Strategic planning begins with the definition of the company’s mission, which is an important aspect to the organization in distilling and synthesizing the organization’s strategic plan. The mission guides the employees and management towards focusing their efforts in the concrete objectives and measurable goals in terms of timelines and quantities. This is important because it enables employees and management in evaluating pace development and progress. However, for this to be achieved, the employees in all the departments should be included in every aspect of responsibility and how their activities fit into the organizations strategic plan.
This is the analysis of the macro environmental factors in an external environment of the organization. The trend analysis consists of analyzing the political, economical, technological, social, and demographic trends. However, Allison and Kaye (2011) lamented that when developing a strategic plan, it is important to identify the relevant factors that are influenced by these trends. Trends cannot be controlled, therefore, it is important to develop a strategic plan in reference to the current and future changes and how to cope with these changes.
The political factors include the degree to which a government intervenes in an economy in areas such as trade restrictions, tariffs, tax policies, environmental law, and political stability. According to Hill and Jones (2009), the government also influences goods and services that it wants provided and those that it prohibits and consequently its strategic plan. Furthermore, infrastructure, education, and health of a nation are greatly influenced by governments.
Economic factors such as interest rates, inflations rates, exchange rates, and economic growth have great impacts on an organization’s decision-making and operation. For example, Hill and Jones (2009) noted that the interest rates affect the organization’s cost ...Show more