need for strategic business planning and management

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A Mission Statement is a short expression of the organization's purpose. It should be able to answer the questions like "Why do we exist?" and "What, at the most basic level, do we do?"

A Vision Statement is a picture of the organization's desired future. A vision statement is more internally focused. And happens to answer the main question "Where do we want to be?" also questions like it projects the future in terms of the program, budget or staff size can be answered. Let's consider an organization and for that sake a nonprofit organization for a better understanding of the vision and mission statement and thereby do some justice with the topic.

UNICEF (United Nations children's fund) is one of the leading non-profit organization focusing entirely on the children and the children rights. With its presence in over 180 countries and territories, UNICEF a global organization is working in association with the locals, volunteers and government bodies to provide a much better environment for the children.

1.1 UNICEF's mission statement

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UNICEF is mandated by the United Nations General Assembly to advocate for the protection of children's rights, to help meet their basic needs and to expand their opportunities to reach their full potential.

UNICEF is guided by the Convention on the Rights of the Child and strives to establish children's rights as enduring ethical principles and international standards of behavior towards children.

UNICEF insists that the survival, protection and development of children are universal development imperatives that are integral to human progress.

UNICEF mobilizes political will and material resources to help countries, particularly developing countries, ensure a "first call for children" and to build their capacity to form appropriate policies and deliver services for children and their families.

UNICEF is committed to ensuring special protection for the most disadvantaged children - victims of war, disasters, extreme poverty, all forms of violence and exploitation and those with disabilities.

UNICEF responds in emergencies to protect the rights of children. In coordination with United Nations partners and humanitarian agencies, UNICEF makes its unique facilities for rapid response available to its partners to relieve the suffering of children and those who provide their care.

UNICEF is non-partisan and its cooperation is free of discrimination. In everything it does, the most disadvantaged children and the countries in greatest need have priority.

UNICEF aims, through its country programmes, to promote the equal rights of women and girls and to support their full participation in the political, social, and economic development of their communities.

UNICEF works with all its partners towards the attainment of the sustainable human development goals adopted by the world community and the realization of the vision of peace and social progress enshrined in the Charter of the United Nations.

(Source 1.1 UNICEF's mission statement has been extracted from the UNICEF's home website www.unicef.org)

The mission statement of UNICEF as stated above is the organizations short term and long term goals that the organization intents to achieve globally. We can consider this as one of the examples for understanding how an organization pens down its missions.

1.2 Why vision matters

Without a clear vision an organization is more likely to consider secondary points and set up new targets which ultimately winds up the mission statement on shelf. Hence a strategic plan cannot succeed unless it's not derived from a clear vision as to what would an organization look like at a certain point in the near future. A vision statement should be precise, straightforward and, most importantly, concise. Skip less important secondary points and unwanted deviation; keep the statement focused. Because of the defining nature of the vision statement, it is important for an organization to invest as much time as necessary in crystallizing its ideas and pen them down on the paper.

2. Need For Strategic Business Planning and Management

Once the organization is clear with its mission and visions its time it's time for the planning, a strategic planning of how will you achieve you goals by set time. What are the different tasks involved and who will be assigned with what type of work? These questions are important and need to be answered as it gives a clear framework of where and how we are heading. But most importantly we should know why we need a strategic plan at all? In the present scenario business are no more local they have gone global and nothing like so big can function without effective planning and co-ordination. Many factors like environment socio cultural issues, governing bodies, financial disruptions or even wars for that matter affects the business planning. So there might be changes in the plan but ultimately they should be able to meet the set target. Such a plan can be called as a highly effective and successful plan.

Strategic Planning

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Source: (http://www.civicus.org/new/media/Strategic%20Planning.pdf)HYPERLINK "http://www.civicus.org/new/media/Strategic Planning.pdf)ES"ES

The above stated diagram is a graphical representation of a strategic planning. It is important to understand your plan so that we can make possible changes to the planning process after we have identified the problems.

2.1 Nature, Scope and Characteristics of Strategic Business Planning and Management:

Simply put, strategic planning determines where an organization is going over the next year or more, how it's going to get there and how it'll know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program.

There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the organization's leadership, culture of the organization, complexity of the organization's environment, size of the organization, expertise of planners, etc. For example, there are a variety of strategic planning models, including goals-based, issues-based, organic, scenario (some would assert that scenario planning is more of a technique than model), etc. Goals-based planning is probably the most common and starts with focus on the organization's mission (and vision and/or values), goals to work toward the mission, strategies to achieve the goals, and action planning (who will do what and by when). For example the UNICEF's goals of Issues-based strategic planning often starts by examining issues facing the organization, strategies to address those issues and action plans. Organic strategic planning might start by articulating the organization's vision and values, and then action plans to achieve the vision while adhering to those values. Some planners prefer a particular approach to planning, eg, appreciative inquiry. Some plans are scoped to one year, many to three years, and some to five to ten years into the future. Some plans include only top-level information and no action plans. Some plans are five to eight pages long, while others can be considerably longer.

Quite often, an organization's strategic planners already know much of what will go into a strategic plan (this is true for business planning, too). However, development of the strategic plan greatly helps to clarify the organization's plans and ensure that key leaders are all "on the same script". Far more important than the strategic plan document, is the strategic planning process itself.

Strategy is likely to be concerned with the long-term direction of an organization.

Strategic decisions are likely to be concerned with the scope of an organization's activities. For example, should UNICEF concentrate on one area of activity, or should it have many? The issue of scope of activity is fundamental to strategy because it concerns the way in which those responsible for managing the organization conceive the organization's boundaries. This could include important decisions about product range or geographical coverage. Like should UNICEF concentrate on its promotion and fund raising and volunteer management since it functions on that?

It is very important to know the mission, vision of UNICEF. As for UNICEF, it is likely that underlying values and ideology will be of central strategic significance and play an important part in the development of strategy.

Strategic Management Process

A strategic plan cannot succeed unless it is derived from a clear vision of what the organization will look like at a specific point in the future. This vision is summarized in a written description of the organization's desired future state in terms of budget size, client base, staffing levels and program areas and other parameters. Sometimes the vision is so self-evident at the outset of the planning process that the statement virtually writes itself. But more often, the existing vision may be hazy, ambiguous or outdated. Indeed, the effectiveness of many organizations is hampered by conflicting visions, or myopic visions devoid of "big picture" thinking. Regardless of the starting point, an external scan and organizational assessment are essential prerequisites for drafting an effective vision statement. They ground the process in reality, thereby helping stakeholders narrow their choices or see opportunities that they had not previously considered.

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Vision and Mission (The target of the business): Mission of UNICEF is to advocate for the protection of children's rights, to help meet their basic needs and to expand their opportunities to reach their full potential. Vision of UNICEF is to maintain peace

Strength and weakness (Strong points of business and also weaknesses): there are many strengths such as

Realistic, action-oriented approach

Close working relations with government

Still a leader in supporting immunization programs

Seen to be a leading agency for emergency and humanitarian action and playing a key

Role in inter-agency processes.

Effective fund-raising, with a growing total income from multiple sources of different types

Multiple partnerships with governments, NGOs and civil society

Strong, trusted, world-wide brand image

Important opinion leader

Weakness: every coin has two sides thus so with UNICEF, even they got some weakness and they are:

Partnership: UNICEF priorities and strategies for partnerships are limiting the scope for partnership.

Criticizing Government. While UNICEF's close strong relationships with government departments is praised, UNICEF is perceived as reluctant to tackle government partners on their policy and practice with regard to children.

Bureaucracy and Complexity. UNICEF is seen, and sees itself, as overly bureaucratic. Staff resources (i.e. time plus skill) are being wasted on overly complex internal processes and there seems to be no concerted organizational push to deal with this.

Results-based management. Programming is becoming more results-oriented but this is far from 'managing by results'. Management by inputs is still the dominant management model.

Reporting. Business information solutions have greatly improved but still do not focus adequately on results and are not easily aligned with donor reporting requirements.

Accountability is hampered by a weak performance management regime. Managers are not yet accountable for results or being rewarded for achieving them. UNICEF is not the only UN agency affected by a more general UN malaise with regard to management responsibility for results.

Opportunities and threats (These are related with external environment for the business):

Are economic patterns changing? Which positive trends could be reinforced to ensure the sustainability, and wider availability of the resources?

What organisational structures and networks support individual roles? Are different actors working together? Can leaders be mobilized?

Can leadership, children or young people be mobilised to reinforce positive values and/or promote positive action?

Threats:

Which of the traditional structures or relationships are being eroded? Will competition over scarce resources threaten existing social capital?

How do values attitudes, laws and customs encourage higher risk behaviour? Does this differ for different groups?

What resources are the poor most dependent on? Which resources are most likely to be depleted under current threats?

When considering the global environment, then there are certain factors that need to be considered:

Globalization: The survival for business

First, global considerations impact virtually all strategic decisions! The boundaries of countries no longer can define the limits of our imaginations. To see and appreciate the world from the perspective of others has become a matter of survival for businesses. The underpinnings of strategic management hinge upon managers' gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide. The price and quality of a firm's products and services must be competitive on a worldwide basis, not just a local basis. The distance between the business sectors are becoming less due to the provisions of certain facilities. Although political boundaries are there but in order to become successful in business it is essential to laid stress on globalization.

E-Commerce: A business tool

A second theme is that electric commerce (e-commerce) has become a vital strategic-management tool. An increasing number of companies are gaining competitive advantage by using the Internet for direct selling and for communication with suppliers, customers, creditors, partners, shareholders, clients, and competitors who may be dispersed globally. E-commerce allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness of time, distance and space in doing business, which yields better customer service, greater efficiency, improved products and higher profitability.

The Internet and personal computers are changing the way we organize our lives; inhabit our homes; and relate to and interact with family, friends, neighbors, and even ourselves. The Internet promotes endless comparison shopping which enables consumers worldwide to band together to demand discounts. The Internet has transferred power from businesses to individuals so swiftly that in another decade there may be "regulations" imposed on groups of consumers. Politicians may one day debate the need for "regulation on consumers" rather than "regulation on big business" because of the Internet's empowerment of individuals.

Buyers used to face big obstacles to getting the best price and service, such as limited time and data to compare, but now consumers can quickly scan hundreds of vendors' offerings. Or they can go to Web sites such as CompareNet.com that offers detailed information on more than 100,000 consumer products.

The Internet has changed the very nature and core of buying and selling in nearly all industries. It has fundamentally changed the economics of business in every single industry worldwide

Earth environment has become a major strategic issue

A third theme is that the natural environment has become an important strategic issue. With the demise of communism and the end of the Cold War, perhaps there is now no greater threat to business and society than the continuous exploitation and decimation of our natural environment.

The resources are scarce but the wants are unlimited. In order to meet the wants of the world, the resources should be efficiently utilized. For example, the use of oil resources or energy resources will make the people to use these resources for a long time.

Analyze the different levels of strategy:

Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it.

There are Three Hierarchical Levels of Strategy and they are as follows: -

Corporate Strategy i.e. what business should you are in? Looks at the whole range of business opportunities. It is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".

So Corporate level strategy is mainly concerned with:

Reach: like whether UNICEF has reached those heights and achieved its goal.

Enterprise - wide cross - business process management:

Competitive Contact.

Managing Activity & Business Interrelationship

Management Practices

Business Strategy i.e. Battle plans, tactics used to fight the competition in the industry that your company currently participates in like for UNICEF they are basically in for looking and protecting the children all over the world but its not just UNICEF but there are many such organizations which now look after the children. So it is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

Functional Strategy i.e. operational methods and value adding activities that company choose for its business. It is concerned with how each part of the business is organized to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc. like for UNICEF, and they should know how many volunteers they will need to raise particular funds in an event.

Difference between Business strategies and functional tactics:

They are different in three fundamental ways:

Time horizon

Specificity

Participants who develop them

Fundamental Ways of differences.

Functional Tactics

Business Strategies

Time Horizon

They identify activities that need to be undertaken 'now' or in the immediate future.

They allow functional Managers to adjust to changing conditions.

They focus on firms' position three to five year hence.

The top management should wait for long time before deciding to change the business strategies.

Specificity

They are more specific.

They specify activities that need to be undertaken in each functional area.

They are broader

They provide general direction.

Participants

The operational Managers establish functional tactics.

The tactics have to be approved after discussion with the business head.

Helps in understanding the reality of day to day operating situation.

Business strategies are the responsibility of the head of the business units.

The business strategies must be approved after discussing with the corporate managers.

Helps in understanding the realities for each business unit

Strategic decisions are made at a number of levels in organizations. Corporate-level strategy is concerned with an organization's overall purpose and scope; business-level (or competitive) strategy with how to compete successfully in a market; and operational strategies with how resources, processes and people can effectively deliver corporate- and business-level strategies. Strategic management is distinguished from day-to-day operational management by the complexity of influences on decisions, the organization-wide implications and their long-term implications.

l Strategic management has three major elements: understanding the strategic position, strategic choices for the future and translating strategy into action. The strategic position of an organization is influenced by the external environment, internal strategic capability and the expectations and influence of stakeholders. Strategic choices include the underlying bases of strategy at both the corporate and business levels and the directions and methods of development. Strategic management is also concerned with understanding which choices are likely to succeed or fail. Translating strategy into action is concerned with issues of structuring, resourcing to enable future strategies and managing change. In not-for-profit organizations such as charities, churches, private schools, foundations and so on, the sources of funds may be diverse and are quite likely not to be direct beneficiaries of the services offered. Moreover, they may provide funds in advance of the services being offered - in the form of grants, for example. It is also likely that underlying values and ideology will play an important part in the development of strategy. Nonetheless the principles of competitive strategy (for funds) still hold (see Chapter 5). The fact that multiple sources of funding are likely to exist, linked to the different objectives and expectations of the funding bodies, might also lead to a high incidence of political lobbying, difficulties in clear strategic planning, and a requirement to hold decision making and responsibility at the centre, where it is answerable to external influences, rather than delegate it within the organisation.

Conclusion:

It is important to understand the limitations as well as the possibilities of strategic planning. A strategic plan is not a wish list, a report card or a marketing tool. It is certainly not a magic bullet or a quick cure for everything that ails an organization - especially if the plan winds up on the shelf.

What a strategic plan can do is shed light on an organization's unique strengths and relevant weaknesses, enabling it to pinpoint new opportunities or the causes of current or projected problems. If board and staff are committed to its implementation, a strategic plan can provide an invaluable blueprint for growth and revitalization, enabling an organization to take stock of where it is, determine where it wants to go and chart a course to get there.