategic management. This process provides a stable feedback between the progress of the process of achieving goals and the actual goals facing the organization.
The main tasks of any control are as follows:
- * definition of what and by what indicators to check;
- * assessment of the state of the controlled object in accordance with accepted standards, regulations or other benchmarks;
- * clarification of the reasons for deviations, if any, are revealed as a result of the assessment;
- * making adjustments, if necessary and possible.
In the case of monitoring the implementation of strategies, these tasks acquire quite a specific specificity, due to the fact that strategic control is aimed at finding out to what extent the implementation of the strategy leads to the achievement of the company's goals. This fundamentally distinguishes strategic control from managerial or operational control, since it is not interested in the correct implementation of the strategy or the correct execution of individual works, functions and operations. Strategic control is focused on finding out whether it is possible to implement the adopted strategy in the future. and whether its implementation will lead to the achievement of the set goals. Adjustment based on the results of strategic control can relate to both the implemented strategy and the goals of the company.
Stages of strategic planning
The strategic planning process consists of several stages.
1. At the first stage of planning, an essential decision is the choice of the goals of the organization.
The main overall goal of the organization, i.e. a clearly expressed reason for its existence is designated as its mission (a responsible task, role, assignment). Goals are developed to carry out this mission.
The mission details the status of the organization and provides direction and direction for setting goals and strategies at various organizational levels.
The mission statement should include:
1. the task of the organization in terms of its main services, its main customers, its main technologies - i.e. what activities the organization is engaged in;
2. environmental factors in relation to the organization;
3. culture of the organization - what type of working climate exists in the organization, what kind of people are attracted to this climate.
For example, the mission of the Department of Social Protection is to meet the social needs of the population. The mission of the Center for Social Assistance to Families and Children is to provide comprehensive assistance and support to families and children.
Some leaders do not attach importance to the choice of mission. This is especially true for leaders. commercial organizations. They believe that the mission is to make a profit.
The mission represents value to the organization, but the values and goals of top-level leaders also affect the organization. Researchers note that strategic behavior is influenced by values (Igor Ansof). Gut and Tigiri identified 6 value orientations that affect acceptance management decisions, and also that the chosen goals depend on them.
2. Second stage. The goals of social protection organizations are formed and set on the basis of the mission of the organization. Goals must have certain characteristics:
Specific and measurable goals - for example, to support large families registered in the department (absolute number), for example, the goal of a non-state university is to provide training for specialists at lower costs;
Orientation in time - when the result should be achieved (long-term - 5 years, medium-term 1-5 years, short-term up to a year);
Achievable Goals - To serve to improve organizational performance, goals must be achievable. Goals should be mutually supportive - i.e. actions and decisions necessary to achieve one goal should not interfere with the achievement of other goals of the organization. If this condition is not met, then a conflict between departments may arise in the organization. For example, the goals of the center for social assistance to families and children are:
* realization of the right to protection of the family and children by the state;
* promoting the development and strengthening of the family, as social institution;
* improvement of socio-economic conditions of life and well-being of the family;
* humanization of family ties with society and the state;
* Establishment of harmonious intra-family relations;
* Prevention of juvenile delinquency and neglect.
3. In the third step of the strategic planning process, after establishing the organization's mission and goals, the organization's external environment is examined. The external environment is assessed according to three parameters:
Changes that affect different aspects of the current strategy;
What factors pose a threat to the strategy;
Which factors provide more opportunities to achieve the goal by adjusting the plan.
They mainly pay attention to such factors as social, economic, political, technological development, the state of the labor market, investment.
Environmental analysis is the process by which strategic planners monitor factors external to the organization to identify opportunities and threats to the organization.
4. Fourth stage. Management Survey of Strengths Internal and weaknesses organization - a methodological assessment of the functional areas of the organization, designed to identify its strategic strengths and weaknesses. The survey involves the study of such internal factors: marketing, financial condition, production, staff condition, organization culture:
Marketing - market share and competitiveness; offered goods or services; demographic situation; the possibility of promoting new products or services on the market; customer service efficiency; advertising opportunities; for example, two aspects of marketing are important for a non-state university: marketing educational services and specialists.
The current financial condition of the organization must be taken into account in any planning, since the lack of financial reserves can ruin any undertaking. When analyzing financial condition the main attention should be paid to the possibility of reducing the cost of production, the degree of dependence of the enterprise on suppliers, the degree of physical and obsolescence of equipment. As for organizations social sphere, then their financial condition is determined by their organizational and legal form. Funding source for public institutions(what social services are currently) are, first of all, budget resources. At the same time, the state establishes certain norms budget financing related costs. This means that financial management should be aimed at optimizing costs (choosing the best, optimal option). Therefore, many types social services are paid. It is also possible to use additional sources of financial resources;
Production - a purposeful activity to create something useful; whether the organization can produce goods or services at a lower price than competitors; whether there is access to new materials and technologies; whether the equipment is modern; production, i.e. the provision of social services is a purposeful activity of all social services;
Staff status - type of employees; competence of employees and top management; reward system; staff development; performance evaluation;
Culture - mores, customs, moral and psychological climate. It is the internal culture that forms the image of the organization both among suppliers and consumers, and in the market. labor resources thus attracting the necessary employees.
5. Fifth stage. Analysis of strategic alternatives. After assessing the external environment and examining internal environment organization, management can determine the strategy that it will follow. The organization faces 4 main strategic alternatives:
1) limited growth - adheres to most organizations. Goals are set from what has been achieved previously, taking into account inflation. The limited growth strategy is applied in mature industries with static technology, while the organization is satisfied with its position. This is the easiest, most convenient, and least risky course of action.
2) growth - an annual increase in the level of short-term and long-term goals compared to the level of indicators of the previous year. This strategy is applied in dynamically developing industries with changing technologies. Growth can be internal or external. Internal growth is the expansion of goods or services. External growth - the acquisition of a supplier firm or one firm acquires another;
3) reduction - managers rarely choose this strategy. Goals are set below what has been achieved in the past. There may be 3 options:
a) liquidation - complete sale of property;
b) cutting off the excess - separate some units;
c) reduction or reorientation - reduction of part of its activities;
4) combination - the combination of any of the three strategies. This type is usually chosen by large firms.
6. At the sixth stage, the strategy is chosen. A strategic alternative is chosen that will maximize the long-term effectiveness of the organization, that is, the result.
The choice is influenced by factors:
1) risk - what level of risk is considered acceptable. A high degree of risk can destroy an organization;
2) knowledge of past strategies - often management is influenced by past strategies;
3) reaction to owners (if joint-stock company) - shareholders limit the flexibility of management when choosing an alternative (commercial structures);
4) the time factor - a decision can contribute to the success or failure of the organization (implementation of a good idea at a bad moment can lead to the collapse of the organization).
7. The seventh stage is the implementation of the strategic plan. The plan must be realistic.
It is necessary to dwell on the main components of formal planning:
1. Tactics - short-term strategies that are consistent with long-term plans. Characteristics of tactical plans:
a) tactical plans are developed in the development of the strategy;
b) tactics are developed at the level of middle managers;
c) the results of tactical plans appear quickly and are correlated with specific actions (the results of the strategy may appear in a few years).
The tactical goal of social work at this stage is to meet the needs of those most in need of social protection categories of the population, taking into account the possibilities of the economy (since targeted social policy is currently being implemented).
2. Policy - is a general guide for action and decision making, which facilitates the achievement of goals. Policy is usually formulated by top-level managers for a long period of time. For example, the policy of providing equal employment opportunities for women; non-disclosure of trade secrets of the organization.
3. Procedures - describes the actions to be taken in a particular situation. If the decision-making situation is repeated, then the management applies the time-tested course of action, and for this it develops standardized instructions. Essentially, a procedure is a programmed decision. For example, the procedure for assigning an old-age labor pension.
4. Rules - are made when management restricts the actions of employees to ensure that specific actions are performed in specific ways. That is, the rule defines what should be done in a particular single situation. Rules differ from procedures in that they are designed to address a specific and limited issue. The procedure is designed for a situation in which a sequence of several interconnected actions takes place.
Sometimes there are conflicts caused by the unwillingness of employees to comply with rules and procedures. In order to avoid conflict situation, the manager needs to inform subordinates about the goals of the rules, explain why it is necessary to do the work exactly as prescribed by the rules or procedures.
Implementation management is needed to execute the strategic plan. Consider the management tools that ensure consistency:
A budget is a method of allocating quantified resources to achieve quantified goals.
Management by objectives is a process consisting of 4 interdependent and interrelated stages:
a) development of clear, concise statements of goals;
b) development of realistic plans to achieve them;
c) systematic monitoring, measurement and evaluation of work and results;
d) corrective actions to achieve planned results.
1) The first stage - the development of goals - repeats the scheme of the planning process.
Once long-term and short-term goals for the organization have been developed, managers formulate those goals for the next level of employees down the line. Managers should support employees in the following areas: information; clarification of the relationship between levels of authority and responsibility; support from staff; horizontal and vertical coordination; resources.
2) At the second stage of management by goals, the main tasks and measures necessary to achieve the goals are determined; establishment of interrelationships between the main activities; clarification of roles, relationships, delegation of relevant powers; estimation of time spent for each main operation; determining the resources required for each operation; checking deadlines and correcting action plans.
3) After the expiration of a set period of time, the degree of achievement of goals, the identification of problems and obstacles, the determination of the causes of problems, the identification of personal needs and the reward for effective work are determined.
4) If the objectives are not achieved, the management has determined the exact reason, it is necessary to decide what actions should be taken to correct the deviation.
5) If the goals are achieved, then the management by goals process can start again - with the setting of goals for the coming period.
8. The eighth stage. The evaluation of the strategic plan is carried out by comparing the results of work with the objectives. Evaluation should be carried out systematically and continuously. When evaluating the strategic planning process, 5 questions should be answered:
1. Is the strategy internally compatible with the organization's capabilities?
2. Does the strategy involve an acceptable degree of risk?
3. Does the organization have sufficient resources to implement the strategy?
4. Does the strategy take into account external dangers and opportunities?
5. Is the strategy the best way use of the organization's resources?
Evaluation criteria: quantitative (growth in the volume of services, level of costs); quality (the ability to attract highly qualified managers and specialists, expanding the scope of services to clients, seizing opportunities).
After choosing a strategy and developing a plan, management must determine whether the structure of the organization contributes to the achievement of goals. The strategy defines the structure. The structure should always reflect the strategy.
Strategic and tactical targets management social work, the main directions of its development can be outlined in the concept of social work and the program-target model of social work management; Social worker can participate in program planning, social policy.
Strategic planning- a set of actions and decisions taken by management that lead to the development of specific strategies designed to help the organization achieve its goals.
According to Peter Lorange, the strategic planning process is a tool that helps in making managerial decisions.
His task is provide innovation and change in the organization sufficiently.
There are 4 main types management activities:
- resource allocation- is the distribution of limited organizational resources, such as funds, scarce managerial talent and technological expertise;
- adaptation to the external environment- covers all actions of a strategic nature that improve the relationship of the company with its environment. Companies need to adapt to both external opportunities and hazards, identify appropriate options, and ensure that strategy is effectively adapted to the environment.
- internal coordination - includes coordination strategic activities to display the strengths and weaknesses of the firm in order to achieve effective integration of internal operations.
- awareness of organizational strategies - it is the systematic development of the thinking of managers by forming an organization that can learn from past strategic decisions.
Strategy is a detailed comprehensive comprehensive plan designed to ensure the implementation of the mission of the organization and the achievement of its goals.
The main theses of the strategy:
a) the strategy is mostly formulated and developed by top management, but its implementation involves the participation of all levels of management;
b) the strategic plan should be developed from the point of view of the entire corporation rather than a specific individual;
c) the plan must be supported by extensive research and evidence;
d) strategic plans should be designed not only to remain cohesive over long periods of time, but also to be flexible enough to be modified and refocused as needed.
Organizational planning and success.
The current pace of change and increase in knowledge is so great that strategic planning seems the only way formal forecasting of future problems and opportunities. It provides senior management with the means to create a long-term plan. Strategic planning also provides a basis for decision making. Formal planning reduces risk in decision making. Planning, in so far as it serves to formulate established goals, helps to create a unity of common purpose within the organization.
Formulating a strategic plan is a thorough preparation for the future. If all managers should engage in formal strategic planning to some extent, then the preparation of strategic plans for the entire organization is primarily the responsibility of top management. Middle and lower managers participate in this work by providing relevant information and providing feedback.
Stages of the strategic planning process
1. Mission of the organization.
2. Goals and values of the organization.
3. Assessment and analysis of the external environment.
4. Management survey of strengths and weaknesses.
5. Analysis of strategic alternatives.
6. Choice of strategy.
7. Implementation of the strategy.
8. Strategy evaluation.
rice. 2 Strategic planning process
1. Mission of the organization
The first and most important decision in planning will be the choice goals organizations - its mission and specific goals.
The main overall goal of the organization, i.e. a clearly expressed reason for its existence - denoted as its mission. Goals are developed to carry out this mission.
The goals developed on its basis serve as criteria for the entire subsequent process of making managerial decisions. If leaders do not know what the main purpose of their organization is, then they will not have a logical starting point for choosing the best alternative.
The mission details the status of the firm and provides direction and benchmarks for setting goals and strategies at various organizational levels. The organization's mission statement should include the following:
- The task of the firm in terms of its main services or products, its main markets and main technologies, i.e. which entrepreneurial activity does the company?
- The external environment in relation to the firm, which determines the operating principles of the firm.
- Organization culture. What type of working climate exists within the firm? What type of people are attracted to this climate?
Viewing the mission in terms of identifying the basic needs of customers and effectively satisfying them, management actually creates customers to support the organization in the future.
The mission serves as a guideline on which leaders base their decisions. Choosing a target that is too narrow can limit management's ability to find alternatives in decision making. Choosing a mission that is too broad can hurt the organization's success.
2. Values and goals of top management
Values are formed by our experience, education and socio-economic background. Values, or the relative importance we place on things, guide and guide leaders when faced with critical decision-making.
Gut and Tagiri established 6 value orientations that influence managerial decision-making:
Value Orientations |
Types of Goals Preferred by Organizations |
|
Theoretical |
True |
Long-term research and development |
Economic |
Practicality |
Growth |
Political |
Power |
Overall volume capital, sales, number of employees |
Social |
Good human relations |
Social responsibility in relation to profit |
aesthetic |
Artistic harmony |
Product design |
religious |
Consent in the universe |
Ethics |
The relationship between the values held by top management and the company-wide goals is important. Leadership values are manifested in the goals of the organization.
Goals should have a number of characteristics:
1. Must be to specific and measurable
By expressing its goals in concrete, measurable terms, management creates a clear baseline for subsequent decisions and evaluation of progress.
2. Orientation of goals in time.
It should not only determine what the organization wants to achieve, but also when the result should be achieved. Goals are usually set for long or short periods of time.
The long-term goal, according to Steiner, has a planning horizon of approximately 5 years. The short-term goal in most cases represents one of the plans of the organization, which should be completed within a year. Medium-term goals are from one to five years.
3. Achievable goals.
The goal should be achievable - which contributes to the effectiveness of the organization.
4. mutually supportive goals.
Actions and decisions necessary to achieve one goal should not interfere with the achievement of other goals.
The strategic management process will be successful to the extent that senior management is involved in setting goals and to what extent these goals reflect the values of management and the realities of the firm.
3. Assessment and analysis of the external environment
Managers evaluate the external environment according to three parameters:
- Evaluate changes that affect different aspects of the current strategy.
- Determine what factors pose a threat to the current strategy.
- Determine which factors provide more opportunities to achieve the company-wide goal by adjusting the plan.
Analysis of the external environment - the process by which strategic planners monitor factors external to the organization to determine opportunities and threats to the firm.
In terms of assessing these threats and opportunities, the role of environmental analysis in the strategic planning process is to answer three specific questions:
- Where is the organization now?
- Where does senior management think the organization should be in the future?
- What should management do to move the organization from where it is now to where management wants it to be?
The threats and opportunities faced by the firm can be divided into 7 areas:
- economic forces (inflation or deflation rates, employment levels, international balance of payments, US dollar stability abroad and tax rate);
- political factors (management should follow normative documents local authorities, government, politicians' attitudes towards antitrust activities, restrictions on hiring labor and the possibility of obtaining a loan, etc.);
- market factors (demographic conditions, life cycles different products or services, ease of market penetration, income distribution of the population and the level of competition in the industry);
- technological factors (taking into account changes in production technology, the use of computers in the design and provision of goods and services, or advances in communication technology);
- international factors (ease of access to raw materials, foreign cartels, exchange rate fluctuations and political decisions in countries acting as investment objects or markets);
- competitive factors (analysis of the future goals of competitors, assessment of the current strategy of competitors, review of the assumptions regarding competitors and the industry in which these companies operate, in-depth study of the strengths and weaknesses of competitors);
- factors social behavior (changing expectations, attitudes and mores of society);
4. Management survey of internal strengths and weaknesses of the organization
The next problem an organization faces will be to determine whether the firm has internal forces to take advantage of external opportunities, as well as identifying internal weaknesses that can complicate problems associated with external threats.
The process by which internal problems are diagnosed is called management survey.
Management Survey is a methodical assessment of the functional areas of the organization, designed to identify its strategic strengths and weaknesses.
Marketing
When examining the marketing function, 7 areas deserve attention for analysis and research:
- market share and competitiveness;
- variety and quality of the product range;
- market demographic statistics;
- market research and development;
- presale and after-sales service clients;
- effective sales, advertising and promotion of goods;
- arrived.
Finance and accounting
A detailed analysis of the financial condition can reveal existing and potential internal weaknesses in the organization, as well as the relative position of the organization with its competitors.
Operations(in the narrow sense - production).
Some of the key questions to be answered in the survey are:
1) Can we produce our goods or services at a lower cost than our competitors? If not, why not?
2) Is our equipment modern and well maintained?
3) Are our products subject to seasonal fluctuations in demand, which forces us to resort to temporary dismissal of employees?
4) Can we serve markets that our competitors cannot serve?
5) Do we have an effective and efficient quality control system?
If an organization has qualified employees and leaders with well-motivated goals, it is able to follow various alternative strategies.
Culture and image (image) of the corporation.
culture reflects the prevailing customs, mores and expectations in the organization.
The image of a corporation, both inside and outside the organization, refers to the impression that it creates with the help of employees and public opinion generally.
5. Analysis of strategic alternatives
The organization faces 4 main strategic alternatives:
- limited growth - setting goals from what has been achieved, adjusted for inflation.
- Growth - an annual significant increase in the level of short-term and long-term goals over the level of indicators of the previous year.
- Growth may be internal and external.
- internal growth can happen by expanding the range of goods.
- External growth may be in related industries in the form of vertical or horizontal growth.
- Reduction - the level of goals pursued is set below that achieved in the past. Several reduction options:
- liquidation- full sale inventories and assets of the organization;
- cutting off the excess- often firms find it beneficial to separate some divisions or activities from themselves;
- downsizing and reorientation- reducing part of their activities in an attempt to increase profits;
- Combination - combination of any of the 3 mentioned strategies.
6. Choosing a strategy
The Boston Advisory Group matrix can help guide options and management decisions.
Cash generation (market share)
Use of cash
(growth rate) high high low
For example, if your product or service has a large market share and a high growth rate (star), you are more likely to follow a growth strategy. On the other hand, if your product or service has a small share of the market and has a low growth rate (dog), you can choose a strategy of cutting off the excess.
The strategic choices made by managers are influenced by a variety of factors:
- risk;
- knowledge of past strategies;
- response to owners;
- time factor.
Management chooses a strategy after it analyzes external opportunities and dangers, internal strengths and weaknesses, and evaluates all of its alternatives and options.
7. Planning for the implementation of the strategy
Once an underlying overall strategy has been chosen, it must be implemented by integrating it with other organizational functions.
An important mechanism for linking the strategy is the development of plans and guidelines: tactics, policies, procedures and rules.
Tactics
Just as management develops short-term goals that are consistent with long-term goals and make it easier to achieve them, it often must develop short-term plans that are consistent with its overall long-term plans. Such short-term strategies are called tactics.
Some characteristics of tactical plans:
- tactics are developed in the development of the strategy;
- while strategy is almost always developed at the highest levels of management, tactics are often developed at the level of middle management;
- tactics designed for more short term than strategy;
- while the results of the strategy may not be discovered for several years, the tactical results appear very quickly and are easily correlated with specific actions.
Politics
Politics provides a general guide for action and decision-making that facilitates the achievement of goals.
Policy is usually formulated by top managers for a long period of time. Politics directs decision-making, but also leaves freedom of action.
Procedures
Procedures – describe the actions to be taken in a particular situation.
Procedures usually describe the sequence of actions to be taken in a given situation. In general, an individual acting according to a procedure has little freedom and few alternatives.
Rules
When a high degree of subordination is required to achieve goals, leaders use regulations . When management wants to limit the actions of employees in order to ensure that specific actions are performed in specific ways, they make rules.
rule defines exactly what should be done in a particular single situation.
Evaluation of the strategic plan.
The development and subsequent implementation of a strategic plan seems like a simple process. But continuous evaluation of the plan is essential to its long-term success.
8. Strategy evaluation
Strategy evaluation carried out by comparing the results of work with the goals. The evaluation process is used as a mechanism feedback to adjust the strategy. To be effective, evaluation must be conducted systematically and continuously.
When evaluating the strategic planning process, 5 questions should be answered:
- Is the strategy internally compatible with the capabilities of the organization?
- Does the strategy involve an acceptable degree of risk?
- Does the organization have sufficient resources to implement the strategy?
- Does the strategy consider external dangers or opportunities?
- Is this strategy the best way to use the firm's resources?
There are a number of criteria, both quantitative and qualitative, that are used in the evaluation process.
Quantitative evaluation criteria:
- market share
- sales growth
- level of costs and production efficiency
- level of costs and sales efficiency
- staff turnover
- absenteeism
- employee satisfaction
- net profit
- securities payments
- share price
- dividend rate
- earnings per share
Qualitative evaluation criteria:
- ability to attract highly qualified managers
- expansion of services to clients
- in-depth market knowledge
- hazard reduction
- use of opportunities
After choosing a strategy for developing a follow-up plan, management should conduct a thorough review of the organization's structure to determine if it contributes to the achievement of corporate goals. The strategy defines the structure. Conceptually, structures should always reflect strategy.
the best organizational structure there will be one that matches the size, dynamism, complexity, and composition of the organization. As organizations evolve and their goals evolve, their strategies and plans change. This should happen to their structures as well.
1. The concept and classification of planning ____________________________ 3
2. Stages of strategic planning ______________________________ 5
3. Functions and purpose of strategic planning ________________ 8
conclusions ______________________________________________________17
List of used literature ______________________________18
1. The concept and classification of planning
Planning is one of the economic methods of management, the main means of using economic laws in the process of managing and preparing a management decision. It focuses on past experience, but seeks to define and control the development of the organization in the future. An important aspect of planning is reliability of initial data.
Planning is the systematic preparation of decision-making about ends, means and actions, through purposeful comparative evaluation of various alternative actions under expected conditions.
It should be borne in mind that planning is always carried out on the basis of an incomplete amount of information.
Planning is carried out in 4 stages:
development of common goals of the organization;
specification and specification of goals for a certain stage of the development of the organization;
determination of ways, economic and other means of achieving these goals;
control over the achievement of goals.
Distinguish current, prospective and strategic planning.
Planning classification
By degree of coverage distinguish: general and private planning.
Subject: target, means planning, program planning and action planning.
By areas of operation: production planning, sales planning, financial planning, personnel planning, advanced general planning.
Depth of planning: global, contour, detailed.
By deadline: short-term (up to 1 year), medium-term (up to 5 years), long-term (over 5 years), forecasting.
By management structure: general planning of the enterprise, planning of the location of the enterprise, planning of areas of activity, planning of the work of a division of the enterprise.
Change plans if possible: rigid, flexible planning.
Planning methods:
progressive (bottom up);
regressive (retrograde) (from top to bottom);
counter planning (circular).
According to the planning technique:
sequential;
parallel;
sliding.
Criteria for evaluating the effectiveness of planning:
completeness of planning;
planning accuracy;
planning continuity;
elasticity of planning;
economy of planning;
the ability to control the implementation of plans;
the ability to quickly adjust plans.
Planning phases:
development of global goals of the organization;
development of local goals;
problem analysis;
analysis of the internal and external environment of the organization;
search for alternatives;
forecasting;
evaluation, determination of the best alternative;
making a decision, setting a plan target;
plan development.
2. Stages of strategic planning
Strategic planning is the management process of creating and maintaining a strategic correspondence between the mission and goals of the company, its potentialities on the one hand and the needs of consumers, changes in the external environment on the other.
The subject of strategic planning- the process of creating and maintaining a strategic correspondence between the mission and goals of the company on the one hand and changes in the external environment.
Strategic planning is the process of formulating a strategy in stages, with an explanation of the role of each member of the organization (each unit). It is necessary to distinguish strategic management(management by results) and strategic planning (management by plans).
Main stages of strategic planning are (Fig. 1):
Choosing the mission of the organization;
Determination of the goals of the organization;
Assessment and analysis of the external environment;
Management survey of strengths and weaknesses;
Analysis of strategic alternatives;
Choice of strategy.
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Choice missions |
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Goal setting |
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long-term |
medium-term |
short-term |
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Development of supporting plans (instructions for making decisions and actions) |
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Politics |
Strategies |
Procedures |
Rules |
Budgets |
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Rice. 1. Sequence of strategic planning
Strategic planning gives a purely financial benefit, increases the prestige and image of the company.
Along with financial benefits, strategic planning provides intangible benefit and here it should be mentioned five directions:
1. Strategic planning contributes to the prevention of conflicts in the team. Due to the use of a special way to encourage subordinates - involving them in the process of formulating a strategy - the manager has the opportunity to foresee various kinds of difficulties in the future and find ways to eliminate them.
2. The decision made by the group is more likely to survive because it takes into account a number of alternatives. The interaction of the group allows you to develop the largest number of possible ways to solve the problem under discussion. The search for acceptable options and the final choice of strategy is actually the most optimal, since it takes into account expert opinions specialists who were directly involved in the development of this strategy.
3. The motivation of employees increases in connection with their involvement in the development of a strategic plan. Any subordinate with great understanding will treat the orders of the head if he knows their background and reasons, and by taking a direct part in the formation of production tasks, he gets access to information about where this or that order comes from. Thus, employees become personally connected with the plans that they themselves develop.
4. The strategic plan clearly defines the responsibility of everyone. Problems and inconsistencies in the coordination of actions between individuals and the group are reduced as a result of the application of the participatory system.
5. Reduced resistance to change. One of the most basic reasons for employees' resistance to innovations is their uncertainty about the impact of the consequences of these innovations directly on themselves. One of the most important tasks of strategic planning is to reduce uncertainty about the consequences of making certain decisions.
The formulation of a strategic plan is a thorough preparation for the future activities of the organization. In this case, the following sequence of analysis of the functions and purpose of strategic planning as a whole can be proposed.
3. Functions and purpose of strategic planning
The strategic planning (SP) functions are implemented through the stages of the SP. Let's take a quick look main stages of strategic planning.
Choice and formulation of the mission. The main common goal of any organization is a clearly expressed reason for its existence. The characteristic of the value of the company for society is designated as its mission. It details the status of the firm and provides direction and benchmarks for setting goals and strategies at various organizational levels. The mission of the organization should include:
The firm's mission in terms of providing core services or products, markets, and technologies.
The external environment, which is determined by the working principles of the firm.
Organization culture. What type of work climate exists within the organization, what kind of people does it attract?
According to F. Kotler, the mission should be formulated taking into account the following factors:
organization history;
style of behavior and mode of action;
the state of the environment and habitat of the organization;
available resources;
distinctive features of the organization.
Mission formation technology includes the disclosure of the following characteristics of the organization:
targets;
organization philosophy;
areas of activity;
possible ways of functioning of the organization.
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INTRODUCTION
Strategic planning is one of the functions of management, which is the process of choosing the goals of the organization and ways to achieve them. Strategic planning provides the basis for all management decisions, the functions of organization, motivation and control are focused on the development of strategic plans. A dynamic strategic planning process is the umbrella under which all managerial functions are sheltered, without taking advantage of strategic planning, organizations as a whole and individuals will be deprived of a clear way to assess purpose and direction. corporate enterprise. The strategic planning process provides the framework for managing the members of an organization. Projecting everything written above on the realities of the situation in our country, it can be noted that strategic planning is becoming more and more relevant for Russian enterprises that enter into fierce competition both among themselves and with foreign corporations.
STRATEGIC PLANNING AS A MEANS OF ACHIEVING THE GOAL.
Strategic planning is a set of actions and decisions taken by management that lead to the development of specific strategies designed to help the organization achieve its goals. The strategic planning process is a tool that helps in making managerial decisions. Its task is to provide innovations and changes in the organization to a sufficient extent. There are four main types of management activities within the strategic planning process:
Resource allocation
Adaptation to the external environment
Internal coordination
Organizational strategic foresight
Resource allocation.
This process involves the allocation of limited organizational resources such as funds, scarce managerial talent and technological expertise. For example, in 1994, the Moscow Cellular Communications company decided to reorganize its structure somewhat, namely, the fixed-line service cellular communication, which has grown from an additional to one of the main services, the MCC department of the firm "Tarkop" began to deal with. This decision made it possible to somewhat reduce the staff of the MCC, which, of course, reduced costs, and at the same time fully represent the fixed cellular service on the market, because the Farkop company was founded as a result of the distribution of organizational resources and fully met the necessary requirements (First of all qualified personnel and technological experience).
Adaptation to the external environment
Adaptation covers all actions of a strategic nature that improve the relationship of the enterprise with its environment. Enterprises need to adapt to both external opportunities and hazards, identify appropriate options, and ensure that strategy is effectively adapted to the environment. As an example, consider the activities of a Russian manufacturer computer technology Stins Comman. About three years ago, this company entered the computer market, namely the segment represented by powerful workstations. At the dawn of its activity, this company was unable to compete in this market segment with more experienced Russian and Western companies, therefore, not seeing any special prospects, the company's management decided to sharply develop a new market niche - a home computer (HomePC & Half Office), which is based was a low price, the presence of a variety of basic configurations, equipping with promising peripherals, additional technical and, above all, software services (namely, the fact that Amata computers were one of the few that were equipped with a whole package of training rather rare programs). That is, in this case, we see that the company has successfully adapted to the conditions of the external environment, namely, it moved in time from an unpromising segment to a more promising one.
Internal coordination
Includes the coordination of strategic activities to display the strengths and weaknesses of the enterprise in order to achieve effective integration of internal operations. Ensuring effective internal operations in the enterprise is an integral part of management activities.
Awareness of organizational strategies
This activity involves the implementation of a systematic development of the thinking of managers by forming an enterprise organization that can learn from past strategic decisions. The ability to learn from experience enables an enterprise to correctly adjust its strategic direction and increase professionalism in the field of strategic management. The role of the senior manager is more than simply initiating the strategic planning process, it is also involved in implementing, integrating and evaluating this process.
The model of the strategic planning process is shown in Figure 1.
ESSENCE OF STRATEGY
Word "strategy" derived from the Greek strategos,"the art of the general." The military origin of the term should come as no surprise. Exactly strategos allowed Alexander the Great to conquer the world.
The strategy is a detailed comprehensive plan designed to ensure the implementation of the organization's mission and achievement of its goals.
Several key messages related to strategy need to be understood and, more importantly, accepted by top management. First of all, the strategy is mostly formulated and developed by top management, but its implementation involves the participation of all levels of management. The strategic plan must be supported by extensive research and evidence. To compete effectively in today's business world, an enterprise must constantly collect and analyze huge amount information about the industry, competition and other factors.
The strategic plan gives the enterprise certainty, individuality, which allows it to attract certain types of workers, and, at the same time, not to attract other types of workers. This plan opens the door for an enterprise that directs its employees, attracts new employees, and helps sell products or services.
Finally, strategic plans must be designed not only to remain consistent over long periods of time, but also to be flexible enough to be modified and refocused as needed. The overall strategic plan should be seen as a program that guides the activities of the firm over an extended period of time, recognizing that the conflicting and constantly changing business and social environment makes constant adjustments inevitable.
OBJECTIVES OF THE ORGANIZATION (ENTERPRISE)
The first and perhaps the most significant decision in planning will be the choice of enterprise goals. It must be emphasized here that those enterprises that, due to their size, have a need for multi-level systems, also need several broadly formulated goals, as well as more specific goals related to the overall goals of the organization.
Enterprise Mission
The main overall goal of the enterprise - a clearly expressed reason for its existence - is designated as its mission. Goals are developed to carry out this mission.
The mission details the status of the enterprise and provides direction and benchmarks for setting goals and strategies at various organizational levels. The company's mission statement should include the following:
1. The task of the enterprise in terms of its main services or products, its main markets and main technologies
2. External environment in relation to the firm, which determines the working principles of the enterprise
3. Culture of the organization. What type of working climate exists within the enterprise?
Mission selection
Some leaders never care about choosing and defining the mission of their organization. Often this mission seems obvious to them. If you ask the typical small business owner what their mission is, the answer is likely to be: "Of course, to make a profit." But if you think carefully about this issue, then, the inconsistency of choosing profit as a common mission becomes clear, although, undoubtedly, it is an essential goal.
Profit is a completely internal problem of the enterprise. Because an organization is an open system, it can only ultimately survive if it satisfies some need outside of itself. To earn the profit it needs to survive, a firm must pay attention to the environment in which it operates. Therefore, it is in environment management seeks the overall purpose of the organization. The need for mission choice was recognized by prominent leaders long before the development of systems theory. Henry Ford, a leader with a deep understanding of profit, defined Ford's mission as providing people with cheap transportation.
The choice of such a narrow mission of the organization as profit limits the ability of management to explore acceptable alternatives when making a decision. As a result key factors may not be considered and subsequent decisions could lead to a low level of organizational performance.
Target characteristics
General production goals are formulated and set on the basis of the overall mission of the enterprise and certain values and goals that top management is guided by. To make a true contribution to the success of an enterprise, goals must have a number of characteristics:
Specific and measurable goals
Orientation of goals in time
Achievable Goals
ASSESSMENT AND ANALYSIS OF THE EXTERNAL ENVIRONMENT
After establishing its mission and goals, management should begin the diagnostic phase of the strategic planning process. The first step is to study the external environment. Managers evaluate the external environment according to three parameters:
1. Evaluate changes that affect different aspects of the current strategy
2. Determine what factors pose a threat to the current strategy of the firm.
3. Determine which factors provide more opportunities to achieve company-wide goals by adjusting the plan.
Environmental analysis is the process by which strategic planners control factors external to the enterprise in order to identify opportunities and threats for the firm. Analysis of the external environment helps to obtain important results. It gives the organization time to anticipate opportunities, time to plan for possible threats, and time to develop strategies that can turn past threats into any profitable opportunity.
In terms of assessing these threats and opportunities, the role of environmental analysis in the strategic planning process is essentially to answer three specific questions:
1. Where is the business located now?
2.Where, according to senior management, should the enterprise be located in the future?
3. What should management do to move the enterprise from the position it is in now to the position where management wants it to be?
Threats and opportunities faced by an enterprise can usually be divided into seven areas (Figure 2).
MANAGEMENT SURVEY OF INTERNAL STRENGTHS AND WEAKNESSES OF THE ENTERPRISE
The next problem that management faces will be to determine whether the enterprise has internal forces. The process by which a diagnosis of internal problems is made is called a management survey.
Management survey is a methodical assessment of the functional areas of the enterprise, designed to identify its strengths and weaknesses.
Marketing.
When examining the marketing function, there are seven general areas for analysis and research that deserve attention:
1. Market share and competitiveness
2. Variety and quality of product range
3. Market demographic statistics
4. Market research and development
5. Pre-sales and after-sales customer service
7. Profits
Finance / Accounting
An analysis of the financial condition can benefit the organization and help improve the effectiveness of the strategic planning process. A detailed analysis of the financial condition can reveal existing and potential internal weaknesses in the organization, as well as the relative position of the organization in comparison with its competitors. The study financial activities can open to management areas of internal strengths and weaknesses in the long term.
Operations
Critical to the long-term survival of an enterprise is continuous review of operations management. Here are some key questions that need to be answered in a survey of the strengths and weaknesses of the operations management function.
1. Can we produce our goods or services at a lower cost than our competitors? If not, why not?
2. What access do we have to new materials? Do we depend on a single supplier or a limited number of suppliers?
3. Is our equipment modern and well maintained?
4. Are purchases designed to reduce inventory and lead times? Are there adequate controls on inputs and outputs?
5. Are our products subject to seasonal fluctuations in demand, which forces us to resort to temporary dismissal of employees? If so, how can this situation be corrected?
6. Can we serve markets that our competitors cannot serve?
7. Do we have an effective and efficient quality control system?
8. How effectively did we plan and design the production process? Can it be improved?
Human resources
The root of most problems in organizations can ultimately be found in people. If an organization has qualified employees and leaders with well-motivated goals, it is able to follow various alternative strategies. Otherwise, improvements should be sought because the weakness is most likely to jeopardize the organization's future performance.
Culture and image of the enterprise
The culture and image of an enterprise is reinforced or weakened by the company's reputation. Does the firm have a good reputation for achieving its goals? Was she consistent in her activities? How does this enterprise compare to others in the industry?
EXPLORING STRATEGIC ALTERNATIVES
The enterprise has four strategic alternatives - limited growth, growth, reduction, and a combination of these options.
Limited growth.
The strategic alternative followed by most organizations is limited growth. A limited growth strategy is characterized by setting goals from what has been achieved, adjusted for inflation. The limited growth strategy is applied in mature industries with static technology, when the organization as a whole is satisfied with its position.
Growth
The growth strategy is implemented by annually significantly increasing the level of short-term and long-term goals above the level of the previous year's indicators. The growth strategy is applied in dynamically developing industries with rapidly changing technologies.
Reduction
The alternative least often chosen by executives and often referred to as the strategy of last resort is the reduction strategy. Within the reduction alternative, there may be several options:
1. Liquidation
2. Cutting off the excess
3. Reduction and reorientation
Combination
Strategies for combining all alternatives are likely to be pursued by large firms active in several industries. A combination strategy is a combination of any of the three strategies mentioned.
The strategic choices made by managers are influenced by a variety of factors. Here is some of them:
2. Knowledge of past strategies
3. Reaction to owners
4. Time factor
STRATEGIC PLANNING AND ENTERPRISE SUCCESS
Some organizations and businesses can achieve a certain level of success without much formal planning. Moreover, strategic planning alone does not ensure success. However, formal planning can create a number of important and often significant enabling factors for the organization.
The current pace of change and increase in knowledge is so great that strategic planning seems to be the only way to formally predict future problems and opportunities. It provides senior management with the means to create a long-term plan. Strategic planning also provides a basis for decision making. Knowing what an organization wants to achieve helps clarify the most appropriate course of action. Formal planning helps reduce risk in decision making. Taking reasonable and systematic planned decisions, management reduces the risk of making the wrong decision due to erroneous or unreliable information about the capabilities of the enterprise or about the external situation. Planning, in so far as it serves to formulate established goals, helps to create a unity of common purpose within the organization. In industry today, strategic planning is becoming the rule rather than the exception.
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