Strategic Planning Theories and Methods

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8th Feb 2020 Business Strategy Reference this

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LITERATURE REVIEW

Herzberg’s Two-Factor Theory:

This theory is most suitable for the company that faces hard to retain their employees and wanted to better work from their employees. It is based on the two factors that are hygiene and Satisfaction. Hygiene is work for that job security, promotions, salary etc. These helped to retain their employees as the employees get the wages that for he/she perform or the company as he worked extra for company than he must get extra from company as well (Jordan, 1994).

Satisfaction consists that the employees should get motivation at workplace that comes with the opportunities and responsibilities as well. It does mean that the factors of Herzberg theory gives the employees task with the options of achievements. For example: company gives the incentives on the every sales of their business to their salesmen (Maidani, 1991).

Maslow’s hierarchy theory

Maslow’s hierarchy theory is one of the theories that the work to fulfill the basic needs to esteem level. These help to motivate employees with provide the employees satisfaction level at work as they get better opportunities and fell happy at work place. (Bridwell, 1976)This theory is developed by Maslow in 1946 and it is still in work in many businesses as the success rate of this theory applies in work place get increase (Chand, 2017).

McClelland’s Need Theory

This is one of the most useful theories of strategic management that work on the need based of theory. This is opposing to hierarchy of needs of satisfaction-dissatisfaction. It is developed by McClelland and his associates (Pardee, 1990). In this theory, work on motivation according to need of the employees. As the way of diversity is increasing in world that must need to apply motivation with this theory, as same reward get motivate employee and de motivate another (Conger, 1988).

Expectancy Theory:

This theory is based on the purpose that people’s behaviours are focused on the outcome. For example: a company offers the employees extra hours so that they can get extra money. It can be happen that employees feel happy as they get extra wages, or some might feel demotivated as they have to work extra (IIgen, 1981). It is true that employee’s behaviours get affected positively or negatively as they do get rewards. It is very important that strategic management work on tangible and no tangible rewards that help to motivate employees rather than demotivator (Pinnington, 2007). Strategic management is very important and crucial part of any business. The whole department of workplace is depending on that as they made the employees motivate that they do perform better on the every department. Expectancy is the confidence that better efforts will result in better execution. Hope is affected by components, for example, ownership of proper aptitudes for playing out the activity, accessibility of right assets, accessibility of crucial data and getting the required help for finishing the activity

Resource based theory:

The resource based theory has been a critical advance in vital administration, as it has given another perspective to clarify a company’s prosperity. As indicated by the attention on assets, an association’s prosperity is because of joint assets and capacities which a venture claims and which makes it not quite the same as its competitors (Grant, 1999).Competitive advantage emerges when individuals are differently and begin with forms they can control in an industry – anyway it might be hard to versatile crosswise over firms. Creating a progressing competitive advantage is restricted to particular assets and capacities inside an association that challenges rivalry in its condition. (Barney, 2001)

 Porter five forces model

1)      Competition in the industry – Now a day’s everywhere is a competition even in studies, business, and sports. If any new company want to make a space in the market then they will require creating a unique and best product in affordable prices so once customers will think about their products. (Pollastri, 2004)

2)      Potential of new entrants into the industry – The threat of new entrant porter created effects the competitive environment for the existing business and impact the ability of existing organisation to achieve profitability  (Mandere, 2014).

3)      Power of suppliers– In this factor, supplier power refers to the pressure supplier can exert on organisations by raising price, lowering quality or reducing availability of their products. (Waalewijn).

4)      Power of customers – In this factor bargaining power of the customer can bargain for the price with the shop keeper or salesmen. (Bichanga, 2014)

5)      Substitute– This factor is an alternative option for anything.

LITERATURE REVIEW (METHODOLOGIES OF STRATEGIC PLANNING)

Bench marking

Bench marking is the process of comparing your results with competitors or best practice. It is an essential business activity that is key to understanding competitive advantages and disadvantages. This method is a way of discovering what is the best performance being achieved. It is also a gain insight to ensure that benchmarking is in alignment with the company’s management objectives. This method will help to company for the future analysis like what they have to do, what they need to change in the product and how they have to represent the product in the market (Sekhar, 2010). Assessing the overall methodology looks at how industries compete and how their focused needs line up with their procedures. If the general system goes for expanding benefit, it isn’t predictable with going up against an organization on cost. Benchmarking focus on the execution of industry leaders and enhance the execution by demonstrating the arrangement of necessary needs (Zack, 1999).

 Swot Analysis

 SWOT analysis is the best tool for understanding the assess issues within and outside the organization. This is a powerful way of evaluating the company or project. It helps us to get the exact or the nearby information about the company. It helps us to know about which of the company’s strength can be used to maximise the rate of opportunities. (Ommani, 2011). It also helps to use the company’s strength to minimise the threats you identified. And helps you to take the immediate actions in minimises the company’s weakness using the opportunity as strength.

Strength at organizational level involves properties and abilities by which an organization gains an advantage over other organizations and competitor organizations that are revealed as a result of the analysis of its internal environment. In other words, organizational strength defines the characteristics and situations in which an organization is more effective and efficient compared to their competitors. An organization can be described as strong, equal or weak compared to their competitors based on five criteria’s. For the organization, it is as important to know its weaknesses as its strengths. The reason is that no strategy can be built upon weaknesses. The organizational weaknesses that have the potential to lead the organization to inefficiency and ineffectiveness should be known and improved. Solving the existing problems that would cause difficulties and limitations for long-term plans and strategies, and foreseeing potential problems are obligatory. All environmental factors that can impede organizational efficiency and effectiveness are threats. The new world order formed as a result of globalisation involves both opportunities and threats. This system enhancing opportunities as well as threats directs organizational managements to be careful of and act more strategically on the developments in and outside their environments (GUREL, 1994).

ANALYSIS

Strategic planning must has to understand the need of their employees as they would recognize the talent of their employees as they would offer the recognize. They should give extra to their employees at company to work extra for the company. For example: employees get opportunities to get work with the team to put CCTV camera on the building as they did with perfect they would get rewards for them. This kind of things helps to motivate the employees and build better work environment as well.

Maslow’s needs theory:

-          There might be distinctive progression or request of needs for various representatives. Basically, order of needs may not stay same for workers at all levels.

-          Workers whose lowest level needs have not been met will settle on choices will decide on the basis of pay, security, or dependability concerns.

-          Permit social associations that introduce of feeling of having a place in the premisis, recognize achievements to induce confidence and give chances to workers to satisfy their possibilities.

McClelland’s Need Theory:

Each individual has one of three principle driving motivators: the needs for achievement, affiliation, or power.Achievers always find a solution and achieve their goals. For e.g. those with a solid requirement for connection don’t prefer to emerge or take risk, and they esteem connections above everything else. Those with a solid power motivator get a kick out of the chance to control others and be in control.

Herzberg’s two factor theory:

It is less demanding to really apply Herzberg’s Theory combined with Maslow’s Hierarchy of Needs. This serves to reinforce Herzberg’s Theory as it improves its application as a system to motivate workers. By distinguishing the requirements in Maslow’s order, the motivational elements can be acquired and in this way satisfied. Herzberg perceives that genuine motivation originates from inside a man and not from the environment, or outside variables. Herzberg’s Theory can be connected by directors to motivate employees. By identifying the hygiene factors, directors can satisfy the essential needs of workers and evacuate any component of disappointment. At the point when workers have no disappointment emerging from the activity condition, they are in a superior mode to be motivated.

Expectancy theory:

Increased efforts would lead to expanded execution, given the individual has the correct tool to take care of business. The normal result depend upon regardless of whether the individual has the correct assets to take care of business, has the correct aptitudes to do the job requirements to be done, and they must have the help to take care of business. That help may originate from the supervisor or by simply being given the correct data or instruments to complete the activity. Although many individuals associate high rewards. It is additionally identified with different parameters, for example, position, exertion, obligation, training, etc. It is vital to recollect that there is a distinction among incentives and motivators. Motivating forces are non-material articles. They are controlled by directors and pioneers with the end goal to motivate representatives to do desired tasks.

Synthesise of analysis

This activity is related to strategic planning and company methods; meaning of strategy is a first stage of learning business things. So in this whole assessment I learned about different strategic methods, some methods that I read or understand first time like Boston matrix & competitive analysis method. So through this learning I came to know about the four types of product market, product life cycle and the types of competitor analysis, like how, why and when company following their competitors strategy like competitor dance, the trawler, waiting room. In this report I have learned new& unique things such as qualitative and quantitative data analysis and related to strategy, methods that are more helpful for doing analysis and give me a right & clear vision towards an organisational strategic planning

Through porters five forces model came to know about the different five factors and how it affects the company value and how it helps to company in doing improvements also. The risk of new section is very high. On the off chance that anybody looks as though they’re making a supported benefit, new competitors can come into the business effortlessly for the benefits. Competition is a great degree high. If somebody raises costs, he or she will be rapidly undercut. Exceptional rivalry puts solid descending weight on costs. Buyer Power is solid, again suggesting a solid descending weight on costs. There is some risk of substitution. Bench marking is another more interesting method through this I came to know about decision making that helps to improve the overall performance of the company. When SWOT brainstorming process with administration is finished, check the outcomes so you can see all the positive chances—and any negative patterns—that could influence the system, and how we operate on the whole. After that developing of strategy map take place. After implementation of strategies, programs should be built to help overcome weaknesses and run after opportunities.

Conclusion

All in all, strategic planning is characterized by the result of individuals and the manner in which they utilize systems to achieve their objectives all in all. Strategic management have turned out to be effective and are exhorted in associations and firms. In addition, with fundamental ideas and theories that are particular, they help to decide long term and here and now impacts of the procedures which is a valuable tool to consider when apply strategic management methodologies to the business. Moreover, New Zealand has been dynamic in business connections. Therefore, organizations have thrived, and New Zealand business have turned out to be more effective and perceived due to supporting strategic management procedures

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