Strategic planning has been defined as the process of setting objectives for the organisation and laying down the policies which are to govern the acquisition, usage and disposal of the resources used to achieve those objectives. (10 marks)
Required:
Explain the following:
i) Strategy
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A strategy is a course of action including the specification of all the resources which will be required to achieve a specific objective. It is concerned with the overall direction of an organization. Strategy formulation is the responsibility of the top management of an organization.
ii) Policies
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Policies are general statements or understandings which provide guidelines for management decision making. They allow managers to exercise their own discretion and freedom of choice, but within certain limits. An example of a policy might be that the staff of the purchasing department of an organization should not accept gifts from suppliers subject to certain exceptions.
iii) Procedures
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Procedures are sequences of required actions or activities for performing certain tasks. They exist at all levels of an organization even though they are more onerous and extensive at the lower levels of the organization. Although they have their setbacks, procedures result in efficiency and standardization of work.
iv) Budget
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A budget is a formal statement of expected results set out in numerical terms and summarized in monetary values. It is a plan for carrying out certain activities with specified resources within a given period of time in order to achieve certain goals. A budget is a numerical statement and so tends to ignore qualitative aspects of planning and achievement.
v) Rules
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Rules prescribe a specific, definite action which should be taken in a given situation. They do not allow for deviations or exceptions unlike policies which are general guidelines that allow the exercise of some management discretion. An example of a rule might be that employees with access to a telephone must not use it for personal calls.