Mgt 521 - Strategy and Planning Paper

Strategy and Planning Paper

Management / MGT 521

January 2016

Strategy and Planning Paper

The business world is forever evolving, which means that organizations that want to stay relevant need to understand the importance of goal setting and establishing a business plan. Many companies fail within the first few years for various reasons, which include lack of funds, poor management, and lack of planning (Schaefer, 2016). A goal according to the Business Dictionary is "An observable and measurable result having one or more objectives to be achieved within a more or less fixed timeframes" (" Goal," 2016). A company owner may think that his or her company is small, and planning is not needed. However, a person who wants to succeed understands the need to sets goals and revisits those goals periodically to ensure that he or she is still on track. Goals offer a clear and concise view of the company’s direction and destination of where the organization is moving. Establishing short-term and long-term goals with deadlines and quantifiable measure is also important. Organizations that are successful such as Amazon® understand the need for goals, planning, and factors that assist in developing an effective business plan. Additionally, it is important to know when to make changes in the business plan to ensure the company maintains a competitive edge.

Types of Goals

Goals can also be called objectives, which are particular commitment to reach a quantifiable result within a specified timeframe. There are three types of goals, which are arranged in hierarchy order from high-level to low-level of accomplishments.

Strategic

Strategic goals focus on objectives for the whole organization, which are set by upper management (Kinicki & Williams, 2016). The organization’s strategy should be closely connected to the company’s vision and should answer what are the company’s short and long-term objectives and does the company have the needed competencies to achieve the desired goals (Cater & Pucko, 2010).

Amazon’s® chief executive, Jeff Bezos told his shareholders that his strategy is different from other companies, as their focus is on the long-term goals. Amazon® has been faithful in managing their long-term approach, and the company remains one of the world's leading companies with stocks that have soared over 12,000 percent since it went public (Stewart, 2011). Bezos's vision is to create a company that they can tell their grandchildren about, and they have succeeded. The current goal is delivering higher margins and profits, which “Bezos timeframe consists of a 10 to 20 year that means anywhere between 2020 to 2030” (Stewart, 2011).

Tactical

Tactical goals are set by middle managers and are focused on the needed actions to achieve the strategic objectives, which are passed down to first-line managers and employees to implement the established goals (Kinicki & Williams, 2016). Tactical goals help the company achieve their long-term and overall objectives; such as Bezos ultimate goal is to increase Amazon’s® profit margins, which can be possible if the company focuses on the “how to” or tactical goals. Amazon’s® focus to achieve this is by adding new services and products that compete with other e-reader and video streaming companies (Stewart, 2011). The above organization understands the need to have goals and that to achieve those goals the organization, as a whole needs to be involved, which includes all employees, and managers from top management to lower management.