CHAPTER ONE AN OVERVIEW OF STRATEGIC MANAGEMENT

Contents

1. Definitions of Strategy and Strategy Mgt

2. Levels of Strategy (briefly)

3. Characteristics of Strategic decisions

4. Advantages and challenges of Strategic Management

5. Strategic Management Process Model Learning Objectives

Define strategy and strategic management;

Describe the different levels of strategy and their importance;

Discuss the nature and values of strategic management;

Explain the strategic management process Reflection

What does strategy mean?

How do you explain strategic management? Definition of Strategy

Strategy refers to the formulation of basic organizational missions, purposes and objectives; policies and program strategies; and the methods needed to ensure that strategies are implemented to achieve organizational ends. A more comprehensive definition of strategy (Quinn, 1980)

Strategy as a pattern or plan to integrate the organization’s major goals, policies, and action sequences into a cohesive whole

Strategy as a tool to organize and allocate an organization’s resources in a viable way based on its internal competencies and shortcomings, as well as anticipated changes in the environment

Note: • Goals/objectives state what is to be achieved and when results are to be accomplished, but they do not state how the results are to be achieved.

• Policies are rules or guidelines that express the limits within which action should occur. • Programs specify the step-by-step sequence of actions necessary to achieve major objectives within the limits set by the policy

• Strategic decisions are those that determine the overall direction of an enterprise and its ultimate viability in light of the predictable & unpredictable changes that may occur in its most important environment Summary:

• We observed that there are different definitions of strategy

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•These definitions interpret strategy as future plan that guides the scope & direction of the organization • It takes into account the environment in which the entity operates Definitions of Strategic Management Strategic Mgt is the process by which top mgt determines the long run direction and performance of the organization by ensuring that careful formulation , effective implementation, and continuous evaluation of strategy takes place. Strategic Mgt represents the management responsibility for defining the organization’s mission, formulating strategies, and guiding long-term organizational activities consistent with internal & external conditions. Definition Cont’d …

St. Mgt. is the decision that aligns the organization’s internal capability with the opportunities and threats it faces in its environment.

St. Mgt. is concerned with deciding on strategy & planning how that strategy is to be put into effect via: strategic analysis, strategic choice, & strategic implementation. According to Pearce II & Robinson St. Mgt. is defined as the set of decisions & actions that result the formulation & implementation of strategic plans designed to achieve organization’s objectives. Pearce II & Robinson Cont’d … It comprises nine critical tasks:

1. Formulate the organization’s mission, including broad statements about its purposes, philosophy, & goals;

2. Develop an organizational profile that reflects its internal conditions and capabilities;

3. Assess the organization’s external environment, including both the competitive & general contextual factors; Pearce II & Robinson Cont’d …

4. Analyze the organization’s options by matching its resources with the external environment;

5. Identify the most desirable options by evaluating each option in light of the organization’s mission;

6. Select a set of long-term objectives & grand strategies that will achieve the most desirable options;

7. Develop annual objectives & short-term strategies that are compatible with the selected set of long-term objectives & grand strategies; Pearce II & Robinson Cont’d …

8. Implement the strategic choices by means of budgeted resource allocations in which the matching of tasks, people, structures, technologies, & reward systems is emphasized;

9. Evaluate the success of the strategic process as an input decision making

. Summary: The various definitions show that the St. Mgt. is something that can be applicable to all organizations whether large or small, public or private, profit or non-profit making ones, It involves the planning, organizing, directing & controlling of organization’s strategy-related decisions & actions, It looks beyond day-to-day operating concerns so as to focus upon the entire organization’s long-term prospects and development, It forces an organization to define its philosophy (vision), mission, role & goals. Note: The responsibility of doing the above rests on different individuals depending upon the size

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& type of the organization Often it is the responsibility of an organization’s governing board or top management Reflection

What are levels of strategy?

How do you distinguish/ characterize different levels of strategy? Levels of Strategy Corporate Strategy Business 1 Business 2 Business 3 R & D Finance & Acct Marketing Production Source: Pearce II & Robinson, 1991: 6 Corporate strategy

It is also called portfolio-level strategy & primarily concerned with top management, chief executive or board level decisions for acquisitions, mergers, major expansions, & divestitures that add or reduce product line. Corporate strategy cont’d …

It identifies the businesses that the organizationis taking and should take, and attempts to determine the roles each business activity is playing and should play in the organization.

At this level; only the global objectives that are likely to be growth, stability or retrenchment (defense); & strategic orientation in order to achieve them are clearly defined. Business strategy

It is found in the middle of the decision making hierarchy and composed mainly of business & corporate managers

. It is concerned with a single strategic business unit (SUB) and how each business attempts to achieve its mission within its chosen area of activity. Business strategy cont’d …

Managers at this level translate the statements of direction and intent generated at the corporate level into concrete objectives & strategies for individual SUBs.

The strategy is directed towards identifying products that should be developed and offered to selected markets; and taking care of meeting the customer’s needs while achieving the objectives of the organization. Functional strategy

It is found at the bottom of the decision making hierarchy composed of mainly of managers of product, geographic and functional areas

. This strategy is implemented in order to support the business strategy by each functional area.

Functional level decisions are concerned with how to implement new technologies, develop new products, open new markets, expand new facilities, and institute new human resource programs.

The principal responsibility of functional-level managers is to implement the organization’s strategic plans

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CHARACTERISTICS OF STRATEGIC DECISIONS CORPORATE-LEVEL DECISION:

As we move from corporate to functional level strategies, the decisions become more detailed & specific

The decisions at corporate level tend to be more value oriented, conceptual, & less concrete

Corporate level decisions are characterized by greater risk, cost of risk, profit potential, greater need of flexibility & longer time horizons

Such decisions include the choice of businesses, dividend policies, sources of long-term financing, & priorities of growth CHARACTERISTICS Cont’d …

BUSINESS-LEVEL DECISION:

Helps to bridge decisions at corporate & functional levels

Common business level decisions include plant location, market segmentation, geographic coverage, & distribution channels

CHARACTERISTICS Cont’d … FUNCTIONAL-LEVEL DECISION:

Implement the overall strategy formulated at thcorporate & business levels

Involves action-oriented operational issues, relatively short range & low risk

Incurs modest costs because it depends on available resources

Critically analyzed because it is relatively concrete & quantifiable The Nature & Value of St. Mgt

Before WW II, the executive's responsibility was solely lilimited to management of activities internal to the organization

They would not respond to the challenges posed by the organization’s immediate & remote external environment

They didn’t use their ability to think, plan, & manage strategically while managing organizations (Pearce II & Robinson, 1991) The reasons were:

lack of assessing the consequences of long-term trends

Absence of clear goals

Poor or non-existent strategic planning process

Limited linkages b/n plans & actions

Absence of evaluation & feedback mechanisms The Nature & Value of St. Mgt

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However, any organization be it public or private, profit or non-profit making is required to make contributions to society

If it fails to serve the society as expected, it may disintegrate or fall into crisis. Examples: a textile factory, a university, ...

If the textile factory fails to provide customers with quality products with competent price,customers buy them somewhere else.

If a university no longer offers sound academic programs, students will transfer to other universities or colleges. The Nature & Value of St. Mgt

In general, when an organization is not in a position to provide beneficial services or products to its stakeholders, society perceives little need for its existence.

This can be overcome by St. Mgt. as it is primarily concerned how organizations intentionally and systematically make decisions about products, services, customers, and human resources vital both to themselves and to society at large (Holt, 1993).

Knowing this fact, since WW II, executives have been using St. Mgt. for the planning & implementation of programs & policies. The Nature & Value of St. Mgt

Particularly, important improvement in management process came in 1970s, when “long-range planning, new venture mgt., planning, programming, & business policy were blended” (Pearce II & Robinson, 1991: 2)

In general, modern managers must respond to the challenges posed by the organization’s immediate & external environment

Immediate & external environment of organizations, which must be anticipated, monitored, assessed, & incorporated into the executive’s decision making such as:

The Nature & Value of St. Mgt

Competitors

Suppliers

Increasingly scarce resources

Government agencies & their ever more regulations

Customers whose preferences often shift inexplicably

Economic & social conditions

Political priorities

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Technology Reflection

What are the benefits as well as challenges of Strategic Management? Advantages & Challenges of St. Mgt Advantages:

Prevent or mitigate the effects of risks

Helps the managers to discharge their responsibilities since they know what is expected of them

Encourages & permits to evaluate alternative courses of action

It reveals & clarifies the SWOT analysis Advantages Cont’d …

It provides an overall framework for decision making & resource allocation effectively

Serves as a means of communicating objectives, strategies, & detailed operating plans

It helps managers' master change

It develops attitudes, perspectives, ways of thinking, decision-making habits, & planning philosophy that will produce better decisions Advantages Cont’d …

It provides a basis for measuring qualitative performance – creativity, innovation, imagination, motivation

It keeps the org. invariably tied with its customers & stakeholders and provide relevant service to the society it stands for

It makes the organization a learning-organization whereby others consider it as a model to be followed Constraints/ Challenges

The difficulties of forecasting the uncertain future accurately

The complexity of the environment to be forecasted and the complex relations involved between environmental variables

The limitations of the data available & the distrust of mgt. techniques applied such as forecasting, modeling, cost analysis & operational research Constraints Cont’d …

The costly endeavor of the St. mgt process that entails the use of specialists, taking up mgt. time, requiring the support of many individuals and even other orgs.

The rapidity and novelty of environmental change (the main leading forces of change are globalization, resource scarcity, & technological revolution).

Hence, the survival & success of organizations can be guaranteed with new creativity & innovation

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Generally, St. mgt. helps to systematically analyze pivotal long-term trends & issues and to analyze the institution’s capacity to respond to those trends.

When carried out imaginatively & conducted in the right atmosphere of communication, participation, & cooperation; on a logical, deliberate, & analytical basis, it helps to achieve organizational success.

It works best when adequate time, energy, and resources are directed into it The framework for St. Mgt. Involves a nine-step process:

1. Creating a vision for the organization

2. Outlining the missions & legal mandates that define the organization

3. Examining internal factors that influence its performance

4. Examining external factors that influence its performance CONT’D …

5. Examining the trends & potential futures of the organization

6. Setting goals for improving organizational performance over a specified period

7. Designing a strategic plan for reaching the goals set

8. Implementing or operationalizing the strategic plan

9. Evaluating both ongoing activities & the final outcomes

Analysis of Strategic Management Process

Vision

Mission/Mandate

Internal Analysis

Eternal Analysis

Trend Analysis

Goal Setting based on Vision

Strategic Planning

Implementation / Operational Mgt

Evaluation CHAPTER TWO BASIC COMPONENTS OF THE STRATEGIC MANAGEMENT Basic Components of St. Mgt 46 Contents

Creating a Vision

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Outlining the Mission

Values, and strategic issues

Setting Goals and Objectives

Strategic plan 47 Basic Components of St. Mgt Learning objectives

Define vision, mission, goals, and objectives;

Able to develop vision and mission statements;

Discuss the nature and importance of vision and mission;

Describe values and strategic issues

Able to set goals and objectives 48 Basic Components of St. Mgt Reflection

What do you understand by the term “vision”?

What do you understand by the term “mission”?

How are they different? 49 Basic Components of St. Mgt Creating a Vision

The strategic mgt effort begins with creation of organizational vision (mental journey).

Managers should envision where the org. should be headed in the long run & understand how it might get there.

In general, the corporate vision can be defined considering internal & external changes 50 Basic Components of St. Mgt Group Exercise 1 • Envision an article written in the future about you or your organization. • Imagine yourself receiving an award for a major accomplishment. • What is the award? • What has been accomplished? 51 Basic Components of St. Mgt Vision cont’d …

In defining a vision, the management must pose a question “What business are we in?”

In this respect, the firm’s size, scope, the products /services it provides & the markets it serves should be considered

This is simply for the purpose of identifying the gap between what is and what will be the firm.

Usually, in defining a vision, what the company wants to be & the timeframe to achieve it are stated. 52 Basic Components of St. Mgt Example of Vision Statement Addis Ababa City Government 2025 Vision “In 2025, Addis Ababa will be world class city, a green, clean and livable city; with vibrant economy and residents all living above poverty line, hub of conference tourism and national bench-mark of good governance.” 53 Basic Components of St. Mgt Example cont’d …

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ETC’sVision:

• is to see the entire country connected with state-of-theart ICT infrastructure that provides highly qualitative, reliable and secure communication services at affordable prices.

• ETC shall be an internationally recognized agile, strong and vibrant world class ICT infrastructure and service provider. 54 Basic Components of St. Mgt Example cont’d …

By the year 2010, we will be the most profitable airline in Africa

We want to be the most successful airline in Africa

To achieve market leadership by 2010 as a world class African Airline 55 Basic Components of St. Mgt Group Exercise 2

Drafting a Vision Statement

Imagine five years in to the future:

What kind of organization do you want to become?

What will your organization look like in five years? 56 Basic Components of St. Mgt Effective leadership and vision

Effective leadership and vision are closely related:

Thus, leaders must be forward looking & clarify the direction in which the org. to move.

Managers who do not develop into strong leaders do not develop a clear vision-instead, they focus on routine tasks. 57 Basic Components of St. Mgt Effective leadership and vision cont’d … In general, visionary leaders:

Have thoughts that others do not have

Are extraordinary-no focus on routine activities

Are forward looking and clarify the direction in which they want their organization move

Are exemplary in order to employees embrace the vision

Ensure the success of the vision based ostrengths

Develop further the corporate vision considering internal & external changes etc. 58 Basic Components of St. Mgt Vision cont’d … Though vision is important it can fail:

If it reflects merely the leaders internal needs

If internal & external factors are not analyzed well

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Due to lack of acceptance by the market & by those who implement it

Ignores stakeholders needs

Miscalculates the resources needed and available to achieve it 59 Basic Components of St. Mgt Vision cont’d … Vision has two-fold purpose:

It requires people to think beyond the known, & provides the context for judging the future success of the org.

It helps the org. members become initiated for change & consider it as an opportunity for improving their performance. 60 Basic Components of St. Mgt The Mission & Legal Mandates

Mission is defined as “the fundamental purpose of the organization & its scope of operation.”

Organization mission is written in terms of the general set of products & services the organization provides & the markets & clients it serves. 61 Basic Components of St. Mgt Mission cont’d …

Clear mission statement, in addition to legislation, serves to define the mandates (the context within which the organization operates).

Operative mandates are subject to continuous alteration & expansion. 62 Basic Components of St. Mgt Formulating the Mission Your organization’s mission statement is a concise introduction to its work. It describes an organization in terms of its:

Purpose: what the organization seeks to accomplish (WHY DOWE EXIST?)

Target Audience: the target group or beneficiaries of the organization’s work (WHO DOWE SERVE?) 63 Basic Components of St. Mgt Formulating the Mission (Cont’d…)

Business: the main method or activity through which the organization tries to fulfill this purpose (WHAT SERVICES DO WE PROVIDE and HOW DO WE GO ABOUT PROVIDING THEM?)

A mission is subject to continuous alteration & expansion. 64 Basic Components of St. Mgt Formulating the Mission (Cont’d…) Points of emphasis when articulating mandates & missions:

Awareness of legal constraints & responsibilities of all persons of an organization

Definition of stakeholders any group of individuals who are affected by or can affect the future of the organization.

It should be recognized that the vision statement already defined is embedded in the mission and mandate and also define the structure and the general role of the organization. 65 Basic Components of St. Mgt Mission cont’d … Mission serves several functions:

Ensures unanimity of purpose

Provides a basis for motivation

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Allocates organization’s resources

Establishes the necessary organizational climate

Serves as a basis for those who can identify with the organization

Facilitates the translation of objectives & goals 66 Basic Components of St. Mgt Mission cont’d …

As the organization grows or is forced by competitive pressures to alter its product/market/technology, redefining the org mission may be necessary. The revised mission should also state:

The basic type of product or service to be offered,

The primary markets or customers to be served, and the technology to be used

The firm’s fundamental survival, growth, and profitability

The firm’s managerial philosophy

The public image the firm seeks 67 Basic Components of St. Mgt Group Exercise 3 Drafting a Mission Statement Consider the following questions and draft a mission statement of your organization.

Why do we exist?

Who do we serve?

What services do we provide?

How do we go about providing them? 68 Basic Components of St. Mgt Revising a mission If you already have a mission statement in your organization you can review it by asking the following questions.

Is it relevant as when the statement was written?

Are there items that ought to be added?

Does the statement address the points suggested for inclusion in a mission statement?

Does the statement effectively describe the unit to those who work within it as well as to those external to it? 69 Basic Components of St. Mgt Example Mission Statement

TheAddis Ababa City Government mission statement: “The core mission of the city government is to ensure welfare, safety & security of the Addis Ababa city residents, through improved serviced delivery and good governance” 70 Basic Components of St. Mgt Example cont’d … CBE’s Mission • Our mission is to profitably play a major role in the financial service cost-effectively for all sectors of the economy and thereby support the long term development of the nation. 71 Basic Components of St. Mgt Vision Vs Mission Vision:

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An image of the future we seek to create.

A vision statement describes where an organization/a region wants to see itself in the future; in the next 10 or 20 years if everything goes as hoped.

Mission = purpose, reason for being, the role of the organization in the society. 72 Basic Components of St. Mgt Vision Vs Mission Example

Mahatma Gandhi had a simple vision of getting rid of British rule in India and establishing a vibrant democracy in India.

He had a specific image of post British India in his mind and he talked of that image at every opportunity and to every one. 73 Basic Components of St. Mgt Vision Vs Mission Example (Cont’d…)

Their mission statement was not to use any violence and to love even the enemy.

He and his followers defeated British without using any weapons.

Nelson Mandela used the same tactics in South Africa later. 74 Basic Components of St. Mgt Values

Every organization should be guided by a set of values.

Values are beliefs which your organization's members hold in common and endeavor to put into practice.

The values guide your organization's members in performing their work. Specifically, you should ask, "What are the basic beliefs that we share as an organization?" 75 Basic Components of St. Mgt Values (Contd…) Values are often rooted in ethical themes, such as honesty, trust, integrity, respect, fairness, etc. Values should be applicable across the entire organization Values may be appropriate for certain best management practices – best in terms of quality, exceptional customer service, etc. 76 Basic Components of St. Mgt Values (Cont’d…)

Examples of values include: a commitment to excellent services, innovation, diversity, creativity, honesty, integrity, and so on.

By developing a written statement of the values of the organization, group members have a chance to contribute to the articulation of these values, as well as to evaluate how well their personal values and motivation match those of the organization. 77 Basic Components of St. Mgt Examples of Values

We obey the law and do not compromise moral or ethical principles – ever!

We are committed to forging public and private partnerships that combine diverse strengths, skills and resources.

We treat everyone with respect and appreciate individual differences. 78 Basic Components of St. Mgt Group Exercise 4 Organizational Values/guiding principles

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Think of about the vision and mission statement you have developed before and work on the following question.

What are the values implicit in your vision and mission statement that should guide your work if you are to make a contribution to your vision and mission? 79 Basic Components of St. Mgt Identifying critical /Strategic Issues

Identifying strategic issues is the heart of the strategic planning process

. A strategic issue is: A Fundamental policy questions/critical challenges that affect: mission, values, level or mix of services, clients, donors, cost, financing, structure or management.

Strategic issues are issues which if not addressed will severely handicap the organization’s/regional government’s ability to function effectively. 80 Basic Components of St. Mgt Identifying critical /Strategic Issues (Contd...)

Strategic issues are fundamental policy or program concerns that define the most important situations and choices your organization/regional government faces now and in the future. 81 Basic Components of St. Mgt Identifying critical /Strategic Issues (Contd...)

Critical issues can reflect long-standing problems in the region, the community served or recent events that are anticipated to have a significant impact on the region and/or community served.

Generally these are issues that cannot be resolved through a “quick fix”. The selection of issues is important because it determines the range of decisions and strategies we will consider in the future. 82 Basic Components of St. Mgt Identifying critical /Strategic Issues (Cont’d...)

Critical issues can reflect:

Long standing problems in the organization/region, members served or recent events which are anticipated to have a significant impact on the regional government and/or people served.

Impediments that must be overcome in order for the organization/regional government to meet its goals-i.e., problems to be solved; or,

Watersheds/major shifts in thinking that can change the direction of an organization/regional government or the nature of its environment and challenge business as usual. 83 Basic Components of St. Mgt How to Identify Strategic Issues

In some instances, an organization is already aware of the critical issues that the strategic planning process must help it address.

In most situations, the planning team discern critical issues as they work on external, market and internal assessments.

Identified by reviewing the SWOT analysis and determining the factors which are crucial in their success. 6-8most important issues:

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Which have the biggest impact

Which are the most immediate

Which are closest to the shared values 84 Basic Components of St. Mgt Examples of Strategic Issues Examples of critical issues from an affordable housing development organization:

What should the balance be between the Affordable Housing Enterprise's role as an independent developer versus a provider of technical assistance on housing development?

How should the Affordable Housing Enterprise diversify its revenue base?

Should the Affordable Housing Enterprise expand its advocacy and education roles in support of affordable housing?

How can we forge strategic alliances with the private sector to advance theAffordable Housing Enterprise’s mission? 85 Basic Components of St. Mgt Group Exercise 5 Strategic Issue Identification

In group try to identify strategic issues that you think can affect the overall operation of your organization. 86 Basic Components of St. Mgt Benefits of strategic issues identification

Enables focusing attention on important issue,

Attention is focused on issues not answers (there are several instances where serious conflicts arise over solutions to problems that have not been clearly defined)

Provides useful clues about how to resolve them,

Enables to see the consequences of not meeting them. 87 Basic Components of St. Mgt Reflection

What do you think is the difference between Strategic goals and objectives? 88 Basic Components of St. Mgt Strategic Goals and Objectives What are Strategic Goals?

Strategic goals are statements of what you wish to achieve over the period of the strategic plan (e.g. over the next year, five years, ten years.) 89 Basic Components of St. Mgt Strategic Goals and Objectives They reflect the analysis you do that starts with creating a vision, a role statement and a mission statement, and then your analysis of your environment, strengths, weaknesses, opportunities and threats. 90 Basic Components of St. Mgt What are Objectives and Are They Different from Strategic Goals

Objectives are usually specific statements (they are actually a particular kind of goal) that contribute to the achievement of "bigger" goals. In other words they are actually goals, but they are more specific. 91 Basic Components of St. Mgt What are Objectives and Are They Different from Strategic Goals? (Cont’d…)

Another term for objectives within a strategic planning framework is to call these "enabling goals", since, if you hit all your objectives, they will contribute to the achievement of the larger strategic goal(s),

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they enable. 92 Basic Components of St. Mgt What Should Strategic Goals Reflect In Terms Of Strategic Planning?

Your strategic goals, as part of the strategic planning process MUST reflect the analyses you use in the strategic planning process (otherwise all that work is wasted). Your strategic goals should: • reflect the general themes of your vision, role and mission • reflect the business realities outside of your company (as identified in your environmental scan) 93 Basic Components of St. Mgt What Should Strategic Goals Reflect In Terms Of Strategic Planning? (Cont’d…)

Reflect the business and capabilities internal to your organization/regional government (also as identified in your environmental/internal scan)

Reflect your strengths, weaknesses, and opportunities and strengths you've identified in your SWOT analysis. 94 Basic Components of St. Mgt What Should Strategic Goals Reflect In Terms Of Strategic Planning? (Cont’d…)

Remember that you want your entire organization to be aligned, or aimed at the achievement of your strategic goals, and for this to happen your strategic goals need to be aligned with (or consistent with and supporting of) all the other parts of your strategic plan. 95 Basic Components of St. Mgt Group Exercise 6 Drafting your Goals

What do you want to accomplish in the next 5 years, given the available resources, vision, mission values and strategic issues of your organization? 96 Basic Components of St. Mgt Objective Setting Quantification (if possible) of more precise statement of the goal.

Indicate how the mission can be achieved

Represent specific planned levels of achievement

Provide precise points or states to be achieved 97 Basic Components of St. Mgt Objective Setting (Cont’d…)

Allow review and appraisal of achievement

Make clear:

What is to be accomplished

How much is to be accomplished

By when it is to be accomplished

By whom it is to be accomplished 98 Basic Components of St. Mgt Objective Setting (Contd…) In short an objective should be Specific, Measurable, Achievable, Relevant and Time bound (SMART)

Specificity indicates clearly what needs to be achieved. Example: reduce delay.

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Measurability indicates the possibility to determine if the desired condition is fulfilled. Example: Reduce delays by 40% by the end of 2010.

Achievability indicates a consensus and commitment to the objectives among the major stakeholders 99 Basic Components of St. Mgt Objective Setting (Contd…)

Relevance indicates objectives need to be achievable. It answers feasibility, the availability of authority of the managers and the means of realization.

Time bound indicates a clear understanding of the time scales associated with each objective as defined. It is difficult to have commitment without time frame. 100 Basic Components of St. Mgt Group Exercise 7 Drafting your Objectives

STRATEGIC PLAN

The strategic plan refers to the arrangement and ordering of the activities and tasks that will be necessary to carry out the goals

. Thus, this step focuses on defining and acquiring the necessary resources as well as establishing the timetable for the completion of the tasks. 105 Basic Components of St. Mgt STRATEGIC PLAN cont’d … The development of a strategic plan involves in answering the following five questions:

1. What are the practical alternatives that might be pursued to achieve the goal?

2. What are the barriers to the realization of these alternatives?

3. What major proposals might be pursued to achieve these alternatives or to overcome the barriers to their realization?

4. What major actions with existing staff must be taken within the next year to implement the major proposals?

5. What specific steps must be taken within the next six months to implement the major proposals and who is responsible? 106 Basic Components of St. Mgt STRATEGIC PLAN cont’d … Rucheman (1985) points out that the realization of the plan can be affected by the following six factors:

Scope – where are the clients?

Size – who are the potential clients?

Complexity – how are specific are the objectives?

Duration – how long it will take to implement the objectives?

Components – how many discrete activities?

Innovativeness – how much of a break from the past?

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