Strategic Business Planning: Goals, Policies, and Procedures

The plan is to score goals, defining the strategy of the company to get policies and establish criteria for decision-making.

Classification of Plans by Their Nature

• Goals: Fundamental aims pursued by the company.
• Objectives: Involve the whole company in their attainment. We also consider the sub-objectives relating to the company, more specific, that affect specific areas.

When defining the objectivity of the company, the following should be taken into consideration:

• Objectives should be realistic.
• Priorities should be set among different sub-objectives and objectives.
• Accomplishment costs should be minimal.
• The number of unintended consequences should be minimal.

• Policies: Principles that serve as a guide in making decisions in the company and mark their performance limits.
• Procedures: Each of the steps to perform an action.
• Rules: What can and cannot be done in the company.
• Estimates: The mathematical expression of the plans. They prevent the need for money for written plans to face marked plans.

Classification of Plans by Time Dimension

• Long-Term Plans (L/P): Contemplated for achievement in a period exceeding 5 years. Often referred to as structural aspects of the company, such as new investment plans for machinery.
• Medium-Term Plans (M/P): For a period exceeding one year or less than 5. This refers to the act of the departments of the company.
• Short-Term Plans (C/P): Limited to the economic exercise (1 year). These are immediate plans.

Stages of the Planning Process

1. Analysis of the Starting Situation: Current situation of the company and its environment, and analysis of opportunities and resources.
2. Setting Objectives: Objectives and sub-objectives are marked.
3. Determination of Alternatives or Courses of Action: Different paths to achieve objectives.
4. Evaluation of Alternatives: Strengths and weaknesses, costs, risks.
5. Choice of One of the Alternatives: Control deviations. The chosen alternative may not evolve as expected, there will be a need to analyze deviations and make corrections.

Organizational Models

Linear or Hierarchical Model

Based on the principle of command, each person is immediately subordinate to a superior. It is a rigid structure, particularly for SMEs.

Advantages: Simplicity and ease of understanding the model.

Disadvantages: Lack of specialization of management, excessive concentration of authority, and lack of motivation of subordinates.

Functional Model

Characterized by the existence of specialists. Lower levels are connected to different bosses, each a specialist in an area.

Advantages: Employees are dedicated only to their specialty and direct communications.

Disadvantages: The ability to receive orders from different heads can create conflicts if they are contradictory.

Line and Staff Model

A mixture of the two previous models, it has a hierarchical structure, but with the support of advisory departments.

Disadvantages: Slow decision-making due to specialist intervention.