The importance of planning in business management

Extract

[...] The four grand strategies, which include growth, stability, retrenchment, and combination, (Robbins & Decenzo 103) can be implemented based on the results of a SWOT analysis. This is very important because it gives managers a chance to really understand the major strategy that the company should employ. In order to be a successful entrepreneur, an individual must be willing to understand his or her competitive advantage, he or she must be able to adapt to change, and acquire new knowledge and constantly use that knowledge towards improving the business (Robbins & Decenzo 111). [...]

[...] Plans and the strategies that organizations develop are essential tools towards understanding a company's mission statement and giving employees as well as managers a sense of purpose. Without plans, different opinions and clashing strategies can result in major communication and service mishaps, inefficiency, low employee moral, and eventually, the failure of a company. All companies, large and small, should use formal plans that suit their needs and give their employees and managers something worth striving for. Bibliography Robbins, Stephen P. & David A Decenzo. “Fundamentals of Management: Essential Concepts and Applications.” New Jersey: Prentice Hall, 2005. [...]

[...] For example, a manufacturing business that produces toilet paper has a steady demand throughout the year, and there is not much volatility in the market. A very careful, well-developed, and relatively rigorous plan can be developed for this sort of company, since managers can predict and forecast the business with a great deal of accuracy. In other sectors, such as technology, changes occur so frequently and many opportunities, strategies, and changes are impossible to predict. Rigorous plans can often fail in this sort of business because competitors with more flexible plans will be able to take opportunities and makes moves that are more difficult for a company with a rigorous plan. [...]

[...] Tactical plans stress details, and they are made with an eye towards being practical and flexible. They are much easier to change and are dealt with more frequently than long-term, strategic plans. Because different organization have different needs, it is important to ensure that the overall plans created for each particular organization are tailored towards that organization. Many environmental factors as well as the overall nature of the business must be taken into account before such a decision can be made. [...]

[...] Often, this is not the case, and a lot more though and effort must be put into a plan before it can be successful. MBO, or management by objectives, is one way to create an effective plan for a very complex organization. Defined as system in which specific performance objectives are jointly determined by subordinates and their supervisors, progress toward objectives is periodically reviewed, and rewards are allocated on the basis of that progress,” (Robbins & Decenzo work for large organizations because it is extremely flexible all takes all the organizational needs into account. [...]