Strategic Business Planning and Decision-Making

Posted on Dec 14, 2024 in Other subjects

Item 2: Planning Elements

Planning is a reflective activity for action. It attempts to bridge the current situation and a desired future state.

Mission or Purpose: Explains the basic purpose and identifies the role of the business in society.
Aims and Objectives: These are for specific purposes, explaining what the subject wants to achieve in a given time.
Strategies: A program of action that reflects a global concept designed for the operation of the organization.
Policies: These are guidelines that guide the manager in decision-making and often reflect the value system, managerial philosophy, and culture of an organization.
Procedures: A chronological sequence of actions necessary to operate with structured problems.
Rules: These instructions dictate whether or not a particular course of action should be taken.
Programs: A plan in which specific objectives are realized, including tasks, strategies, and policies.
Budget: An expression in monetary terms of a plan or program.

Stages of Planning

Awareness of the Problem: Perceiving the need to act in response to a problem, risk, threat, or opportunity.
Setting Objectives: Defining the situation the company wants to reach.
Analysis of Contingency: This necessitates a detailed study of the circumstances of both the external and internal environment.
Definition of Alternative Lines: To achieve any goal, there are usually several alternatives.
Evaluation: This involves analyzing the strengths and weaknesses of each alternative.
Implementation: Putting the plan into action to achieve the objectives.
Derived Plans: Providing the necessary resources in the required quantity and quality over time.
Budgeting: Translating plans into numerical terms.

Planning Dimensions

According to Time Extension: Long-term, Medium-term, Short-term.
According to the Affected Area of Activity: Global plans, Functional plans.
Characteristics of the Plans: Simplicity, Complexity, Quantitative, Qualitative, Strategic, Tactical, Public confidence.

Item 3: Concept and Typology of Foresight

The concept of prevention is closely related to planning.

Planning: Setting goals and developing means for their achievement.
Forecast: Predicting environmental events that may be relevant to achieving objectives. Forecasting becomes more complex with uncontrollable factors.

Typology: Commercial area, Production, Personnel, Financial.

Methods or Techniques of Forecasting:

Qualitative Methods: Focus on purchase intent, executive opinion, the Delphi method.
Quantitative Methods: Time series analysis and forecasting, sales in the last pilot area, moving averages.

Planning and Strategic Management

Item 4: Business Objectives

Concept: These include values, mission or purpose, targets, restraint, and responsibility.

Hierarchy of Objectives: Mission and purpose, Strategic objectives, Functional objectives, Individual objectives.

System of Multiple Targets

Tension and Conflict Between Objectives:

Three points can be made:

The existence of a single business objective: obtaining maximum profit.
The existence of multiple business objectives.
The relativity of objective formulations varies according to three factors: type of business, historical context, and power structure.

Setting Goals:

Maximum Benefit: Both short-term and long-term.
Growth and Market Power: Strengthening the company’s position in the market.
Stability and Adaptability in the Environment: This implies the need for the company to modify its conditions depending on the environment.
Social: Acting as a social agent and integrating into society as a whole.

Management by Objectives

A method that links organizational objectives to the personal development of managers and the company’s need to achieve profit maximization.

Benefits:

Improved communication and understanding of objectives.
Objectification when establishing criteria for management performance measures.
Improved individual work planning and global business planning.
Improved performance and increased motivation.
Improved coordination between departments.
More rigorous control of employees.

Disadvantages:

Failure to convey the philosophy of Management by Objectives.
Deficiencies in providing managers with rules for setting goals.
Difficulty setting nuanced targets.
Inflexibility.

Item 5: Stages of the Decision Process

Problem definition, Analysis of available information, Alternative solutions to the problem, Selection of the decision, Implementation of the selected alternative.

Item 6: Systems of Organization – Bureaucracy and Adhocracy

Bureaucracy: The system that best responds to the concept of a highly organized organization. Authority, responsibility, and tasks are set by default.

Types:

Machine Bureaucracy: Applies to organizations where the workflow is routine and operating methods are standard.
Professional Bureaucracy: Workflow is so complex that it requires qualified experts selected independently for task execution.

Adhocracy: An organizational system that is poorly mechanistic, and the degree of standardization is minimal, in contrast to bureaucracy. The coordination mechanism is mutual adaptation. The aim is to promote cooperation.