16 -- Planning and Budgeting

16 -- Planning and Budgeting - CPA BEC - STUDY UNIT 16...

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CPA BEC - STUDY UNIT 16 Planning and Budgeting: Core Concepts A. Strategic Management 1. Strategic management has a long-term planning horizon. Thus, a strategic orientation is traditionally associated with senior management. However, this orientation should pervade the organization because it encourages farsightedness by all employees. 2. The strategic management process includes the following steps: A grand strategy is developed to describe how the organization’s mission is to be achieved. It is based on a situational analysis that considers organizational strengths and weaknesses (a capability profile) and their interactions with environmental opportunities and threats (SWOT). B. Nature of Planning 1. Planning is the determination of what is to be done, and of how , when , where , and by whom it is to be done. Plans serve to direct the activities that all organizational members must undertake and successfully perform to move the organization from where it is to where it wants to be (accomplishment of its objectives). 2. The determination of organizational objectives is the first step in planning. A mission statement is a formal, written document that defines the organization’s purpose in society. C. Premises and Objectives 1. Premises are underlying assumptions. Objectives should be established for the organization and each of its subunits in a means-end hierarchy . D.
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16 -- Planning and Budgeting - CPA BEC - STUDY UNIT 16...

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