Importance of Strategic Planning and Management in the Business Environment

“Strategic management involves decisions concerning what a company might do, given the opportunities in its environment; what it can do, given the resources at its disposal; what it wants to do, given the personal values and aspirations of key decision makers; and what it should do, given the ethical and legal context in which it is operating” (Dobson). Organizations need to know where they are heading to and a firm concept of the kind of business it is in. An organization’s
‘product-market scope’ specifies the particular products or services of the organization and the ‘growth vector’ is the direction the organization is moving in terms of its current product-market scope. Strategic management is an art and science that must be studied by top management and it involves formulating, implementing and evaluating the cross-functional decisions that have been created so that an organization can achieve its objectives. The organization identifies its objectives, acquire the resources needed to implement the policies and strategies to achieve its goals. In order to be successful, strategic management synthesizes the activities of the different sectors of the business such as sales, marketing, production, etc. so that organizational goals can be achieved. Also, strategic management is a continuous process of assessing the business, the industry it belongs, its competitors, for the improvement of the organization.

According to Carter McNamara, “Strategic planning determines where an organization is going over the next year or more and how it’s going to get there.” (McNamara 2008). The strategic planning process is organization-wide, or it can be focused on a major function. The major activities of the strategic planning process include strategic analysis; setting strategic direction; and action planning.


Small business owners need strategic planning because it involves figuring out where the business is going with the aim of achieving overall success and at the same time, pinpoint strategic objectives. Owners of small businesses must give time to look for ways to grow and increase turnover. Most big businesses have used strategic planning when they were still new and small businesses. Strategic planning and business strategy are essential to achieve the goals of the business and without strategic planning and decision making, no business can head forward over the long term.

Strategic demands the owner’s own thoughts and ideas and owners must make it as a major concern. His/Her personal investment in strategic planning is essential and fundamental to make the business to grow and improve the way the business operates and without strategic planning, the business will likely stumble into one problem to another. Therefore, small business owners must consider strategic planning frequently and regularly as it is essential to long term success.

The four functions of management in relation to the creation and implementation of an organization’s strategic plan are as follows: planning, organizing, leading, and controlling. This paper is going to analyze an external IT company that has been assigned and contracted to take over the internal IT functions of an organization, particularly, the desktop support department. The goal of the external IT Company is to offer the highest quality service with an equally high financial return rate. In the planning stage, the company has to analyze the needs of the organization in terms of technology such as hardware types to support, peripherals, and other various office related equipment. The number of customers impacts the number of support staff needed and the skill levels required. The next phase is organizing and the company is going to reduce the number of their desk side support team for the purpose of minimizing expenses but they have to assign a technician to build an operating system, customize it so that the security needs and standards of the organization are met. The next phase is leading and its purpose is to channel the behavior of the personnel so that the organization’s mission and objectives are accomplished. In the IT Company, they need to establish good relationship with their staff, give good compensation and benefits, provide them with the best training, promotion, and others so that they will be motivated and become more effective and contribute to the success of the organization. The last function is controlling which refers to the process of establishing the performance standards according to the company’s objectives, comparing and taking preventive or corrective action as necessary. The controlling function involves evaluating and reporting the actual job performance of their staff. It is important that these points be studied and further corrective and preventive actions can be decided. In solving performance problems, there is a need for management to higher their standards, speak to the employee on any problem that hinders him/her to work excellently, and check any other problems that may affect performance.

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“Effective and efficient management leads to success, the success where it attains the objectives and goals of the organizations.” (Pakhare, J. 2007). In achieving the ultimate goal, management has to be creative in solving problems in all the four functions.


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