How 2 Make Business

Through strategic planning, organizations identify what business they should be in and the basic purpose of the organization. They develop plans for implementing policies and strategic.

Strategic planning must take into account environmental variables, and organizations that omit strategic planning or ignore the environment risk serious problems or failure. A vital first step in the planning process is development of a written mission statement.

Many managers consider the business or purpose of the organization too obvious to state or to commit to writing. But because of its key role in planning, the mission statement should be in writing, and because the environment changes, the mission statement should be reviewed annually.

Finally, the mission statement should identify the product or service, the market, and the technology used by the firm.

The fundamental intentions of the organization, an identified in the mission statement, must be translated into strategic objectives in those areas that affect overall success. That is, in those areas where the organization must get results to remain viable.

Corporate strategies are established by top executives for broad areas of the firm and for a time horizon of five years.

Middle-level managers must then translate these broad objectives into business strategies for the divisions of the firm. Functional managers must develop functional strategies to operational corporate and business strategies.

Strategic planning at these three levels is iterative and interdependent.

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