Fundamentally, rational long-term planning modes of strategic management have divergent effects on not only the external environment (which the business exists in), but also impacts on the survival of small businesses in the same sector. Strategic management is essentially a field of study which provides evaluations of business objectives and formulation of strategies with respect to large established business corporations. As a matter of fact, the study objectifies the provision of long time strategies for the success of big stable corporations. The businesses environment in which such corporations exist in are characterized by different types of pressures. There are issues like competition, government control, shifts in the supply and demand curves as well as customer relations. These and more others depending on the nature of the business dictate the sophistication needed in the formulation of such strategies. However, the business world is composed of large already established firms as well as small developing firms. There have been debates on how fair these modes of strategic management are on the divergent scales of operation in businesses. This necessitates a comprehensive analysis of the different modes of strategic management in the context of scales of operation in businesses.
Theorists have formulated different hypotheses that challenge the theoretical outcome of these modes of strategic planning. It is agreeable that these long-term planning modes of strategic management help business organizations exert control over their external environment through a series of tidy protocols. Actually, these aspects of management equip managers with enough knowledge and procedures in the control of their businesses. The modes outline flexible ways of solving organizational problems as well as solving of emergent problems and maintaining a constant effort toward the organization’s objectives. It has been a common practice for most academics studying different models of businesses to use a theoretical approach in dividing the progress of a business into different stages of growth. It is out of these stages that they derive their theories without thoroughly testing to what extent they conform to practical businesses in the contemporary world.
On the other hand, the impacts these modes have entirely on businesses have been eluded with respect to small businesses. To bring this fact on a more visual platform, it is necessary to evaluate these modes in practice and link their impacts to different business scales. Actually, this analysis stretches the scales of business operations to two distinct points (large already established businesses and small developing businesses). Strategy in most studies is viewed as the overall outcome of different planning processes outlined by managers of a business corporation.
Therefore, informal businesses do not employ real predetermined strategies but combine numerous plans of the divergent aspects of a business to name his or her strategy. However, large already established businesses use formal strategies to ensure the business has full control of its internal environment as well as external environment and the control of its spheres of influence. Businesses in the contemporary world require pre-evaluation of continuity strategies that will ultimately guide the businesses through mature challenges in the market. In essence, the importance of rational planning in the context of long-term solutions for a particular business cannot be termed with any less importance than it deserves.
As a matter of fact, by experience, there is a distinctive gap between planning, failure to plan and long-term solutions. These are factors that are very important as far as the success of a business is concerned. These modes of strategic management offers a solution for long-term problems speculated to affect the business in a not so near future. The illusion made by academics in the formulation of these theories is the need for such decisions by small businesses. It is a fact that large businesses have existing pressures for the formulation of long-term strategies and therefore are not driven solely on the pressures of speculation. Contrary to this fact, small businesses have no taste of challenges that come with time therefore only feel the need of long-term planning from speculations.
Of significance is a comparative analysis of the traditional techniques of management and that which is practiced in the contemporary business arena. The traditional way in which this was done has been the background of all organizational management systems. In this system, the major decisions are made after a comprehensive analysis by top stakeholders of the management team who structure the organizational objectives and plan on the ways in which the formulated policies are to be implemented.
These strategies rely on the belief that the managers have the required competency to actually analyze a particular prospect of the business and establish the possible challenges that would crop up after some time and develop flexible and adjustable solutions. These decisions have to be observant of the organizational objectives and operate in line with mutual transactional protocols. In this context of strategic planning, there can be several modes of rational planning that can be employed by managers of large businesses, however, it is only possible to analyze the most basic of all the modes used in the business world and studied in strategic managerial planning studies.
Studies in strategic management dictate that there are moderating factors which determine the selection of a mode of strategic management. There are numerous factors to be considered by the management team before deciding on the best approach to employ. For instance, the industry environment and organizational size are a few of the fundamental moderating factors that are put into consideration. However, as explained above, the aspect of organizational size is often undermined owing to the nature of small businesses with respect to the need for long-term solutions. Therefore, this analysis is partially based on the assumption academics make on the insignificance of small firms in the adoption of a mode of plan in strategic management. In this context, a study of the existence of small businesses in the contemporary business world reveals greater suffering as a result of distinctive scales of operation. Hence, as large firms are heavily considered in such terms of planning, small businesses are marginally left to suffer.
Scholars and business theorists have classified long-term planning as analysis-oriented programs instead of action-oriented programs. This means that the responsible individuals in an organization have to analyze the position of the business and evaluate the aspects of the whole business that would be affected in the event a certain pressure fell on the business. This way, the management is able to prepare the business for any form of emergencies. For instance, a large business which serves a wider market can have a problem if its customers shift their attentions to a subsidiary product in the same market.
Therefore, the company will suffer looses as a result of declining sales. Additionally, the business world is an entirely competitive game and each company relies on its strategies to secure a confirmed position in the market. Therefore, a business has to maintain aspects and factors which give it an added competitive advantage over other firms. All these and more pressures can be solved by a single exclusive business plan entrenched in one mode of strategic management. The management team is mandated with the authority to control an entire business, which enables it to create a balance in its production activities.
As a matter of fact, it is this decision-making aspect which undermines small businesses. Large businesses owing to their scales of operation are able to employ extra individuals for the sole purpose of managing the business without affecting the financial worth of the business. On the other hand, the scales in which small businesses operate on do not put them in the best of positions to secure a team to govern their planning and decision-making processes. Therefore, the aspect of rational long-term planning modes of strategic management is left for use by large firms at the expense of these smaller businesses. This actually explains the disparity in performance of smaller businesses as compared to their larger counterparts in business ecosystems where the two corporations serve the same market.
Basically, the formulation of rational long-term planning modes of strategic management involves the compilation of a mission, aim, policy, and ultimately a strategy which incorporates all the aspects of the business. Additionally, results from evaluations carried out on the internal and external environments of the business are used to check the relevance of the strategy to the business. The strategy has to create a perfect fit for the business in the environment it exists in. In essence, the steps involved in the formulation of these modes of strategic management are so involving that a small-scale businessperson would not care to venture into at the expense of the business. It actually involves an evaluation to determine the current position of the company in terms of performance and scale. This is the initial step which can be performed irrespective of the scale of operation. A large business can evaluate its worth and performance by summing up data from its various branches of operation, on the other hand, small business are flexible enough to determine the size and performance of their corporations.
Additionally, the business has to review and evaluate the stakeholders in its managerial positions to identify the individuals mandated with the responsibility of managing the organization. This will enable the business to form a talented team to guide its decision-making processes as well as strategizing. This is actually the procedure (as already discussed above) that undermines the existence of small businesses. Actually, the theoretical impression these modes of planning present to businesses is that of a business wavering its way through success by mastering its internal and external environments. However, the practice of the steps becomes a preserve for large companies, as small businesses would jeopardize their existence given the competitive nature of the markets they serve.
Moreover, it is fundamental to inspect the external environment of the business. This will reveal different factors that will either advantage the business or disadvantage the business on strategic platforms. To be precise, there are external factors which pose great dangers to certain aspects of a business. A business that relies heavily on the services offered by external bodies will suffer in such situations more than those with large control from its individual resources. Additionally, the presence of certain factors in the external environment may advantage the business. All these have to be included in the overall business strategy adopted by the business. The managerial team has to come up with a strategy that takes advantage of available resources as well as protects the business against threats posed by external environmental factors.
In the same way, there are factors from within the business that can either advantage or disadvantage the success of a business. Hence, an analysis of the internal factors of a business is also important. To be specific, there are specific points or activities within a business responsible for its strength, while others are responsible for its weaknesses. For the business to actually endure long durations of operation, it has to find a way of eliminating or improving on its weaknesses as well as maximizing on its strengths. Therefore, the formulation of rational long-term planning modes of strategic management (irrespective of the size of the business) requires good knowledge of a business’ environment. For instance, perfect knowledge of the market enables the business to strategize on its competitive habits as well as designs of production with respect to other products in the marke.
Therefore, all the above factors are joined to one conclusive strategy which is termed as the rational long-term planning mode of strategic management.
They can take any of three basic forms: entrepreneurial mode, adaptive mode and planning mode. Entrepreneurial mode is accomplished by one individual who is responsible for planning and evaluating the different aspects of the business. Therefore all the tests discussed above are performed by the same individual who comes up with the conclusive strategy for the business. On the other hand, adaptive mode involves a flexible team which formulates a background strategy. This strategy is adjusted with respect to the emerging issues in the process of operation. This is actually another platform in which these modes disadvantage small businesses. Finally, planning mode (which is the most commonly used) involves the analysis and weighing of the results of all the factors considered and coming up with a rational mode for the business. As a matter of fact, most of the approaches discussed are subdivisions of the planning mode of strategic planning.
In the context of how much small businesses can utilize rational long-term planning modes of strategic management, it would be illogical for a business to observe all the aspects of their continuity at the expense of its existence in the competitive business world. Therefore, this leaves small businesses at the compromising position of employing either part of or a totally different approach to strategic business planning. Large stable businesses are advantaged with the possibility of running programs simultaneously without jeopardizing the continuity or stability of the business. Therefore, it is true that the theoretical perspective of strategic management is not entirely true in terms of utilization and with respect to small and large-scale operation.
In conclusion, a competitive strategy a company adopts is aimed at finding an advantageous position within the industry so as to effectively endure or influence those competitive powers and develop a strong stand in the business ecosystem. Therefore, it is a responsibility for every business to evaluate the best approach in terms of strategic management and modes of production that will ensure the best business transactions are achieved. The discussion above reveals the marginal disadvantage that befalls small businesses with respect to the adoption of rational long-term planning modes of strategic management. However, there are numerous business tools that can be used by businesses irrespective of their scales to get the best out of their operations.
Bibliography
Allio, K. (2004). Family Businesses: Their Virtues, Vices, and Strategic Path. Strategy & Leadership , 24-33.
Baum, J., Locke, A., & Smith, G. (2001). A Multidimensional Model of Venture Growth. Academy of Management Journal , 292-303.
Baum, J., Locke, A., & Smith, G. (2001). A Multidimensional Model of Venture Growth. Academy of Management Journal , 292-303.
Birley, S., Ng, D., & Godfrey, A. (1999). The Family and the Business. Long Range Planning , 598-608.
Bradley, D. (2008). The importance of marketing planning to prevent small business failure. San Diego: Small Business Institute Directors Association.
Caruana, A., Morris, H., & Vella, J. (1998). The Effect of Centralization and Formalization on Entrepreneurship in Export Firms. Journal of Small Business Management , 16-29.
Daniel, D. (2012). Strategy-As-Practice to Reconcile Small Businesses’ Strategies and RBV. Journal of Management Policy and Practice , 46-66.
Delmar, F., & Shane, S. (2004). Does Business Planning Facilitate The Development of New Ventures. Journal of Business Venturing , 767-785.
Florin, J., & Schulze, W. (2003). A Social Capital Model of High-Growth Ventures. Academy of Management Journal , 374-384.
Gaurav, A. (2011, 12 29). Kalyan city life. Retrieved 12 13, 2013, from Modes of strategic planning : http://kalyan-city.blogspot.com/2011/12/modes-of-strategic-planning.html
Headd, B. (2007). Redifining Business Success. Small Business Economics Journal , 2-28.
Jonathan, L., & Benyamin, B. (2010). a terminal assessment of stage theory: introducing a dynamic states approach to entrepreneurship. Entrepreneurship, theory and practice , 317-350.
Low, J., & Kalafut, P. (2002). Invisible Advantage: How Intangibles Are Driving Business Performance. New York: Perseus Publishers.
Magretta, J. (2004). Governing the Family-Owned Enterprise. Harvard Business Journal , 113-123.
Mazzarol, T. (2000). Do Formal Business Plans Really Matter? Brisbane: 45th International Conference on Small Business.
Perry, S. (2001). The Relationship Between Written Business Plans and the Failure of Small Businesses. Journal of Small Business Management , 201-208.
Qian, G., & Li, L. (2003). Profitability of Small- and Medium-Sized Enterprises in High-Tech Industries. Strategic Management Journal , 881-887.
Sonfield, C., Lussier, S., Pfeifer, S., Manykutty, S., Maherault, L., & Verdier, L. (2004). A Cross-National Investigation of First-Generation and Subsequent-Generation Family Members. Clearwater: Small Business Institute Conference.
Weaver, K., & Dickson, P. (2004). Strategic Alliances. NFIB Nationa lSmall Business Poll , 1-4.
Westhead, P. (2008). Company Performance and Objectives. New York: First and Multi-Generation Family Companies.
