Strategic Planning in the Small Business

Unit 1

HO 1-5 (continued)

4 Part I The Concepts and Techniques of Strategic Management

There is ftrong

reason to associate "good management" with

how well

managers craft and execute strategy. It is hard tojustif. a top grade

for managers

who design shrewd strategies but fail to execute them %%ell:

weak implementation

opens the door for organizational performance

to fall short of full potential.

Competent execution of a

mediocre strategy scarcel. qualifies managers for a

gold-star award

either. The standards for judging whether an organization is well

managed, therefore, include

good strategy-making comihned with good strateg

execution. The better conceived an organization's

strateg.y and the more flawless

its execution. the greater the chance that the organization

will perform up to

potential.

This is not

to say that doing a good job of strateg.-making and strategy­

implementing will guarantee excellent organizational

performance every year.

Organizations can always go downhill for short periods

because of adverse condi­

tions beyond management's ability to foresee

or react to. But the bad luck of

adverse evens never excuses weak performance year

after year. It is always

management s responsibility to adjust to adverse conditions by undertaking

stra­

tegic

defenres and managerial approaches that produce par performance despite a

normal run of adversity.

THE FIVE TASKS

OF STRATEGIC MANAGEMENT

The strategic management

function has five interrelated components:

1. Developing a concept of the

business and forminc a vision of where the or­

ganization needs to be headed-in effect, infusing

the organization with a

sense of purpose,

providing long-term direction. and establishing

a mis. ion.

2. Translating the nission

into specific long-range and short-range perform­

ance objectives.

3. Crafting

a strategy to achieve the targeted performance.

4. Implementing and executin, the chosen strateg) efficiently

and effectively.

5. Evaluating perfi)rmance,

reviewing the situation, and initiating corrective

adjustments in mission, objectives,

strategy, or implementation in light of

actual experience, changing conditions,

new ideas. and new opportunities.

A model of

the process is shown in Figure !-1. Let's take a

brief look at each one

of these components to

provide perspective for the chapters that follow.

Developing a Vision

and a Mission

The forerrost direction-setting

question facing the senior managers of any enter­

prise is "What

is our business and what will it be?" Developing a thoughtful

answer to this question pushes

managers to consider v.hat the organization's

business makeup should be and to develop

a c!carer vision of where the organiza­

tion needs to be headed over the next 5 to 10 years. Management's answer

to

"WhLi is our business

and what will it be?" begins the process of carving out a

r. 'aniigful directior for the organization

to take and of establishing a strong

o, ;anizational iden.ity. Management's vision of what the organization seeks

to do

atd to become is commonly termed

the organization's mission. A mission state­

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