Business Decisions and Strategic Planning
It is an imperative step for an organization that wishes to succeed in the contemporary business environment to make decisions with a meticulous planning. However, organizations rarely plan well before making important decisions. While decisions like those relating to financial management, investment both present and future, staffing and production are so critical to the success of the business, the decision makers will realize that a number of benefits accrue to them should they plan well before executing these decisions.
One benefit of planning is that it becomes easier for the decision makers to establish independent goals. This allows the organization to set its vision aside from the surrounding events. This means that decisions are arrived at through undeviating series of choices. Secondly, planning gives a standard with which achievement can be measured. This allows the organization to establish or know if the resources are all put towards the set standards. Planning also makes it possible for values to be converted into action. Thus consultation is very important in determining the best alternative out of a number of options.
Lastly, planning allows for efficient and effective utilization of the resources like human resources and materials (Zammuto 1982). The best use of budgets, manpower, time as well as effort is only possible when their use is governed by a proficient plan. Making decisions and strategic planning therefore require that the decision makers in the organization carry out thorough consultation before deciding to steer the organization in a particular direction. This paper endeavors to critically examine the process of decision making in an organization with a discussion of strategic planning and the problems.
The paper also attempts to offer solutions to these problems which face strategic planning (Zammuto 1982). Discussion Strategic Planning and Strategy This is the process by which an organization defines its policy or strategy, describes its direction and then makes decisions which are geared towards allocating the limited resources appropriately hence put them to their optimum use in pursuing the set strategy. Through the process of strategic planning all the members of the group are set to work toward the same goal. Strategic planning as a tool used in management entails employment of various techniques to achieve its purpose.
The challenges of operation a business in today’s rapidly changing environment poses a challenge that would call for regular review, assessment and adjustment of the direction in which the business sails (Shortall 1997). Laying down a strategy and strategic planning therefore will entails the use of SWOT analysis (now frequently referred to as SWOC analysis where Threats are replaced with Challenges though Strengths, Weaknesses and Opportunities remain the parameters against which the direction of the business is set).
Another technique used in strategic planning is the PEST analysis where the decision makers not only want to scrutinize the political environment of the business but also the economic, social as well as carry out the technological analysis. Yet still, the decision makers may find it worth to analyze the Socio-cultural environment, look at the Technological factors, the Economic factors, Ecological factors and the Regulatory factors. They therefore carry out a STEER analysis. All these techniques share an important assumption that the only key to success of the business is making of judicious decisions.