Strategic planning in organizations

Strategic Planning in Organizations

The Political Decision-Making Model

The political decision-making model entails a company's relationship with its stakeholders. The aim is political rationality; a consensus that is acceptable to both stakeholders and the company involved. Although the process may initially be "messy," sorting through the issues involved will help the company and its stakeholders arrive at a suitable solution that is ultimately at a high standard of rationality.

Making political decisions is part of the life of an organization; particularly in the case of large organizations with many stakeholders. Communication and compromise are at the heart of this process. These processes then culminate in either broad-based or specific compromises that cover a variety of issues.

In terms of strategic thinking, stakeholders are often the most important part of a company's operations. Because stakeholders are at the heart of a company's survival, political decision making is vital in this regard. Stakeholders might, for example, include investors in the company, customers, regulating agencies, and the like.

Specifically, political decisions might involve issues such as environmentally or socially sound practices. Indeed, social responsibility has become a very important component of corporate decision making. Customers are more likely to trust a company that proves itself to be an entity that cares about preserving the environment and promoting social issues. These involvements are political in nature, as they are positioned in order to create a certain public image for the company. A company that invests a substantial amount of its profit margin into worthy causes has a public image of caring and responsibility.

The sincerity of these decisions is also important, as dishonest companies that use such actions for its own gain are usually exposed in the long run.

Organizational Mission

The organizational mission refers to the purpose of a company; its reason for existing and for doing what it does. The vision works in direct concomitance with the mission, to clarify what the company should look like and how it should behave to fulfill its mission. In order to prevent the confusion of the mission with what an organization does, it is useful to construct a clear mission statement.

The mission statement is an important strategic move when considered both from the internal and external viewpoints of the company. Internally, a mission statement promotes the enthusiasm and commitment of workers. Employees also experience a greater sense of meaning in their work when they know how their specific tasks relate to the mission statement of the company.

In terms of the external environment, most companies consider it a strategically wise move to make their mission statements publicly available. This is popularly done on the Internet, where a company's "about us" page generally also includes the mission statement, among other information. Being presented with the philosophy behind the company's work as summarized in the mission statements, stakeholders can also link to companies whose ethics and values reflect their own. Furthermore, a good mission statement provides external validity for customers.

All companies that I ever researched on the Internet has some form of a mission statement. The most significant are those by non-profits and educational institutions, and care providers. These mission statements generally include information regarding the humanistic values that drive the work of these companies. A primary school, for example, might concern itself with the education of the youth in a manner that is consistent with the state and country standards of education, while also providing a nurturing environment to the youngsters.

Organizational Mandates

Organizational mandates refer to the authoritative basis for a company's actions. Companies today are all subject to certain laws, regulations, articles of incorporation, and so on. These mandates concern a wide variety of company operations, including the assurance of fair competition and financial honesty.

There are both formal and informal mandates. The formal mandates have been mentioned above, and concern formal rules and requirements by authorities. Informal mandates, in turn, are concerned with the norms and expectations of key stakeholders such as elected officials. There could be certain specific rules and regulations required or expected by these authorities, which a company must comply with.

Customers can also dictate mandates, such as that a product must be of a certain quality if a certain price is expected for it, and so on. Good customer service is an example of this, where company employees are expected to liaise with customers in a friendly and helpful manner. Another example of informal mandates is where citizens voted for a government official, who is now obliged to fulfill the promises he made during his election campaign.

Mandates also concern actions that are prohibited, such as financial dishonesty, sexual harassment, or other forms of immorality. Companies are generally expected to be honest about their financial dealings.

Enron is perhaps the most famous example of a company that did not fulfill its financial mandates. Both the public, stakeholders, and law making officials were horrified at the scale of the deception perpetrated by this company. The damage to such a company's reputation is often beyond repair once deception has come to light. It is therefore a good idea to regularly review and revise the company mandates and make all members aware of them.

Organizational Strategy

Organizational strategy refers to the purposes, policies, programs, actions, decisions, and resources a company uses to define its actions and the reasons for these actions. Strategies can vary on the basis of several elements, including level, function and time frame. The main feature of an organizational strategy is the fact that rhetoric, choices, actions and consequences are linked into a coherent and consistent pattern.