Top Special Offer! Check discount
Get 13% off your first order - useTopStart13discount code now!
Experts in this subject field are ready to write an original essay following your instructions to the dot!Hire a Writer
Strategy are developed to attain a certain goal(s) pursued by a firm in order to fit with the current business environment and unlock possible prospects. It assists a company in remaining focused on its mission and mandate. The strategy enables a company to properly use its resources and make wise decisions that are consistent with the organization's overall goal (Hitt, Ireland, and Hoskisson, 239). To ensure that a strategy is aligned with the desired aim, it must be constantly reviewed against specific criteria or metrics established throughout the strategy formation process. It is against these metrics that enables an entity to know how a strategy is responding against anticipated outcomes.
Measurement metrics are created during the initial stages of strategy formulation because they are the foundation of the strategy itself. These metrics are the ones which define the goal an organization wishes to achieve or a problem that organization aims at solving. From the description of what an entity want to achieve or to solve, arises the metrics to be used to ensure that the agreed solution responds in accordance with the defined problem or target (Hitt, Ireland, and Hoskisson, 242). As such, the formulation of an effective and efficient strategy will be developed according to metrics that will be used to measure it. Measurement of a strategy is significant at particular points to gauge its performance and to ensure that there is no deviation from the expected outcomes.
These metrics allow an entity to track a strategy after its implementation through measuring its actual performance in the course of implementation against the anticipated outcomes. This happens at various points during the implementation to allow a timely response from the management. The strategy is designed to be yielding certain outcomes over a period of time. Metrics developed early according to the stage of implementation, allow an entity to measure outcomes at that particular stage. Management takes an action in accordance with the outcomes; if a strategy indicates that it is performing according to the expected outcomes at a certain stage, management provides supporting elements to enhance the outcomes. However, if it indicates that it is deviating from the expected results, appropriate corrective measures are applied in order to rectify the situation and restore it in line with the implementation plan (Thompson and Strickland, 226). Hence, metrics allow an entity to track the strategy at various stages over its life.
In order to develop metrics which are in line with the strategy, company capacity, and the external elements, an entity needs to conduct environmental scanning. This scanning enables an entity to develop valid metrics which will enable it to formulate a strategy that will produce the desired outcomes. To ensure that metrics that are to be developed are in line with the company's abilities in terms of resources, human capital, and processes; it necessitates analysis of internal environment (Thompson and Strickland, 234). Internal analysis enables a firm to assess its internal capacity to ensure that the metrics to be developed are viable and applicable. It also enables an entity to allocate sufficient financial and human capital which will facilitate effective monitoring of the performance of the strategy.
In addition, scanning of external environment will be conducted to make sure that metrics that will oversee the successful development and implementation of a strategy are developed in accordance with the legal requirements, prevailing technology, and cultural factors. This scanning will ensure that an entity does not formulate strategies which surpass its mandate legal like Enron Corporation or which cannot be supported by the prevailing technology or one that does not fit into the cultural practices of the surrounding community(Thompson and Strickland, 243). As a result of this scanning, it will not only ensure that an entity formulates metrics and strategy that is appropriate but also will ensure that it is compliant with the necessary external expectations.
The sole purpose of existence of a certain business firm is the make profit. All actions and measures taken in a business organization are aimed at enhancing its profitability and sustainability. Strategic planning is a way defining an entity's strategy and taking appropriate actions such as allocating adequate resources in order to realize the expectations of a strategy (Hitt, Ireland, and Hoskisson, 247). It simplifies a complicated strategy into detailed instructions avoiding confusion among the workforce since everybody is aware of their duties and responsibility. It gives employees the freedom to use their own discretion to make certain decisions when undertaking their duties, allowing creativity and cultivating innovative thinking. Through creativity and innovative thinking, production methods are improved resulting in the production of high-quality products. These products will efficiently satisfy the needs of customers who consequently will become loyal to an entity. Therefore, the whole process of strategic planning culminates in creation and enhancement of value in an organization.
An example of how a company can use strategic planning to create value for the organization is by breaking down a strategy into simple instructions which an employee can follow on their own allowing them to use their discretion to make certain decisions in the production process (Hitt, Ireland, and Hoskisson, 250). This leads to creative and innovative thinking in an entity and its outcomes lead to value creation for such entity.
Hitt, Michael, R. Duane Ireland, and Robert Hoskisson. Strategic management: Concepts and cases. Cengage Learning, 2006: p.236-253.
Thompson, Arthur A., and Alonzo J. Strickland. Strategic management: Concepts and cases. McGraw-Hill/Irvin, 2001: p.222-247.
This sample could have been used by your fellow student... Get your own unique essay on any topic and submit it by the deadline.
Hire one of our experts to create a completely original paper even in 3 hours!