Strategic Planning in the Small Business

Unit 2

HO 2-5 (continued)

Moreover, the firm's

ability to attract and keep quality work­

ers is affected,

in part, by the worker's feelings about the ad-"

equacy of compensation.

In addition to the question of adequacy, one must

be sure

that the compensation system

is consistent with tie strategicthrust

of the firm. If the firm is moving aggressively

into new markets

and

is depending on the efforts of its sales force to attract

new

customers, the compensation

system must reflect this. Perhaps

quotas,

bonuses, or a commission system is needed

to entice

workers

to excel in attracting new contacts and businesses.

The

firm's hourly wage rate

may have worked fine in the past, but

the new

demands require new motivational efforts. It

is im­

portant to realize

that a compensation system may need little

or no revision. The system

properly designed can work to aid

the manager in achieving desired

results.

FOCUS ON STRATEGY

The discussion of this

chapter should be good reading for any

student or manager

interested in assessing the current position

of firm.

The interest in this book, however, is on strategic

planning. Thus, whenever,

one assesses a firm's position, that

assessment must consider the firm's current position.

But more

importantly, it must

consider the firm's position as related to its

future ability to compete and its ability to achieve

long term goals.

Simply assessing current position is

insufficient. The future

orientation must be kept in mind.

In the financial area, we are

interested in the firm's cur­

rent financial position, but

we are more interested in the ca­

pability to embark on a new strategy, given the

current position.

In the marketing area, we

may determine that the distribu­

tion system

is adequate. But when we consider that we may

be

expanding next year, then

the distribution system may not be

adequate. The morale in the manufacturing

plant may be ac­

ceptable, but will it

still be adequate after we make m,'jor

changes in the

manufacturing process? The focus must be on

the future.

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One 7'he Analysis Phase

227