Conducting Of An Organisational Strategic Audit

Published Date: 02 Nov 2017

The quest of aggressiveness is at the core of strategic management and the decisions taken in developing and adopting the process of strategic management process. There exist competitions among the firms to obtain entrée to the resources required to generate super normal profits and to provide the best level of satisfaction to the stakeholders of the firms in competition. Efficient utilization of the inter-reliant components of the strategic management process that ends in opting the course of action for the firm and will pursue and the resources it consumes to attain the wanted results of tactical competitiveness and above-average returns (Veliyath R. and Fitzgerald E. 2000).

The purpose of the strategic management process to be a rational approach to help the company to respond effectively to the challenges of 21 at the competitive landscape. This process calls for the company to audit the behavior and internal and external environment to identify opportunities and threats in the market and determine how to use the primary mandate is to seek to achieve the desired strategic results. With this knowledge, the company forms strategic intent so that they can take advantage of the resources, capabilities and core competencies and win battles and competitive in the global economy. Flow from the strategic objective, strategy and mission determine, in writing, and the company plans to produce products and markets that will benefit when. This review provides an organizational foundation for its strategy for the formulation and implementation of strategies. Both develop and implement strategies is crucial to achieve strategic competitiveness and achieve above average returns (Hitt, Irelang, & Hoskisson, 2001).

IMPORTANCE OF BUSINESS STRATEGY

Reasearches have exposed that firms following strategic management have exceeded those that do not. Strategic planning to ensure rational allocation of resources and improve coordination between the various sections of the organization. It helps managers to think ahead and anticipate problems before they occur Acur N. and Bititci U. (2004). The major advantage of the planning process is a unremitting discourse about the organization’s potential between the level of chain of commands in a firm. In short, the major advantages of strategic management are (Hitt, Irelang, & Hoskisson, 2001):

Description of the organization strategic approach

To measure what is important to focus strategically

To make better understanding of the rapidly changing business environment

STRATEGIC VS TACTICAL PLANNING

When we want to create a strategic plan we are required to follow a strategic planning process. This process consists of several main significant activities. Various people name these activities differently in accordance with their requirements. It is not necessary to conduct these major steps in the process in a unique order. Uses of various key terms are also included in the process of strategic planning (Olson, 2007).

Strategic planning can be defined as a synchronized and organized progression for budding a plan for the general direction of our enterprise for the intent of optimizing imminent potential (Olson, 2007).

Strategic planning incinerates large amounts of wherewithal in the nonprofit world annually. These resources or means can be time and riches, workforce, energy, paper, electricity, and the use of meeting rooms, food preparation, and other resources associated to the process (Peggy M. Jackson, 2007).

It is useful to distinguish between strategy and tactics so that managers can focus on strategic tasks themselves rather than engaging in tactical missions. Scope of regulatory decisions across the spectrum, there is a key strategy and wide at the end of one minute and tactics in the other Drejer A. (2000). The main point of distinction between the strategic planning and tactics is that in strategic planning it is decided that what main plans will be selected and then resources are allocated to them while in tactics we decide on the ways and means to previously selected plans are executed. Other than this major difference, many other differences are there which can be better understood by analyzing military use of strategy and tactics (Peggy M. Jackson, 2007).

Carl von Clausewitz, Prussian army general and military world, and the military strategy known as' the advantage of fighting in the promotion of war and tactics as' the use of armed forces in battle. 'back to Clausewitz, Count von Moltke is more pronounced in making the distinction between strategy and tactics (Peggy M. Jackson, 2007).

He states that:

"Strategy is a system of makeshifts. It is carried through an originally conceived plan under a constantly shifting set of circumstances. Strategy furnishes tactics with the opportunity to strike with the prospect of success. It does this through its conduct of the armies and their concentration on the field of battle. On the other hand, however, strategy concept accepts the results of every single engagement and builds on them. Strategy retires when a tactical victory is in the making in order later to exploit the newly created situation"

(Peggy M. Jackson, 2007).

The essential aim of stratagem therefore is to smash the spirit of the army, divest him of the course to battle, dwell in his region, devastate or get oppress of his possessions or else make him surrender. The ambition of tactics is accomplishment in a specified feat which is assigned to a military actions (Peggy M. Jackson, 2007).

Another difference between the is made on the basis of delegation of authority and power of decision making. Strategic Planning does not delegate the power of decision making and authority delegation to the lower level where as in tactics the levels are not identified towards achieving common goals (Peggy M. Jackson, 2007).

Till now the distinction between the two was elaborated in terms of military sense. But the business word is entirely different arena from the war. In business they are not only related to the objectives and course of actions but as well as the competitors of the business firms. Therefore, it is felt necessary to make distinction at this point in terms of business terminologies (Peggy M. Jackson, 2007).

Level of Conduct.

Strategy is developed at the highest level of management whereas the tactics are adopted at the lower level of managements in order to achieve the set goals and objectives for a business organization by the management of the organization (Olson, 2007).

Periodicity.

The strategy formulation is both discrete and continuous but the timings of the decision is always irregular. Why because it depends on the availability of the opportunities, development of ideas, crisis, innovative steps introduced by the management and other non-routine stimuli (Yip G. 2004). On the other hand Tactics is indomitable on a intervallic basis by diverse organizations. It may be followed by a specific timetable for this purpose, for example, the preparation of budgets at regular intervals (Olson, 2007).

Time Horizon.

Strategies are developed for the long time usually and are followed in the long run by the firms. Occasionally they are developed for shorter periods. Therefore on the basis of the nature of the strategies the time horizon for them is flexible; however, emphasis is on long run. On the other side, time horizon for the tactics is definite. It is usually shorter period of time case. The duration for various tactics are uniformed for example budgets (Olson, 2007).

Uncertainty.

In strategy formulation the element of uncertainty is more than that of tactics. Infact, strategic nature decisions are taken in partial darkness. Whereas for tactics, pathway is already set by the strategic planning process. Therefore, tactical decisions are more certain within the framework of strategic planning process. Thus, evaluation of tactics is easier as compared to evaluation of a strategy (Olson, 2007).

Subjective Values.

The formulation of stratagem is influenced significantly by the personal values of the person carrying out the strategic planning process. On the other hand, tactics is customarily does not influence by the personal values of the person carrying tactical planning in the context of the already developed and formulated strategies (Olson, 2007).

Importance.

Strategies are most imperative dynamics of organization because strategies are concerned with the future course of action for the organization as a whole. On the other hand, tactics are of less worth because their job is to deal with the certain area of the organization. This difference is simple but equally important for the managerial action view point (Olson, 2007).

STRATEGIC PLAN & ITS COMPONENTS

There are different frameworks to think about and use, while we were working on the development of our strategic plan. Thinking in different frames and lenses through which to view the strategic planning process. We do not always look through two or three lenses at one time. Usually use one at a time, and often may not know that we are using certain frameworks are included in our process. If we were trying to explain to us how the planning team a piece of the puzzle fit together first we must understand the following components of the strategic plan Hitt, M. A., Irelang, R. D., & Hoskisson, R. E. (2001).:

Strategy and culture: Our organization’s ethos is made up of folks, procedures, understandings, beliefs, and stance. Our wile is where our organization is president, what way it goes, and how it reaches at a position. Strategy and culture are impossible without each other. Culture is like our house and if the culture Is out of order, success cannot be achieved no matter how best strategy has been designed formulated and implemented.

Internal and external: Like strategy and culture, an internal and external framework is also equally important for the strategic plan. The strategy is external. We collect important amount of information which is meaningful in making decision from our external environment. It includes customers, competitors, industry, and environment to identify our opportunities and threats. The internal environment of the organization is equally important through which significant piece of meaningful information is collected and it includes employee surveys, board assessments, and financial statements (Thomsen S. 2004).

The Balanced Scorecard perspectives: The Balanced Scorecard is a edifice employed to exploit aspiration and objectives in four different areas and these incluede financial, customers, internal business processes, and people. The financial, internal business processes, and people areas are internal. The customer area is external.

Market focus: The development of the firm and its growth depends upon the nature of the attention we give to our customers and the market where the firm is operating. If the customers and markets are not focused in the strategy year after year than the growth and development is stopped. Hence the strategic plan also focuses on customers and is a framework of the market actions we take for business growth.

Where are we now? Where are we going? How will we get there?: Because it’s easy to confuse how all the elements of a plan come together and where they go, this framework is a simple, yet clear way of looking at the whole plan.

SWOT ANALYSIS

To assess the particular strengths, weaknesses, opportunities, and threats that are strategically important to our organization. To move from where we are today to where we want to go, we have to determine our strategic position, where we stand today. It’s kind of like taking our bus into a mechanic for the annual tune-up. We get an assessment of what are working, what’s not, the things we need to fix, and the things that can wait. Organization’s strengths encompass everything our company does well, including capabilities, skills, and resources we can leverage and draw on to execute plans and actions in our company. Weaknesses, conversely, encompass everything that’s holding our company back from achieving our goals or serving our customers.

RESOURCE REQUIREMENT

From a strategic perspective, we need to look at what tangible assets we have versus what we need to achieve we strategic plan. We may need to come back to this section after we’ve developed more of we plan. But taking stock of where we are now can be helpful in we planning process. Specifically, we need to look at:

What tangible assets we have in we company right now that allow we to produce we product or service

What tangible assets we need to continue to provide and exceed we current service levels.

There are various types of resources. These may include Financial Resources - These resources include all the items available to finance or pay for we strategic decisions. Existing resources include cash balances, lines of credit, other loans, owner’s equity, and credit agreements with we vendors; Physical Resources i.e. physical resources include everything we have and use to deliver we products and services; and Intangible Resources are everything that we can’t touch or feel but that we know has value to we business.

.