Why All the Management Needs to Have a Strong Strategic Preparation - Research Paper Example

Management Introduction Every organisation needs a sound strategic plan to manage the acquisition and deployment of its management solutions. The plan must include a clear risk assessment and awareness component. (Gordon, 2010, 11) By exploring the operational risk elements of management within the context of strategic management planning, organisations can maximize the value proposition of proposed management, identify risks at the earliest point possible in the management life cycle and ensure that business owners are aware of management risks prior to implementation. There is one constituent of an organisation’s risk management structure that includes every little aspect of a company that is Operational Risk Management. An operational risk is so important that it can demolish a business, via fiscal loss, or operating capacity or loss of repute. However, there are still some organisations where operational risk management is not taken as an important issue as it should be seen. (Kotter, 2007) The possibility of loss due to insufficient or unsuccessful internal practices, people and operations or because of exterior events is known as Operational risk. Operational risks also takes in legal issues, nevertheless they do not include strategic risk. Management of Operational risk is extremely crucial for a business. If there is no operational management, there is no surety that a business is being managed on a protected and principled basis. It is most significant for a company to manage Operational risk as both the first and last risk. (Hannagan, 2002, 18) Strategic Management Plans Developing a detailed strategic plan may or may not be viable or even appropriate, depending on the size of the organisation, the size of the projects, and other factors. Nevertheless, a planning process ensures that: * The correct people are engaged. * The right questions get asked and answered. * Assumptions are clearly established and agreed upon. Each organisation needs to determine the extent to which it needs a formal strategic plan versus direct-to-implementation plans. Either way, the goal is to drive management in response to the corporate strategy, not have it be based on any "wow" factor or a perception that it will benefit the organisation. (Salisbury, 2008, 18) Business environment alters with time, hence management must acclimatize and modify incrementally too, when periodic transformational change is compulsory. (Hebson, 209, 32) All strategy starts with the organisation's corporate strategic plan, which lays out the overall objectives for the organisation, including its business mix, growth goals, and risk tolerance. An implementation plan identifies specific tactical elements for accomplishing the overall strategic plan. It follows the corporate strategic plan and may include acquisitions, new branches, new or expanded product lines, and cost reductions. (Martin, 2009, 75) Corporate implementation plans should identify the specific functionality required to realize the overall strategic plan. From this information the organisation is able to develop a strategic management plan. And finally, the strategic management plan is complemented with a series of management implementation plans that outline specifically how new management will be deployed and supported. Corporate Strategic Plan All parties involved both senior business and management, must understand that management, in and of itself, are not strategic. It is one of many tools used in support of the business objectives. Senior business managers must clearly articulate the goals and objectives of the business, and must articulate the available options and the consequences of those options. The strategic management plan should contain these basic elements: * A summary of the strategic imperatives that the plan is intended to support. * A statement about the risk profile of the organisation's use of management (whether it generally intends to use cutting-edge versus proven management). * A statement on management standards for the organisation. * An assessment of current management trends and their impact on the organisation's use of management. * An overview of the major management initiatives planned over the next three to five years (possibly showing one year in some detail and subsequent years in summary), identifying which key business processes each is designed to support. * A broad estimate of the expected benefit, cost, and risk of each initiative (which would be supported by more comprehensive analysis within individual project plans). * Other components that would create connecting points between business requirements and proposed management solutions. (Stogdill, 2006) The following key points for a strategic management planning process serve as a foundation for risk analysis: * Business owners must clearly identify their specific requirements in support of the organisation's strategic business 30plan. They must communicate an acceptable level of cost and risk. Management must ensure that the individuals designated to identify management solutions are 100% clear on those business needs. (Maccoby, 2000, 01) * IT must take those business requirements, evaluate suitable solutions, and present a business case to senior management about why their recommended solution is the appropriate selection. Management should never be purchased on a business case of "trust me, it will work." Management never drives strategy; strategy drives management. * Before committing to any management solution, perform an assessment that establishes a risk profile for the proposed management. The business stakeholders must agree to the estimated risk level. (Clark, 2005) * Whether the organisation uses a centralized or decentralized IT design and/or acquisition process, someone must be responsible for evaluating all significant management strategy and asking, "How would this management fit within the whole?" As management continues to become more powerful and complex, integration of management solutions will be more and more important. (Maccoby, 2000, 01) * Someone must be responsible for developing an implementation plan for all key management. It should identify cost, operational impact, resource requirements, dependencies, contingency plans, timeline, milestones, deployment steps (data conversions, testing, training, etc.), and management reporting requirements. (Hill, 2009, 23) These project elements should be agreeable to both IT and the business stakeholders. Any assumptions by IT or the business should be clearly identified and discussed. However, the organisation should not confuse an implementation plan with a strategic plan. One is not the other, and the organisation should have both. A general assessment of implementation issues and risks should be developed in order to consider the risk profile of the proposed management within the planning process, but not to the level of detail required for a full implementation plan. However, as detailed implementation plans emerge they should highlight changes to the risk assumptions outlined in the strategic plan. The risk profile of the proposed management should then be adjusted accordingly. Conclusion It is clear from above discussion that all the management needs to have a strong strategic preparation in order to manage the achievement and operation of its management solutions within the organization. The management plan needs to have a proper risk evaluation and awareness factor. It is clear that by management can enhance it efficiecieny and effectiveness by exploring the operational risk elements in the context of strategic management planning, by discovering risks at the very initial point possible in the management life cycle and by making sure that stake holders should be aware of management risks earlier than any implementations. References Gordon. G (2010) ‘Cost Management’ Boston, Vol. 24, p.11 Martin. P.H. (2009) ‘The Journal of Operational Risk’ London, Vol. 4, p. 75 Hill. S. (2009) ‘Manufacturing Business Technology’ Highlands Ranch, Vol. 27, p. 23 Hebson. G (2009), ‘Renewing class analysis in studies of the workplace’ Sage Publication, pg 30-35 Halley. A, Beaulieu. M, (2009) ‘Supply Chain Management’ Bradford, p. 49 Salisbury. D. F, (2008) ‘Risk Management’ New York. Vol. 55, 8; p. 18 Stogdill, R.M. (2006), Stogdill’s Handbook of Leadership, A Survey of Theory and Research, The Free Press Clark, D. 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