Benefits of Strategic Planning:
Ethical Benefits:
Ethics is considered as the moral principles that governs a person’s or groups’ behavior, separating what is good from what is considered bad, or right from wrong. It is essentially a system of moral principles or philosophy concerned with “what is good for individuals and society” (BBC, nd). The following are some of the ethical benefits that an organization may derive from strategic planning:
1. An organization can derive ethical benefits by ensuring that the goals and visions are developed in consideration not only of its own corporate interest but also of the interests of the public it serves or the stakeholders. In other words, the goals the organizations have set for itself must be good for both the individuals and for the society. Given that the satisfaction of the stakeholders is essential to the success of the organization, it means that ethical dimension of strategic planning results in a convergence of both corporate and stakeholder interests. In other words it is a win-win situation. According to Hosmer (1994), ethics builds trust commitment between the organization and stakeholders, and it is “essential for organizational success” (p. 17). It is this trust and commitment that are the most important elements of collaboration between the organization and the stakeholders in achieving its strategic goals.
2. Another ethical benefit of strategic planning is the promotion of ethical organizational culture: According to Business Dictionary.com, an organizations culture may be defined as “the values and behaviours that contribute to the unique social and psychological environment of an organization”. The incorporation of ethical reflections into strategic planning can cultivate and strengthen the positive values and behaviors or conduct of the organization. In essence, strategic planning, by promoting ethical organizational culture encourages ethical conduct, ensuring that the ‘right’, ‘good’, and ‘proper’ values, belief systems, concepts etc., are practiced in the organization, even in the absence of rules and monitoring.
Financial Benefits:
- Through strategic planning and management, managers are able to review operating processes and make necessary and desired changes that will improve revenue- generating ideas.
- Strategic planning may involve various work streams, including marketing, research and development, human resources management, sales and financial management (Codjia, nd), which enables a firm to develop the best strategies and tactics to beat the competition. This will ensure improved productivity and revenues.
- It can be used to gauge and manage profitability using corporate income statements.
- Strategic planning enables an organization monitor its liquidity by tracking its cash flow and ensuring that it meets its financial obligations.
- It provides the opportunity for the organization to maintain solvency by reviewing the components of its balance sheets- assets, liability, and net worth.
