Strategic Management and Planning
Eric G. Tankard
April 22, 2011
“Strategic management is the professional discipline related to the development of strategic goals and plans to achieve these goals. Performance is an important part of strategic management because it allows managers to see if plans are being successfully implemented. There are four key types of performance measures that should be included in any strategic management plan.”
This paper will seek to focus on the four key types of performance measures that comprise the strategic management plan model. The paper will try to make application of the four performance measures as they relate to this writer’s workplace both in reality and in theory.
Finally, the paper will conclude with a few examples of how the application of critical thought and knowledge acquisition, effective communication, and ethical reasoning were achieved in this course; as well as some examples of what might have been added to further help achieve these outcomes.
“The final stage in strategic management is strategy evaluation and control. All strategies are subject to future modification because internal and external factors are constantly changing. In the strategy evaluation and control process managers determine whether the chosen strategy is achieving the organization's objectives. The fundamental strategy evaluation and control activities are: reviewing internal and external factors that are the bases for current strategies, measuring performance, and taking corrective actions.” “Strategic management is the professional discipline related to the development of strategic goals and plans to achieve these goals. Performance is an important part of strategic management because it allows managers to see if plans are being successfully implemented. There are four key types of performance measures that should be included in any strategic management plan.” The key areas of focus for this paper are financial performance, employee performance, production performance, and management performance. Part of the evaluation and control of information consists of the gathering of performance data and activity reports. If there is ever an undesired performance report, it is imperative that management be made aware of it so that they can make the necessary corrections to the employee activity. However, when the undesired performance results from the process, then top management as well as operational managers must become involved in order to develop new implementation programs and procedures. One of the most difficult obstacles to effective control is the development of appropriate measures of important activities and out puts. The information that is being evaluated and controlled must be relevant to the information and activities that are being monitored. (Whellen, Hunger 2010)
Probably the easiest metric to measure in strategic management is financial performance. Financial performance is often measured using various criteria such as, Return on investment (ROI), Return on equity (ROE), and Earnings per share (EPS). Typically, these performance measures are used to gauge the overall health of a company to help locate key problem areas where profits have declined or cost have increased. (Van de Graff, 2011) However, according to an article on Oct. 16, 2000, in the Financial Times’ Mastering Management series, Wharton accounting Professors Christopher Ittner and David Larcher suggest that trying to measure a company’s performance using financial data alone may have some limitations. The authors went on to state that many managers felt that “traditional financially oriented systems no longer worked adequately. A recent survey...