Riordan Manufacturing Strategic Plan
Why is strategic management necessary? Strategic management, and business policies are essential for organizations to gain competitive advantage within their respective markets. Organizations like Riordan Manufacturing implement policies, and procedures to provide structure, and standardize operations in efforts to maintain proper control of production, inventory, and logistics. Developing a strategic plan focuses on the need for planning, roles of ethical and social responsibility, current competitive advantages, innovation, sustainability, internal dynamics, influence of business continuity, and assessment, and feedback. The following discussion ...view middle of the document...
According to the text, the evaluation and control process is a five-phase process that involves top managers and operational managers of the organization. The first phase of the process is to determine what to measure. Managers need to specify what implementation process and results will be monitored and evaluated in a reasonable and consistent manner. This phase should focus on the most significant elements in the process. Phase two is to establish predetermined standards. This phase measures the acceptable performance results. It also outlines the tolerance range and any acceptable deviations.
Phase three is the measure of performance, in which is done at predetermined times. Phase four determines if the performance match the standards. This phase determines if the actual performance results are within the desired tolerance range and if so, this phase ends. However, if not, then phase five is the corrective action phase where the undesired results, action must be taken. There are a series of questions that must be answered: 1) is the deviation only a chance fluctuation? 2) Are the processes being carried out correctly? 3) Are the processes appropriate to the achievement of the desired standard? And who is the best person to take corrective action. If the performance results are unsatisfactory due to the strategic management process, operational managers should be made aware so they can implement or modify a procedure. Generally, top management is often better at the first two steps of the phase, than in the last two steps (Wheelen).
Primary Measures of Corporate Performance
Measuring performance includes types of controls being measure; activity based costing, and enterprise risk management. The most commonly used measure of corporate performance is simply the return on investment (ROI) and earning per share (EPS) which takes into account the balance scorecard approach which incorporates the stakeholder and shareholder value. Other key performance measures are cash flow, quarterly sales growth, market – share.
A balanced scorecard recognizes the limitations of purely financial measurement at Riordan Manufacturing, which is normally short-term measurement. According to the text, the balance scorecard combines both financial and non-financial measures that shows the results of actions already taken by Riordan Manufacturing; with a focus on operational measures of customer satisfaction, internal processes, financial and learning and development. The objectives reveal how we appear to our shareholders; how do the customers view Riordan Manufacturing; what areas Riordan Manufacturing must excel at and can Riordan Manufacturing improve and create value. Balanced scorecards are normally a key output from the strategy formulation process. The key goals that are identified as critical to the success of the business, as part of a performance measurement framework, can also be considered in the context of a balanced scorecard...