Literature Review In Relation To Strategic Management

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Literature review of finance in relation to strategic management Financial planning determines how managers carry out planning process in organizations so as to meet the business needs. An organization comes up with the right direction to take, goal set and how to meet the objectives therein. This is accomplished by gathering and data analyzation , implementation and evaluation and monitoring of results. The strategy to adopt must be figured out depending on the total cost. Strategic planning offers a road map, areas that are not workable are done away with. This is done so that organizations can decrease costs and raise revenue. Such results to good budgeting in future and serves a sign of growth and stability. Strategic and financial planning…show more content…
For a strategy to succeed, it depends on the below mentioned factors: Alignment with external environment Internal view of core competencies Sustainable competitive advantages Implementation and monitoring Organizations, corporations, nations and individuals should have a strategy, vision and a mission including objectives and goal. Strategic planning process utilizes analytical models that provide a realistic picture. The strategy should be very competitive so as to help organizations perform differently from its rivals and achieve a competitive advantage in a more efficient manner. Strategic planning relates to resource allocation, further to this, finance, financial goals and financial performance all play a major role in strategic planning and decision making process especially when implementing and monitoring stages. THE STRATEGIC PLANING AND DECISION MAKING PROCESS INVOLVES:- Vision Statement: comes from executives. They identify opportunities and prepares a business plan Mission Statement Analysis Strategy Formulation Strategy implementation and…show more content…
Financial assumptions has to be analyzed , such as; marketing costs, employees, litigation issues, contingencies, financial problems may all affect strategic planning. Financial Planning; If organizations relies on equity capital to finance strategic goals, it might come to an end in case of misappropriation of funds or more urgent matters to be attended to . This may result in insufficient retained earnings available at the end of a financial year for re-investment. Under Operational Performance; capital budgeting is done by management. Sales are forecasted plus related expenses. Financial projections are done for future use. This may be unreliable due to changes in sales cycle or change in costs and also market demand. Operational issues results to financial problems that can heavily impact on strategic planning. Strategy Development; due to changing operational and financial variables organizations strategic planning must adopt such occurrences. New measures or ways should be implemented by management in case of financial problems such as negative cash flows among others. Strategies must be diversified by organizations because relying on one to work out may be overly optimistic and

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