Planning strategies Flashcards
Strategic planning process
- senior managers set long term corporate objectives
- SWOT analysis
- develop possible strategies to achieve the corporate objectives, evaluate each one and select the best
- plan out how to implement the strategy
- set up processes of monitoring and evaluating the strategy as it is being implemented
Risks and feasibility affect to strategic decision making
- sensitivity analysis = looks at how well the strategy would do if these assumptions change - would the business be able to cope if costs increase n
- consider how different stakeholders would react= consider how much of an influence that the stakeholders have
- feasibility = access to resources and skills
Contingency planning and crisis management
Preparation for out of the ordinary circumstances
If managers do not plan = lack of preparation so would have to make ‘snap quick decisions’. Of which can have drastic impacts on the rest of the business. However if they have done contingency planning they can react to these circumstances quickly as well as knowing the outcome.
benefits of contingency planning
- allows businesses to minimise the damage of potential crisis due to them being able to make decisions quickly
- shows clear direction of the business
- able to communicate exactly their plans = eliminating resistance to change
- helps managers consider SWOT allowing them to spot opportunities they may have otherwise not noticed
Drawbacks of contingency planning
- can restrict the businesses flexibility = employees may think they have to follow the plan even if it isn’t best suited to the crisis or if there is a better way of reacting
- the plan is based on analysis which could be incorrect as it is difficult to predict long term trends for example
- more useful for businesses in stable markets rather than dynamic innovative ones
Things to be considered when implementing stategy
- need for large changes = increased resistance to change
- need for organisation and planning of resources and what they may need to purchase
- three main factors need to be achieve= communication, leadership and organisational structure
Leadership in strategy implementation
- leader should take responsibility, delegate responsibilities where necessary
- create clear, inspiring vision that come from the top and sets an example for everyone in the business
- motivate everyone to engage with the business process = done through creating positive culture, rewarding employees for hitting target
- need for communication, lots of employee involvement and a suitable leadership style
Communication implementing strategy
- clearly pass on information ideas and motivations
- senior managers need to clearly communicate functional objectives so all staff know what theyre doing and why
- department communication is needed
- any employees effected by the strategy needs to be told why and how it will change their roles and responsibilities
- employees also need to inform managers if there are any issues
The importance of organisational structure when implementing strategy
Functional structures=organise staff by department , can mean each departments has its own culture and focuses on its own priorities and therefore communication between parties can suffer, making it hard to implement strategy
- Product- based structure = organise staff by products- each product division has its own director, marketing and finance , ideal for implementing strategies surrounding one specific product , unnecessary duplication of roles, may be more efficient to have jus one research department for the whole company as an example
- Regional structure- staff organised by geographical location - tends to lead to market development strategy
- Matrix structure- organise staff against the project and the function of the business, clearly defined objectives, encourages departments to build relationships
HOWEVER
- could lead to conflict
Network analysis
Identifies the most efficient and cost-effective way of completing a complex project
Critical path the shortest time when tasks can be finished
- NODES= top right EST (earliest start time) bottom right LFT (latest finish time)
Float time
spare time available for an activity. ONLY NON-CRITICAL PATH ACTIVITIES HAVE FLOAT.
Total float time is the length of time you can delay an activity without delaying the completion of the project
TOTAL FLOAT = LFT- duration - EST
ADV of network analysis
- identifies critical activities = need close supervision
- resources can be transferred from activities with float time to critical activities
- helps firms forecast cash flow- definite EST when they need cash allowing accurate budgeting
- systematic approach - clear sense of direction, covering all grounds
- ## can review progress on individual tasks - if task overruns it float time, can assess whether this will affect the project
Disadvantages to network analysis
- relies on estimates= only useful to those who have previous experience in network analysis who can take into account all possible and common things that may go wrong
- constructing and amending network analysis requires a lot of planning and time
- can set tight deadlines , tempting for employees to cut corners allowing quality to suffer
- doesn’t tell you anything about costs or how successful the project may be
Difficulties when implementing strategy
- lack of resources making things difficult and therefore a need for heavy investing
- managers at all levels need to understand the strategy otherwise miscommunication can lead to tasks being assigned incorrectly
- if there isn’t provision of strong clear leadership and communication, employees might not embrace the changes required
- changing the structure of the business = lead to change in culture
- lack of flexibility in the strategy can lead to the business not being able to adapts to environmental change
Issues with planned strategy
- Increase costs (time and money)= easy to get caught up in trying to plan perfect strategy
- planned strategies gradually become outdated
- senior managers who plan may be out of touch with what’s really going on in the business
- too detailed and theoretical
- managers can become too concerned with data analysis and making sure everything goes right = rigid stopping creation and innovation
- delegation of power when managers become overwhelmed to oversee everything can lead to mistakes
