Describe the strategic planning process for an organization. Include legal and ethical considerations for each part of the strategic planning process.
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Strategic Planning and Capital Budgets – Write a 2000-2500 word essay addressing each of the following points/questions. Support your ideas with at least three (3) scholarly citations in your essay. Use strict APA guidelines to format the paper. The cover page and reference page do not count towards the minimum word amount and an abstract and table of contents are not necessary and if included are not part of the overall word count.
Describe the strategic planning process for an organization. Include legal and ethical considerations for each part of the strategic planning process.
Expert Answer and Explanation
Strategic Planning and Capital Budgets
One of the most vital roles of a manager in an organization is strategic planning. Effective planning allows an organization to accomplish its objectives and well as help people function effectively as a team. Waxman (2012) noted that every organization, especially healthcare facilities should have a strategic plan. However, several organizations often operate without a clear and defined strategic plan. A study by James (2022) found that about 86% of organizational leaders step less than an hour per month discussing their businesses’ strategic plan.
The study also found that 95% of workers do not even understand their organization’s strategic plan. Though many organizational leaders do not put the effort into developing strategic plans, having a strategy is beneficial to health business. Strategic plans make the organization more proactive by focusing on its future and preparing properly (Waxman, 2012). Strategic planning also improves operational efficiency and provides workers with a sense of direction. It also makes a business more durable and increases its profitability and market share. The purpose of this paper is to describe the strategic planning process for an organization and the ethical and legal considerations for each part of the strategic planning process.
The first step of a strategic plan process is determining the strategic position of the organization. This first step sets the foundation for all strategic planning processes. The organization needs to understand what they need and how it will achieve their needs to effectively develop a strategic plan (Abdel-Basset et al., 2018). For the first step to be effective, the organizational leader should involve all stakeholders including external and internal stakeholders. The manager should identify the key organizational issues by communicating with the organization’s top leadership, workers, and other stakeholders.
The manager should also include customers’ insights in this case the patients and their families and collect market and industry data. The information will provide the manager with the position of his organization in the market and customers’ perspectives about the business. It is also vital to review or create the organization’s vision and mission statements to provide the leadership and company staff with a clear image of success for the business (James, 2022).
Additionally, the core values of the company should also be reviewed to remind the manager about how the business plans to achieve the set objectives. In other words, the manager should use current/future demands, market and industry data, and customer insights to identify issues that should be addressed in the strategic plan. A SWOT analysis should also be conducted to identify the weaknesses, strengths, opportunities, and threats of the organization when determining its strategic position of the organization (Abdel-Basset et al., 2018).
The second step is prioritizing the objectives of the organization. Once the strategic position of the organization has been determined and understood, the manager should now determine the objectives that will help the organization achieve the planned goals (Waxman, 2012). The objectives should align with the vision and mission of the organization. The objectives should be made with the help of the organization’s stakeholders. Important elements should be considered when developing the objectives (Buehring & Liedtka, 2018). The elements include the most urgent initiatives, the initiatives that will help the organization achieve its vision and mission and improve its position in the market, and the most significant impacts.
The manager should also think of how competitors react, the goals that need to be achieved, and how to measure progress when developing and prioritizing objectives. The prioritized objectives should be clear, measurable, and distinct to help the manager reach the long-term initiatives and strategic goals outlined in the first step. The manager should then communicate the objectives with the stakeholders through its website, social media accounts, and other communication channels.
The third step is developing a plan to implement the determined strategic position. After developing and prioritizing the objectives, an implementation plan should be developed. In this step, the manager should determine the tactics needed to attain the organization’s objectives. The manager should then design a timeline for attaining the objectives and communicate the responsibilities clearly to the team responsible for implementation (Waxman, 2012). The manager can visualize the entire plan using a strategy mapping tool. The manager can also identify the gaps for improvement and view the business process from the top-down strategy maps.
Opportunity costs should be considered when developing the plan. initiatives that would not enhance the long-term strategic position of the company should be discarded. In this stage, the manager set goals by changing strategic objectives into specific performance issues (James, 2022). The key performance indicators that will effectively monitor and track the company’s ability to achieve its objectives will be defined. The manager should change the big ideas to actions that can be accomplished bit by bit. Lastly, the action plan for each goal is developed.
The fourth step is the implementation of the developed plan. Once the plan has been developed, the manager should be ready to implement it. Various activities should be conducted to ensure the effective implementation of the plan (Abdel-Basset et al., 2018). They include role assignment, training, and communication. The manager should first communicate the plan with the stakeholders to get their views about it and amend it where necessary.
The plan can be communicated through one-on-one boardroom meetings, emails, or other communication channels. During communication, the manager should use key performance indicators to communicate the responsibilities of the teams. The manager should ensure that the team clearly understands what is needed of them during the implementation process to avoid unnecessary confusion (Buehring & Liedtka, 2018).
The team should also be trained about the change and how it will impact them and the entire organization. Training will improve the team’s knowledge about the plan and thus increase the rate of its success. Lastly, regular reviews should be set up with the team and their managers to determine if they are still following the implementation plan.
The last step is reviewing the plan and revising it in case it needs any changes. In the last step, the manager should review the plan again and revise it to ensure it meets the vision and mission of the organization. Reviewing and revising the plan provides the manager with the opportunity to re-evaluate her course-correct and priorities based on past failures and successes (James, 2022). The manager should determine the KPIs she has made quarterly and design how the team can continue making new successes during implementation.
The strategic position should be re-evaluated every year to ensure that the organization is on track for success in the long run. The manager should track progress using balanced scorecards to execute strategic goals and properly understand the organization’s performance (Abdel-Basset et al., 2018). The manager can realize that the mission and vision of the organization need change during an annual review and revision.
Legal and Ethical Considerations
There are ethical and legal issues that should be considered during each step of the strategic plan development process. One of the ethical considerations is integrity. Integrity is the practice of conducting business activities honestly and ensuring that every person is treated fairly (Giuffrida, 2019). Stakeholders will automatically trust a business manager who has high integrity and treats people fairly. One of the key factors to an organization’s success is a relationship of trust between the company and its customers. The manager should be honest when reporting the weaknesses and strengths of the organization to gain the trust of stakeholders.
The second ethical consideration is avoiding influencing the views of customers and employees in the strategic evaluation of vital issues. The manager should let the stakeholders speak freely and express their minds about the organization. The manager should avoid being biased when conducting a SWOT analysis (Schiff et al., 2020). Another ethical issue is that the strategic position should reflect the core values of the organization. Negating the core values when determining the strategic position is unethical. The manager should let the stakeholders make decisions independently.
Fourth, the manager should acknowledge and understand that today’s workplace is full of people from diverse cultures (Schiff et al., 2020). Therefore, they should ensure that all stakeholders are treated with the respect they deserve when they select to interact with the company. During the planning strategic process, managers should consider the culture and beliefs of all stakeholders for them to be all-inclusive. Diversity in the process starts with recruiting people from diverse cultures to be part of the strategic plan implementation team.
The manager should ensure that every member of the team can work in a respectful working environment where their contributions are valued. The fifth ethical issue is about decision-making (Giuffrida, 2019). The manager should ensure that every person is included in the decision-making process at every step of the planning process. Some decisions should be made democratically to ensure that the majority have had their say and the minority their way. In other words, decisions made should be for the greater good of the company and its customers. Decisions that financially and personally harm people should be discarded before implementation.
Apart from ethical considerations, a manager should also ensure that the entire strategic planning process abides by legal regulations to ensure that it does not legally invalid. Communication of strategic plans occurs in many forms including press releases, marketing messages, and company meetings depending on the communication medium and the audience the manager intends to reach (Schiff et al., 2020). Most of the areas of communication in an organization are regulated by law. Thus, it is vital to understand the legal framework guiding business operations. One of the legal considerations is a disclaimer.
Service and product disclaimers protect organizations from potentially dangerous litigation in the event of misunderstanding and misuse by customers. Disclaimers can be used by organizations in a court of law to show customers that they were warned about the side effects of the service or product (Giuffrida, 2019). Some disclaimers are legal guidelines while others are included as a preventive measure in a court of law. The manager should provide a disclaimer of the products and services included in the strategic planning process to prevent unnecessary legal battles.
Another legal issue that should be considered in the process is disclosure. Legally, disclosures are similar to disclaimers but have less information. For instance, the manager should acknowledge any conflict of interest that might have risen when planning the strategic position of the organization (Giuffrida, 2019). Stakeholders should be able to understand the interest that might have impacted the decisions of the team. The third legal issue is a marketing communication. After the development of the strategic plan, it should be communicated to customers so that they can be familiar will the organization’s strategic position.
Therefore, the marketing team should ensure that they follow the legal guidelines regulating how company messages can be communicated to customers and other stakeholders (Schiff et al., 2020). The team should ensure that the regulations about marketing by the Federal Trade Commission and other agencies are adhered to strictly to avoid unnecessary legal challenges. The manager should ensure that the advertising claims are trusted and honest.
The fourth legal issue is reporting. The strategic planning process may involve financial reporting since it involves presenting data to investors formally. The manager should not use deceptive and misleading information about the company’s finances (Giuffrida, 2019). However, if the manager goes against financial reporting regulations, they risk lawsuits and even criminal charges. Financial reporting is one of the areas in business that are closely monitored and heavily regulated (Schiff et al., 2020). The last legal issue is about internal communication. The manager should avoid dishonest communications with employees to prevent lawsuits.
The strategic positioning of an organization can be planned by first determining the strategic position of the organization. The manager should ensure that they include both internal and external stakeholders in determining the strategic position of the organization. Second, prioritizing the objectives of the organization. The manager should work with the stakeholders to develop the objectives of the organization after determining a strategic position. Third, a plan to implement the determined strategic position should be developed. Fourth, the plan is implemented. Once the plan has been developed, the manager should be ready to implement it.
Lastly, the plan should be reviewed and revised to ensure that team is on track. There are ethical and legal issues that should be considered during each step of the strategic plan development process. The considerations include integrity, avoiding influencing the views of customers and employees in strategic evaluation of vital issues, developing the strategic position according to the values of the organization, and acknowledging and understanding that today’s workplace is full of people from diverse cultures, including people in the decision-making process.
Apart from ethical considerations, a manager should also ensure that the entire strategic planning process abides by legal regulations to ensure that it does not legally invalid. The legal considerations include a disclaimer, disclosure, marketing communication, reporting, and internal communication.
Abdel-Basset, M., Mohamed, M., & Smarandache, F. (2018). An extension of neutrosophic AHP–SWOT analysis for strategic planning and decision-making. Symmetry, 10(4), 116.
Buehring, J. H., & Liedtka, J. (2018). Embracing systematic futures thinking at the intersection of Strategic Planning, Foresight and Design. Journal of Innovation Management, 6(3), 134-152.
Giuffrida, I. (2019). Liability for AI decision-making: some legal and ethical considerations. Fordham L. Rev., 88, 439.
James, A. S. (2022). Strategy and Strategic Planning in Healthcare: Are They Dead or Alive?.
Schiff, D., Biddle, J., Borenstein, J., & Laas, K. (2020). What’s next for ai ethics, policy, and governance? a global overview. In Proceedings of the AAAI/ACM Conference on AI, Ethics, and Society (pp. 153-158).
Waxman, T. (2012). Financial and business management for the doctor of nursing practice. Springer Publishing Co.
7 steps involved in the strategic planning
Strategic planning is a structured process that organizations use to define their goals, set priorities, and make decisions about resource allocation. Here are seven key steps involved in the strategic planning process:
- Environmental Analysis:
- Begin by conducting a thorough analysis of the external environment. This includes assessing factors such as market trends, industry competition, regulatory changes, economic conditions, and technological advancements. Understanding these external influences helps organizations identify opportunities and threats.
- Internal Assessment:
- Evaluate your organization’s internal strengths and weaknesses. This involves examining your resources, capabilities, workforce, infrastructure, and current performance. Identify areas where your organization excels and where improvements are needed.
- Mission and Vision Development:
- Define or revisit your organization’s mission statement, which outlines its core purpose and reason for existence. Concurrently, establish a compelling vision statement that describes the desired future state or long-term goals. These statements serve as the guiding principles for your strategic planning efforts.
- Goal Setting:
- Based on the environmental and internal assessments, set specific, measurable, achievable, relevant, and time-bound (SMART) goals. These goals should align with your mission and vision and address the key issues and opportunities identified earlier.
- Strategy Formulation:
- Develop strategies to achieve your established goals. Strategies are high-level plans that outline the approach your organization will take to accomplish its objectives. Consider various options, such as market expansion, cost reduction, product innovation, or partnership development.
- Action Planning:
- Break down your strategies into actionable steps and initiatives. Create detailed action plans that specify who is responsible for each task, what resources are required, and when each action should be completed. These plans help translate high-level strategies into practical actions.
- Monitoring and Evaluation:
- Establish a system for monitoring and evaluating the progress of your strategic plan. Regularly track key performance indicators (KPIs) and milestones to gauge how well your organization is executing its strategies. Make adjustments as needed to stay on course and respond to changing circumstances.
It’s important to note that strategic planning is an iterative process. Once a strategic plan is implemented, organizations often revisit and revise it regularly to adapt to evolving conditions, incorporate new information, and ensure continued alignment with their mission and vision. Effective strategic planning helps organizations stay focused, make informed decisions, and work toward their long-term objectives.
10 Strategic planning examples
Here are 10 examples of strategic planning in different contexts:
- Business Strategic Planning:
- A retail company decides to expand its market presence by opening new stores in emerging markets. The strategic plan includes market research, site selection, supply chain optimization, and marketing strategies to support the expansion.
- Nonprofit Strategic Planning:
- A nonprofit organization dedicated to education develops a strategic plan to increase its impact. This includes identifying key educational challenges, setting goals for the number of students served, fundraising strategies, and partnerships with local schools.
- Healthcare Strategic Planning:
- A hospital conducts strategic planning to enhance patient care. The plan includes upgrading medical equipment, hiring additional staff, improving patient experience, and expanding services in response to community health needs.
- Government Strategic Planning:
- A municipal government creates a strategic plan to revitalize its downtown area. This involves infrastructure upgrades, zoning changes to encourage business development, public safety improvements, and community engagement initiatives.
- Educational Institution Strategic Planning:
- A university develops a strategic plan to enhance its research capabilities. The plan includes faculty recruitment, investment in research facilities, collaboration with industry partners, and fundraising campaigns to support research projects.
- Technology Company Strategic Planning:
- A tech startup crafts a strategic plan to gain a competitive edge in the market. This involves product development, marketing strategies, talent acquisition, and financial planning to secure funding for growth.
- Environmental Organization Strategic Planning:
- An environmental conservation group creates a strategic plan to protect a threatened ecosystem. The plan outlines conservation efforts, public awareness campaigns, fundraising strategies, and collaboration with government agencies and other conservation organizations.
- Manufacturing Company Strategic Planning:
- A manufacturing company aims to increase efficiency and reduce costs. The strategic plan includes process optimization, lean manufacturing initiatives, workforce training, and quality control measures.
- Financial Institution Strategic Planning:
- A bank develops a strategic plan to expand its digital banking services. The plan includes investing in technology, cybersecurity measures, customer education, and marketing to attract digital-savvy customers.
- Retail Chain Strategic Planning:
- A fast-food restaurant chain creates a strategic plan to enter international markets. This involves market research, localization of menu offerings, supply chain adjustments, and establishing partnerships with local suppliers.
What are the ethical considerations in strategic management?
Ethical considerations in strategic management are critical for organizations as they shape the decisions and actions taken to achieve long-term goals and objectives. Ethical behavior is essential not only for legal compliance but also for maintaining trust, reputation, and social responsibility. Here are some key ethical considerations in strategic management:
- Transparency and Honesty:
- Organizations should be transparent and honest in their strategic communications. This includes providing accurate information to stakeholders, customers, employees, and investors. Misleading or false information can damage trust and reputation.
- Fairness and Equity:
- Strategic decisions should be made with a commitment to fairness and equity. This means considering the impact of decisions on all stakeholders, including employees, customers, suppliers, and the broader community. Avoiding discrimination and ensuring equal opportunities is essential.
- Corporate Social Responsibility (CSR):
- Ethical strategic management involves considering the social and environmental impact of business activities. Organizations should strive to minimize negative externalities and actively engage in CSR initiatives that benefit society and the environment.
- Conflict of Interest:
- Identify and manage conflicts of interest within the organization. Ensure that strategic decisions are made in the best interests of the organization and its stakeholders, rather than for personal gain.
- Sustainable practices should be integrated into strategic planning. This includes sustainable sourcing, environmentally friendly production methods, and efforts to reduce waste and emissions.
- Ethical Leadership:
- Ethical leadership at all levels of the organization sets the tone for ethical behavior. Leaders should demonstrate integrity, ethical decision-making, and a commitment to ethical values in their actions and decisions.
- Protection of Stakeholder Interests:
- Strategic decisions should prioritize the interests of stakeholders, including employees, customers, investors, and the broader community. Balancing these interests is critical for ethical management.
- Compliance with Laws and Regulations:
- Organizations must ensure compliance with all relevant laws and regulations. Ethical management includes going beyond legal requirements to meet higher ethical standards.
- Data Privacy and Security:
- Protecting the privacy and security of customer and employee data is paramount. Ethical strategic management involves robust data protection measures and transparency in data handling practices.
- Whistleblower Protection:
- Establish mechanisms for employees and stakeholders to report unethical behavior or concerns without fear of retaliation. Whistleblower protection is crucial for identifying and addressing ethical issues early.
- Avoiding Harmful Products or Practices:
- Ethical organizations refrain from producing or promoting products or services that can cause harm to individuals or society. This includes avoiding deceptive advertising and harmful production practices.
- Long-Term Perspective:
- Ethical strategic management takes a long-term perspective, aiming for sustainable growth and value creation over short-term gains that may harm the organization or its stakeholders in the long run.
- Ethical Supply Chain Management:
- Organizations should ensure that suppliers and business partners adhere to ethical and responsible business practices, including labor and environmental standards.
Incorporating these ethical considerations into strategic management not only helps organizations operate with integrity but also contributes to their long-term success and the well-being of all stakeholders. Ethical behavior in strategic decision-making is an investment in trust, reputation, and social responsibility.
Strategic planning process with examples
The strategic planning process is a structured approach that organizations use to define their long-term goals, make decisions, allocate resources, and create a roadmap for success. Below are the key steps of the strategic planning process, along with examples to illustrate each step:
- Vision and Mission Statement:
- Step: Begin by defining or revisiting the organization’s vision and mission statements.
- Example: A technology company’s vision statement might be “To be a global leader in innovation,” and its mission statement could be “To provide cutting-edge solutions that improve people’s lives through technology.”
- Environmental Analysis:
- Step: Conduct a thorough analysis of the external environment, including market trends, competitors, and regulatory changes.
- Example: A healthcare provider analyzes demographic shifts and changing healthcare regulations to understand how they impact service delivery.
- Internal Assessment:
- Step: Evaluate the organization’s internal strengths and weaknesses.
- Example: An educational institution assesses its faculty expertise, infrastructure, and financial resources to determine its internal capabilities.
- Setting Objectives and Goals:
- Step: Define specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with the organization’s mission and vision.
- Example: A nonprofit organization sets a goal to increase its outreach by 20% over the next fiscal year to better serve its target community.
- Strategy Development:
- Step: Formulate strategies to achieve the established goals. These strategies should outline the approach to be taken.
- Example: A retail company develops a strategy to expand its e-commerce presence and reach new customer segments through digital marketing and online sales.
- Action Planning:
- Step: Create detailed action plans that break down strategies into specific tasks, responsibilities, and timelines.
- Example: A manufacturing company creates an action plan that includes tasks such as upgrading machinery, training employees, and implementing quality control measures.
- Resource Allocation:
- Step: Allocate resources, including finances, personnel, and technology, to support the implementation of the action plans.
- Example: A government agency allocates funding to various departments based on their strategic priorities, such as education, healthcare, or infrastructure development.
- Implementation and Execution:
- Step: Execute the action plans and strategies, closely monitoring progress and making necessary adjustments.
- Example: An IT company launches new software products, conducts marketing campaigns, and tracks sales and customer feedback to gauge progress.
- Monitoring and Evaluation:
- Step: Continuously monitor key performance indicators (KPIs) and evaluate whether the organization is on track to meet its objectives.
- Example: A restaurant chain regularly reviews customer satisfaction scores, sales figures, and food quality to assess its progress.
- Feedback and Adaptation:
- Step: Gather feedback from employees, customers, and stakeholders and use it to adapt strategies and action plans as needed.
- Example: A nonprofit organization receives feedback from beneficiaries and adjusts its programs and services to better meet their needs.
- Review and Reassessment:
- Step: Periodically review and reassess the organization’s strategic plan to ensure it remains relevant and aligned with changing circumstances.
- Example: A financial institution conducts a biannual review of its strategic plan to account for shifts in market conditions and regulatory changes.
- Communication and Alignment:
- Step: Communicate the strategic plan and its progress to all stakeholders, ensuring alignment throughout the organization.
- Example: An educational institution holds regular meetings with faculty and staff to update them on the progress of its strategic initiatives and gather input.
The strategic planning process is an ongoing cycle that helps organizations adapt to changing environments, achieve their long-term goals, and stay competitive in their respective industries. It serves as a roadmap for decision-making and resource allocation, guiding organizations toward success.