Strategic Plan Paper
Astrategic plan when adopted is an imperative tool that guides thework of many companies and organizations and also assist inmaintaining an elaborate, long-term focus of an enterprise`s missionand vision. Strategic planning also helps in decision-makingespecially when it comes to the allocation of human and financialresources. In this case, this paper identifies and explains variablesand aspects of strategic planning that are key drivers for developinga strategic plan for Riordan Manufacturing.
Environmentalscanning involves monitoring and evaluating of information from boththe external and internal environment. As such, Riordan managementneeds to scan both in order to identify opportunities, threats,strengths, and weaknesses. There are various factors that will beimperative to Riordan`s future and at times termed strategic factors:strengths, weaknesses, opportunities and threats or simply SWOT.Riordan will be forced to formulate a strategy in the process thatwill be in line with the forces. For instance, Riordan has numerouscreative employees giving it a competitive advantage and able toenter a new venture that demands discipline and operationalexcellence. Environmental scanning can be said to be a tool that willgreatly help Riordan Manufacturing avoid surprise and ensuring thelong-term health.
Thesocial environment consists of aspects that will indirectly have aneffect on the short-term events of Riordan Manufacturing. Conductinga scan of the social environment will reveal a number of strategicfactors and often increase upon the realization that each companypossessed and represented by unique set of societal forces. Hugecompanies like Riordan manufacturing, will categorize the socialenvironment in any one geographic region into four areas and layemphasis in each sector on trends that are very imperative. Thepresence of trends in the social environment will have an impact onRiordan`s business activities. Transitions in the technological partof the societal environment will have a large effect on businessfirms with Riordan included.
Demographictrends also present forms part of socio-cultural aspects of thesocietal environment under which Riordan operates. Taking a look atthe task environment, Riordan`s scanning of the environment willincorporate an analysis of all the relevant variables in theworkplace that entails cultural diversity. The studies will take theform of personal reports written by various people in different partsof the firm. Riordan’s employees will then summarize the reportsand pass to the top level of management to be part of the strategicdecision-making. In a case of a new development reported, Riordan`stop management level will have to send memos to people throughout thecompany to keep watch of the same.
Thereports emanating from the scanning endeavors will act as a detailedlist of strategic factors (Hunger &Wheelen, 2011). In the courseof identifying external vital factors, one way to doing so will bethrough applying the priority matrix. The assessment conductedwhether the trends will occur and also ascertaining impacts of thesetrends to Riordan manufacturing. When it comes to scanning of thetask environment, forces directly affecting the organization will beincluded. Michael Porter’s five forces for industry analysisutilized in the process in an effort to determine Riordan`scompetitiveness.
Inthis part of strategic management plan, various strategies areapplied namely: corporate and directional.
InRiordan`s situation, corporate strategy will involve managing thevarious product lines and business units for maximum value. Forinstance, Riordan`s headquarters will have to play its role as theorganizational parent by dealing with multiple product and businessunit. The various subsidiaries have their competitive strategies thatthey employ for the purpose of gaining competitive advantage in themarketplace. Riordan Manufacturing industries will have to coordinatethe different business strategies in order for it to be successful asa "family". Hence, corporate strategy includes decisionsregarding the movement of financial and other resources to and fromRiordan`s product lines and business units. Coordinating will assistRiordan in transferring some of the knowledge or innovation tovarious units or subsidiaries. Through such efforts, Riordan will beable to gain synergies among numerous product lines and businessunits making the corporate whole bigger than some of its individualbusiness unit parts (Hunger &Wheelen, 2011).
Everycorporation needs to decide its orientation towards growth by havingand also answering various questions. Riordan manufacturingindustries need to ask:
Shouldwe change our operations? Do we need to diversify and so on?Riordan`s directional strategy needs constitute three generalorientations or at times referred to as grant plan. They includeGrowth strategy that broadens the company`s activities, stabilitystrategies that bring no effects to company`s present activities andthe retrenchment strategies that reduces a company`s activity level.
Itwill involve adding up the whole events and choices needed in thecarrying out of the plan and has various elements of programdevelopment, procedures, and budgets. In addition to being consideredafter strategy formulation, this forms an integral part of strategicmanagement and thus policy formulation. A number of the people oremployees at Riordan Manufacturing termed crucially to theorganization to effective strategy implementation will probably havelittle to do with the development of corporate and also businessstrategy. Hence, such might be entirely ignorant of a large amount ofinformation and operate in the formulation process (Hunger &Wheelen,2011). Involving the middle-level managers in the formulation andalso in the implementation of a strategy will result in betterorganizational performance.
DevelopingPrograms, Budgets, and Procedures
Riordan`smanagers and other functional areas will work with fellow managers indeveloping programs, resources, and procedures for implementation ofa strategy.
Itis a statement of the steps to taken in an effort to achieving oraccomplishing a single use plan and aims at making a strategy actionoriented.
Theyinvolve a corporation`s program in monetary terms and starts afterthe program development. Planning for the same, accounts for the lastreal check Riordan will have on its chosen strategy.
Theyare sequential steps or even techniques describing in depth the doingof a particular task or job.
Here,the activities of the organization and performance outcomes aremonitored, in order, to conduct a comparison of the actual anddesired performance. The feedback includes (1) determining what tomeasure (2) setting performance standards (3) measuring actualperformance (4) comparing desired and actual performance and (5)taking corrective actions.
Evaluationand Control in Strategic Management Plan
Itconsists of performance information and activity reports, andRiordan`s senior management takes part. Both the top managers andoperational managers at Riordan notified in case the process causeundesired performance and helped in developing new implementationprograms and procedures (Hunger &Wheelen, 2011).
Thereturns on investment (ROI) will be appropriate when it comes toevaluating Riordan`s capability to achieving profitability aims. Ithelps in evaluating extra corporate objectives like socialresponsibility or employees` career development. Riordan, for thisreason, needs to come up with measures that predict likelyprofitability steering controls since they measure variablesinfluencing future profitability.
DifferingBehavior and Output Control
Thedirectives can be put in place and emphasize either on actualperformance results and behavior controls tend to specify the doingof something via policies and rules. Output controls, on the otherhand, define the outcome or result of the behavior via the use ofobjectives and not interchangeable. Practice directives preferredwhen operational issue is not easy to explain, and output controlspreferred in a scenario where specific output measures reconciled andno connection between activities and outcomes.
Valueof Activity-Based Costing
Itis a new accounting technique for allocating overhead and fixed costsfor personal products based on the value-added activities going intothat product. The method will be very relevant to conducting avalue-chain analysis of Riordan in making outsourced decisions. Itfacilitates accountants in charging costs more accurately since itallocates overhead efficiently and applicable in many types ofindustries like Riordan.
ROIis the most commonly applied corporate performance measure andobtained by dividing net income before taxes by total assets. ROIwill bring about several advantages to Riordan and its onecomprehensive figure influenced by everything that happens. It willhelp in measuring how well a decision manager applies Riordan`sassets to generate profits, and it is a common denominator andcompared with other companies.
Ethicaland Social Responsibility Considerations in Riordan`s StrategicManagement Plan
Stakeholdersform an integral part of Riordan Manufacturing, and the managementhas a responsibility namely, social and ethical. Riordan Industrieshas subsidiaries in various countries, for instance, China with poorhuman rights record. Riordan being an American company, it has toensure that its business transactions adhere to high standardspracticed similarly in other stations. Hence, Riordan is endowed withan ethical obligation to paying workers a "fair" wage, nochild labors and their facilities clean at all times and safe.
RiordanManufacturing with its increased expansion rate and the currentcustomer base is stable which gives it a competitive edge over othermanufacturers. Riordan has also established itself in the globalmarket especially by setting up a plant in Asia (China to be precise)and also reduced production costs. Riordan also has quickdistribution channels and also quick turnaround keeping them ahead oftheir rivals.
InternalDynamics, Cultural and Structural Leadership Considerations Used inImplementing Business Strategy for Riordan
Structureand culture play an integral part in a company`s capability togetting used to change as in the case of Riordan, which has variousstations. Riordan`s network entails diverse cultural diversity thatprovides a wide market range for its products. Employing a culturaldiverse workforce enhances the pursuit of a particular spelled outcourse of action. As such, this may be impacted depending on whetherthe work fits its culture and as to whether the structure can factorin the transition.
Anotherinternal dynamic involves the workforce issues where Riordan needs toconsider the strengths and weaknesses of the labor force in thecrafting of the strategic plan(s). Highly skilled workforce has adifferent response from the unskilled. A workforce with a perfectprojection/trend, when it comes to creativity and innovation, seemssuited to taking control of new strategic initiatives.
Anotherconsideration would have to be in the form of finance that iscritical to the sustainability of Riordan Manufacturing. Whileengaging in the strategic plan, it is imperative to consider theliquid cash and also liabilities. Putting in place goals that fallwithin the budget increases the chances of goals realization. Riordanneeds to clear some of its debts if any and increase liquid assets soas to put in place a worthwhile technology.
Forany strategic plan to be considered workable, it has to be in aposition to address the aims of an organization. The strategic planis an important variable for most organizations or companiesespecially in the realization of visions, objectives and mission. Forthe chosen strategy to be effective, Riordan needs to conduct anassessment of historical performance deemed the starting point.Riordan needs to note out key indicators via digging of informationand finally, Riordan may have to carry out a predictive scoring formore precise projections. Hence, Riordan needs to come up with allthe variables the strategic plan needs.
Hunger,J. D., & Wheelen, T. L. (2011). Essentialsof strategic management.Boston: Prentice Hall.