The Importance of Strategic Planning in the Business Environment

Essay 2009 5 Pages

Business economics - Operations Research


Importance of Strategic Planning and Management in the Business Environment

The business that the author wants to start is a green eco-friendly organization that designs and builds water turbine induction systems for power creation and water desalination for the costal United States. However, starting a business is a challenge. Without proper procedures and guidelines, a new business owner cannot identify and maintain a game plan to success. Creating a rough outline or game plan by the issuing of a mission statement is part of the strategic management process. To coincide with a mission statement, a vision statement is created that describes what the organization wants to become. This paper will review how important these factors are as well as the four concepts of business: planning, leading, controlling, and organization are to the creating and implementation of a strategic business plan.

Define Strategic Management and Planning

Hermann (2005) states “ Strategic management has developed theories and concepts that mainly examine the environment and look inside the firm, developing ideas and methodical advances that follow and try to predict management practice transformation as seen from an evolutionary perspective on variation, selection, and retention” (p. 111, ¶2). Business strategic management and planning are the processes used to orient an organization over the long-term; which achieves an advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets, and to fulfill stakeholder expectations.

Strategic management is the process to build a game plan using short-term and long-term goals and objectives with an outline from a mission and vision statement. By examining results of the short-term or tactical management revisions can be made to achieve the long-term strategic plan. As with a physical highway roadmap that has mile markers and exits along with alternative road ways, well planned strategic management offers a path to success with check points and offers the ability to make choices on how to proceed based on the issue at hand.

Importance of a Strategic Plan to the Success of this Business

A business cannot achieve maximum success without a strategic plan. By designing and planning a sound strategic plan allows the author and business owner the ability to provide a service that satisfies a need while generating a financial gain. According to Segal-Horn (2004) “Strategy has therefore become understood more a process,” than as a plan (p. 12, ¶3). Several steps are part of building a strategy: Formulate or develop a strategy, strategy implementation or putting the strategy into action, and strategic control or modifying the strategy or its deployment to ensure desired outcomes are attained. The business developed a mission statement: To develop environmentally friendly sources of power and water for coastal regions along the United States while providing for economic profits to allow further growth and future technological advances. In addition to a mission statement, the business developed a vision statement: To eliminate the United States dependency on all foreign energy sources.

By developing a sound strategic plan, the business of developing and building water turbines can achieve sustainable competitive advantage by creating “a unique and valuable position involving a different set of activities….”(Lowson, 2002, p. 52, ¶3). By first formulating or developing an action plan with a rough outline, the author can begin the process of building ones business. In this particular business of developing and selling water turbines, strategic planning is important in assisting in design cost, quality, flexibility, and responsiveness of the organization (Lowson, 2002, p. 51, ¶2). A business owner can manage the business by using the various techniques of planning, leading, controlling, and organizing to ensure that these factors and others that may arise are quickly addressed to move successfully toward the vision statement.

Four Functions of Management

The four functions of management as they relate to creating and implementing a strategic plan are important components. Without these components, planning, leading, controlling, and organizing, a strategic plan would not be a total comprehensive plan encompassing all aspects of what an organization faces internally or externally. From the planning stage in which the infrastructure of the business is created with employees, equipment, and capital are attained to how these resources will be used, the strategic plan is the roadmap used for guidance. In addition, during the planning stage, goal setting, establishing standards, and obtaining necessary resources is performed. Planning takes three forms: Short-term planning or strategy in the form of tactical strategy, long-term planning or strategy or strategic planning, and contingency strategy utilized when an alternative plan is necessary.

Leading is motivating individuals or employees to reach an objective or goal by setting short and long-term goals and the ability to deliver these goals to the employees. Leading also involves being a role model, setting an example, and resolving conflicts. The ability to lead also assists employees learn the ability of empowerment by taking on additional responsibilities, making correct decisions, and completing tasks assigned to them.

Coordinating procedures and resources internally and externally is part of the controlling function of management. By measuring against set guidelines and goals set earlier, a manager can monitor and control outcomes of employees by correcting issues as they arise. By maintaining control of an organization, a manager can maintain an awareness of how productivity is progressing toward the goal or objective.

By taking the rough outline from the planning stage, the organizing step involves prioritizing the steps into a framework that all employees understand. Processes are established in a specific order. For example, employees are assigned jobs and tasks to perform in a particular order for their specific job title. Identifying capable employees and placing them in the best position possible provides managers the flexibility to develop teams that can complete several tasks and assignments at the same time. Thus production and productivity increases. From personnel resources to other resources, organizing involves bring processes and planning together to form a prioritized checklist in how the resources are utilized.



ISBN (eBook)
File size
407 KB
Catalog Number
Institution / College
University of Phoenix
importance strategic planning business environment



Title: The Importance of Strategic Planning in the Business Environment