Setting Business Goals and Strategies

Identify the purposes or business goal setting and the three levels of goals.

     Goals provide businesses with direction and guidance, assist in the allocation of resources, help define the corporate culture, and enable managers to assess performance. Long&-term, intermediate, and short term goals refer to plans for various periods of time, from five years or more into the future to less than one year hence. The board of directors sets long&-term goals in conjunction with top management. Middle managers work with top managers to set intermediate goals and with first&-line managers to set short&-term goals.

Describe the process by which successful strategic plans are formulated.

     Formulating strategy is a multistep process. First, strategic goals are set. Next, environmental threats and opportunities and corporate strengths and weaknesses are assessed. Finally, the environment and the company are matched.

Discuss the three levels of strategic plans.

     Strategic planning is needed on the corporate, business, and functional levels. Corporate strategy is concerned with the industries in which a firm decides to compete. The growth&-share matrix is a common tool for analyzing the strengths and weaknesses of businesses within a corporation. Business&-Level strategies are concerned with achieving the goal of each business or related set of businesses within a corporation. Strong growth, slow growth, retrenchment, and transformation are four common business strategies. Functional strategies address a firm's marketing, finance, production, human&-resource, and research and development activities.

Distinguish between tactical and operational plans and indicate how each can be used to implement strategic plans.

     TacticaL plans are short&-run and intermediate plans that parallel strategic goals, but on a narrower scale. They are more specific than strategic plans and call for certain managers to take action. Operational plans relate to the event that the activities that must be completed to further the firm's tactical and strategic plans. Contingency &-planning can help in the event that the business or market changes, while plans for crisis management can help firms cope with emergencies.

Explain how management by objectives assists in the planning process and describe how the barriers to successful planning can be surmounted.

     Management by objectives assists in the planning can be by getting subordinates and their supervisors to set clearly defined agreed&-upon goals for the short run that are consistent with the company's broader, long&-run goals. Top managers can overcome the barriers to successful planning by stating the company's goals clearly and concisely, by communicating with those who will be affected, and by recognizing the limits of planning.