Strategic Planning – Mission and Values
Overview
 Planning is the most important and basic
management function
 Involves setting objectives and then establishing
policies, procedures and action plans
 Strategic planning establishes the direction the
organization will take over a long term



Involves developing goals for the future that reflect current
threats and opportunities
Match the strength and weakness of the organization
Quality planning identifies the needed resources, both
current and future, including space, materials, equipment and
human
A. Organizational Planning
 Planning is one of the primary management functions
or an organization
 Planning entails establishing objectives and then setting
policies, procedures, and action plans to achieve
objectives
 Types of Planning – four main types:




Strategic planning – long term;
Tactical planning – short term;
Operational planning – day-to-day;
Contingency planning – coping with unforeseen
A. Organizational Planning (cont’d)
 Strategic planning
 establishes long-term goals agreed upon by the entire
organization
 Establishes clear parameters for recognizing and
achieving success
 Directs a process of continuous adaptation
 Formal process of planning to fit the mission and values
of the organization
 Done by upper level management – does not work well
without support from the top managers
A. Organizational Planning (cont’d)
 Tactical planning – involves setting short-term goals
that show how to achieve the broad objectives
specified in the strategic plans
 Operational planning – involves first-line managers
conducting day-to-day activities necessary to achieve
longer term tactical and strategic goals
 Contingency planning – involves developing action
plans to help organizations cope with any unforeseen
events that may arise
A. Organizational Planning (cont’d)
 Strategic Planning Process:
 First steps – first goal is to clarify a vision and a mission
of the organization



Mission – most broadly stated objective of an organization is
called its mission; basic purpose for the organization’s
existence!
Senior management determines its mission; all managers are
responsible for understanding, communicating and
implementing the mission
Strategy – describes the plan the general or team manager or
planner has for using the organization’s resources to achieve a
specific objective
A. Organizational Planning (cont’d)
 Three levels of strategy:



Corporate-level – involves the entire corporate organization
(General Motors, for example)
Business-level – involves the independent business unit of a
larger company (Cadillac, a division of GM)
Functional – departments within a business unit can also have
goals, objectives, and mission statements (GM engineering
group)
A. Organizational Planning (cont’d)
 Data Collection and Analyses
 Crucial to the process of strategic planning
 Universal approach to analysis is called SWOT analysis


SWOT = stands for strengths, weaknesses, opportunities and
threats for the organization
System used to scan the environment and understand the
factors that will affect the strategy designed
 SWOT analysis is a long-standing technique used by co’s for
planning
 Every aspect of the business is included in the analysis: 1)
business activity, 2) goals, 3) resources, 4)weaknesses
A. Organizational Planning (cont’d)
 Conducting SWOT
 Task force engages in a session that looks like brainstorming or a
focus group
 Posting lists of strengths, weaknesses, opportunities and threats
 Participants vote
 Leader guides group through discussion of outcome
 Tabulating the SWOT
 Internal and external audits – another method used for analyzing
a corporation’s strengths and weaknesses
 Internal audit reviews the mission statement and the degree of
success the business mission has had
 External audit addresses five categories: economic forces, social
forces, political forces, technological forces and competitive
forces
A. Organizational Planning (cont’d)
 Gap Analysis measures the gap between perception
and reality within the organization
 Other analyses – collected from external and internal
sources: government data; business association data;
research trends
 Current trends influencing strategic planning
 Globalization of the marketplace
 Technology innovation
 Security – post 9/11
 employment
B. Managing the Strategic Plan
 Formulation of a strategic plan involves the
preparation of a mission statement and the
formulation of a set of goals that connect the mission
to the activity of the organization
 Objectives = goals: refers to the end results an
organization seeks to attain to fulfill the organization’s
mission
 Objectives are the primary management tool for
achieving any plan

Objectives are measurable and observable
 Multiple objectives
 Short-term, intermediate and long-term objectives
B. Managing the Strategic Plan (cont’d)
 Necessary objectives
 Peter Drucker, noted management theorist, identified eight
key areas in which any organization should have specific
objectives on which to focus:
 Market standing
 Innovation
 Profitability
 Productivity
 Physical and financial resource
 Managerial performance and development
 Worker performance and attitude
 Public responsibility
B. Managing the Strategic Plan (cont’d)
 Action Guidelines
 Objectives establish WHAT is to be done
 Action guidelines guide the organization’s employees in
how the work is to be performed


Policies, procedures and rules
 Policies are general statements developed by org. mgmt and
communicated to managers and supervisors
 Policies define limits, govern and direct
Procedures are sets, or sequences of steps to be followed in
performing specific tasks or actions
 Procedures specify behavior for managers to follow in making
decisions
B. Managing the Strategic Plan (cont’d)
 Policy focuses on a wide range of actions or decisions
that may be made by organization members at any level
of the organization



Policy governs = describes the way actions are completed or
decisions are made
Policy directs = policy statement represents management’s
preference or commitments on a subject; subordinates are
expected to follow the policy guideline as they exercise
authority, make decisions or take actions
Procedure = set of steps to be followed in performing a
specific task or action
B. Managing the Strategic Plan (cont’d)
 Rule = states exactly what is to be done; most commonly
established in matters of health, safety and other areas
of importance
 Duration of plans
 Strategic – long range
 Tactical – shorter duration, more specific and objective
 Operational – responsibility of first-line managers;
specific and objective; just a few hours to a few days
 Contingency – designed to assist the organization in
dealing with dynamic environments
B. Managing the Strategic Plan (cont’d)
 Types of plans
 Standing-use plans – guide regular activity of an
organization


Procedure guidelines, calendars, report cycles, documents
Strategic, tactical, operational, contingency could be
considered standing-use plans
 Single-use plans – cover an activity such as a technology
transition, physical move to a temporary location,
installation of complex machinery or systemwide
software
 Evaluation of plans – determining success and making
adjustments
C. Communicating Mission and Values
 Mission and values of an organization must be
communicated throughout the organization
 Communicating is the process of sharing ideas in such a
way that others will understand and be able to use the
transmitted information
 Upper management levels create policy statements

Policy statements specify how management and employees
will work together in the organizational structure
 Employees are expected to follow policies; in order to
implement policies effectively, procedures must be
carefully developed and articulated
C. Communicating Mission and Values (cont’d)
 Policies need to be stated and communicated explicitly
 Formal policies must be written and wording of a written
policy cannot be changed by word of mouth
 Written policy helps new supervisors become more familiar
with the company and its established policies quickly
 Development of companywide policies and procedures
manuals help standardize many practices that formerly were
hearsay
 Public and employee relations
 Public relations policies must be established so that products
and services are provided that meet public demand
 Customers and clients are provided with expected service
 Marketing practices adhere to requirements of legislation
C. Communicating Mission and Values (cont’d)
 Employee relations policies
 Hiring new employees
 Training
 Promoting employees
 EAPs – special services provide help for employees who are having
difficulty with stress, drug abuse, alcoholism, finances or other
personal problems
 Retiring and discharging employees
 Employee benefits
 Support of formal authority system – policies and procedures
in effect within an organization communicate the
expectations of the formal authority system
C. Communicating Mission and Values (cont’d)
 Management by Objectives (MBO) – systematic
approach to planning and controlling activities
whereby superiors and those who report to them
(subordinates) collaborate on setting objectives
 One of the more popular management approaches that
begin as a planning process
 Peter Drucker is generally credited with originating
this approach

Mutual setting of objectives – employee and supervisor
together initiate a set of specific goals for areas of
responsibility
C. Communicating Mission and Values (cont’d)
 Setting of measurable objectives
 Regular monitoring and performance evaluation
 Effectiveness of MBO

Some problems or limitations with the use of MBO:
 Time consuming
 Top management must support MBO and be involved in it
 Emphasis on short-term objectives
 Some individuals are not positively motivated!
 Managers are reluctant to share the goal-setting process
C. Communicating Mission and Values (cont’d)
 Ethics = standards of right and wrong behavior that
guide people
 Common ethical principles generally include:






Honesty
Fairness
Respect for others
Nonviolence
Helpfulness
Code of ethics = actual statement made by corporations
stating its ethical views in its mission statements
C. Communicating Mission and Values (cont’d)



Physicians subscribe to the Hippocratic Oath
Stockbrokers have codes against using information that was
gained from “insiders”
Businesses publish “codes of conduct”
 Corporate social responsibility
 Enron scandal – 2001 led to public scrutiny, cynicism and
skepticism
 Public has heightened skepticism about the social
responsibility of businesses and corporations
 Corporations have an ethical responsibility to all of its
stakeholders – all persons whom the organization is dedicated
to serve