Strategic management

Strategic Management

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Strategic Management

A goal can be defined as objective to do something measurable within a given period of time(Davis,1996).Setting goals is one of the most basic and fundamental elements both at individual and organizational level. Goals show a clear direction and destination that people in an organization need to be moving towards. Goals can be both long term and short-term but whatever the goal that are set and put in place the end objective is always almost the same; to achieve better results, improve service delivery or perhaps increase the profit margin.

There are three types of goals that can be set by any given organization and these goals are arranged in a hierarchy from top to bottom and that is because by achieving the low-level goals that becomes a means of achieving the higher-level goals; strategic, tactical and operational goals (Davis,1996).

Strategic goals are those that set by the top management and also mainly meant for the top echelons of an organization that are concerned with the main objectives of an organization. Take for instance Southwest Airlines, the main objective of these company is to remain profitable and this achieved by keeping the price of air tickets lows, ensuring passengers are happy and cutting down on the operational expenses. This goal is important to overall strategy of Southwest Airlines because it is enables the company to measure its success for instance if the company suffers a loss of customers that is likely to eat into the profit margin, the management can think of ways to reverse the trend and this can be done by further reduction in ticket prices or enhancing customer satisfaction. An example of a strategic decision made by the airline was to decide to operate just one type of airplane, Boeing 737s for the sake of keeping the operational, training and maintenance expenses low.

Tactical goal is another type of goals and this kind is mainly made for and by the middle level managers that are charged with supervising the work of first-line managers and implementing the decisions of those above them. Tactical goals are those that will ensure the long term and overall objectives of an organization are met and achieved. As I had indicated above the ultimate goal of

Southwest Airlines is to remain profitable but this is made possible by the ‘how to’ or tactical goals. For instance one of the steps that the Airline has taken is to do away with in-flight meals and introduce peanuts instead. Some of the other steps taken include flying between bigger cities which has meant that there is efficient use of fuel. The decision to do away with seat reservations has also meant that passengers who don’t show up on time can’t hold back the rest leading to delays.

Finally, operational goals are made for first-line employees and those that are not in management positions. They are concerned with daily activities such as fueling, ticketing, and loading of the airplanes. When this operational goals and tasks are well executed they enhance the ability of the Airline to meet the goals up the hierarchy.

According to Davis (1996) there are three types of planning that are important in the overall strategy of an organization: strategic planning, tactical planning and operational planning.

Strategic planning is concerned with prioritizing long term plans and that may involve looking at the mission and vision and the main objective of the organization in light of the external environment such regulation, competition, fuel prices (in case of an airline company).Strategic planning helps to deal with uncertainties and to minimize risks by anticipating them and developing mechanisms to contain them.

On the other hand, tactical planning has to do putting measure in place to implement decisions of the top management and supervising the work of subordinates to ensure that goals of an organization are being achieved.

Operational planning is concerned with the day to day maintenance activities performed at unit or departmental level as part of the overall strategic planning. An example can be a supervisor assembling his team of cleaners to come with a plan of how to do their work well and on time. The importance of this is that it enables the team to know what is supposed to be done and how it is to be done, results are also monitored and where possible adjustments can be made easily.

There are lots of factors that must be considered as it relates to formulation of strategy and key to these is that both internal and external factors play a key role. According to Carte r& Pucko (2010) leadership is a key factor in both formulation and implementation of a strategy. Leadership is important because strategy formulation is a top down process that requires leadership to set direction for the future. Thus if the leadership is poor the process is likely to be short –sighted and not very effective.

Organizational culture is another factor influences strategy formulation. Hrebniak (2006) found out that factors such as unclear responsibility, lack of information sharing, unaccountability and lack of proper structures of leadership in an organization can affect the process of formulation and implementation of strategy. A good organization is one where there is accountability, there is clear demarcation of power and roles .people feel like they are involved and they own the organisation.In such an arrangement it is easier to formulate policy because people are involved from the outset and they feel that it is part of what they are supposed to do .Manager would do well to open line of communication with those below them and seek their input when developing strategies to ensure that there is ownership of a strategy created.

The external environment also plays a great role in determining the formulation of strategy. One of the ways to analyze the external environment is the SWOT analysis. This where we look at the strengths, weaknesses, opportunities and threats that could be facing a given company. The SWOT analysis helps an organization to look at a list of possible threats and missed opportunities and come up with a strategy that can counter for the benefit of the organization

References

Cater, T., & Pucko, D. (2010). Factors of effective strategy implementation: Empirical evidence

from Slovenian business practice. Journal for East European Management Studies

Davis, J. (1996). Managing and achieving organizational goals. Watertown, MA: American

Management Association.

Herbiniak, L.G. (2006). Obstacles to effective strategy implementation. Organizational

Dynamics, 35(1), 12-31.