Introduction
A strategy is a plan, choice, and decision that an organization makes to gain profits, success, and increased market share. Importantly, strategic planning is not strategic thinking (Mintzberg, 1994). This essay discusses the importance of goals and plans to an organization. Also, it examines the elements that are essential in the development of an effective business strategy.
Importance of the three goals to the strategy
Strategic goals
Strategic goals are fundamental since they help the organization to determine what it needs to do in long-term and ways to attain the target. Also, strategic goals assist the particular company to utilize its resources including employees and assets to achieve success. A company benefits from increased productivity, profits, market share, reduced costs of production and efficient utilization of both financial and physical assets. Importantly, the business also observes its social and corporate responsibility under the strategic goals. For instance, Muduli and Kaura (2011) notes that Southwest Airlines realizes an increased number of passengers due to its strategic goals of ensuring its customers get high-class services. The company also has a significant market share and large asset base after merging with Air Tran Airways. Ideally, strategic goals steer the business to the position it wants after a period of five years or more.
Tactic goals
Tactic goals are very vital since they support the strategic goals of the business. These goals help to define what the different departments within the organization should do towards the realization of long-term goals. The success of the diverse departments within the business usually results in success of the whole company. These goals impact production, marketing, sales managers and other middle managers within the firm. Specifically, they help to encourage these managers to increase their productivity. According to Jenkins (2008), McDonald strategic goal to be a market leader in fast food leads to increased productivity in other countries outside the U.S. McDonalds implements local foods in a bid to realize increased sales in countries such as China. Most importantly, tactical goals help to bridge the gap towards the realization of long-term goals.
Operational goals
The importance of the operational goals is that they assist in the achievement of the tactic goals. These particular goals transfer responsibility to line managers and specific employees. The goals help the low-level managers to establish and implement what the employees should do to achieve the tactic goals. They assist in the development of specific procedures and amendment of the existing processes to increase productivity. For instance, McDonald improves the time of service delivery by implementing technology in its outlets (Burkey, 2012). Selling and serving systems are automated in some stores around the U.S. to ensure customers get fast services. Also, the company stocks huge volumes of raw materials to combat instances of late delivery. These goals are vital to an organization since they determine if it will achieve the long-term goals which are usually profitability and increased market share.
Importance of the different types of planning
Planning is an integral part of every organization that wants to succeed in business. The different plans are very crucial in business since they help it to use its innovation, assets, human power and other resources efficiently to attain success. The importance of planning includes:
Direction
The plans offer the organization a particular direction which it should operate. In essence, different businesses function differently to achieve their goals. A strategic plan enables the company to identify a feasible path and discern non-feasible directions. The direction is always the driving force of business towards the target goals. It allows the organization to choose a particular production method over the other. Also, it helps the company to hire the right employees and fire non-productive workers.
Focus
Focus is a fundamental aspect of business, and it is brought about by planning. Every organization should have an absolute focus that can only be achieved through planning. The focus drives all departments in an organization from the top management to the individual employees. For instance, the goal of Southwest Airlines to increase the number of passengers is achievable if the employees focus on offering quality services to all customers.
Clear targets
Planning helps an organization to identify clear objectives. The success of a business is determined by its ability to identify a target customer, which is not achievable without planning. Through strategic plans, an organization is in a position to target the right customers and offer them the products they desire. Most importantly, that process leads to the success of the business. For instance, at the start, Southwest Airlines was targeting passengers from other airlines. However, after planning, the company began targeting bus and train passengers, which leads to success.
Timeline
Planning is importance since it helps the organization to set schedule towards achieving the target goals (Alexander, 2015). Ideally, without a clear timeline, a business cannot accomplish its objectives. The program helps to define the milestones that the firm requires at certain times. A clear timeline inspires the whole organization to improve its productivity, and the result is the success of the entire business.
Measurable goals
Planning helps the organization to implement attainable and measurable goals. A company can measure its success based on the objectives that it has achieved. Most organizations rely on the timeline to measure the goals that it has attained. Hence, without the different types of planning the business cannot be in a position to measure its achievements.
Element or factors in creating a strategy
Various factors need to be considered in creating an effective strategy for business. These factors are essential since they determine the overall success of the plan and organization. First, consider the availability of resources including funds, knowledge and skills. The business should make a decision on how to use these resources to its benefits. Second, the management should understand the essence of incentives and values (PART 1: UNDERSTANDING STRATEGY, 2009). These include both internal and external factors within the environment that may impact the business either positively or negatively. Third, the management should strive to gain employees’ commitment. Ideally, if the stakeholders within an organization do not commit to the strategy, it will fail. Fourth, the plan should be open to new ideas that may arise from the other stakeholders of the organization. The management should welcome good ideas that result from the employees if they lead to success. Finally, the strategy should be flexible. Developments in technology and globalization usually produce in new ways of handling various operations. Also, good ideas often become ineffective after some time (Kaufman, 1992). Hence, the strategy should be flexible to adopt new ideas that arise on the market.
Conclusion
The three types of goals are essential to the strategy of business since they define what the organization wants to achieve. Also, they explain how to attain the goals. The planning methods are important since they determine direction, focus, and clear target help the organization to set measurable goals. Availability of resources, incentives, and gaining employees commitment, are the key elements of a strategic plan. Additionally, the plan should be open and flexible to new ideas.
References
Alexander, M. (2015). 6 proven strategies for evaluating and prioritizing IT projects. Retrieved June 1, 2016, from http://www.cio.com/article/3007575/project-management/6-proven-strategies-for-evaluating-and-prioritizing-it-projects.html
Burkey, B. (2012). Owner: Innovation, technology key to McDonald's success. Central Penn Business Journal, 28(24), 12.
Jenkins, J. (2008). Case study/McDonald’s in china-cooking up a recipe for effective leadership. Leadership in Action, 28(1), 16–17
Kaufman, R. (1992). 6 Steps to Strategic Success. Training & Development, 46(5), 107.
Mintzberg, H. (1994). The Fall and Rise of Strategic Planning. Harvard Business Review, 72(1), 107-114.
Muduli, A., & Kaura, V. (2011). Southwest Airlines Success : A Case Study Analysis. BVIMR Management Edge, 4(2), 115-118.
PART 1: UNDERSTANDING STRATEGY. (2009). Business Strategy, 2nd Edition (pp. 1-30). EIU: Economist Intelligence Unit.
