Free «Strategic Planning in a recession» Essay Sample

Every business individual, company or organization is in need of prospering in most of its undertakings as relates business. This has been an activity that happens in the world of business as many business organizations are in a mood of trying to escape and survive the risks of changes in the world economy. One of the critical actions that many companies and individuals in business have been doing to counteract is what we call strategic planning. This is the process where an organization or organizations defines its action plans, direction and decides on the allocation of its resources in order to meet the qualifications that will enable it to compete well and make the most no matter the present situations in the world.

The resources that a business can involve in its management are the capital and the people at the disposal of the plans and intentions of the organization. As far as there are many organizations and business companies, there are many and diverse strategies that have been in use in these organizations. They are made by the structures of the organizations, and mostly suit the organization at a particular time. This therefore means that they are subject to change with the changing nature of the business in the world (Allison and Kaye, 2005). They specifically relate to the ideas that a business organization does, to who these actions are done and how they excel in the delivery if its services to its people. It also involve the ideas of the mission of the company, objectives, analysis of the present and the coming situations, formulation of the plan of action to be undertaken and finally implementation and control of the tools used to attain to the intentions made.



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Strategic planning has been the pillar of many businesses in the world as a failure to have it takes the business to a great risk of collapse. It is the course of action and a destination of any business plan, whether it is at the point of start of is at a continuum. Strategies are normally considered long terms as their effects are felt over a long period of time. For any business, it is an obligation that it undergoes recession once in a while (Allison and Kaye, 2005).

Recession refers to a period in business where there is a decline in the activities across the economy that takes a period of time as a year or even more. It refers to a contraction in the business cycle that is depicted in productions of industries, employment opportunities, individual and group income and trade in the retail whole-sale. There is a general fall in many of the business aspects as incomes in various houses, employment, nature of employments, investments and spending in investments and utilization of the company’s capacities. There is however a rise in a number of factors as the rate of bankruptcy and unemployment in the country. The rise or fall is normally indicated in the gross domestic product (GDP) of various countries. Economic recession has been one of the fears that, many business plans and organizations would not wish to encounter in their endeavors. It affects all kinds of businesses whether big or small, and normally results in a failure to get access to particular commodities and services by the consumers (Goodstein, et, al. 2003).

Economic recession has hit many economies at the moment including that of the United States of America and Japan, and has thus affected the economies of other nations that depend directly or indirectly on the economies of these nations. There are a number of factors that have been seen to be the cause of the economic recession in the world. These include factors that concern a widespread spending and the availability of commodities to exchange with the spending. It also entails internal factors as taxation and the supply of money in various nations (Geroski and Gregg, 1997).

Before taking any action, various economies takes steps in order to determine and know if there is recession in the business market. This is normally the work of the business cycle acting committee based at the national bureau of economic research (NBER). It participates in a number of activities as providing an efficient way in order to know if there is an economic recession. This is normally done by the determination of the business activity present in the economy by considering concepts as production, employment, sales in the whole-sale and the real income.

This board perceives recession as to cover the time when the business has grown very well and has reached a peak in its production, to the time when the business starts to drop to the bottom line. This is the normal activity that takes place in the field of business as you won’t expect a business to rise without reaching a point where it starts to drop in its production and expanse. After some time, there is the second and subsequent rise, called the expansionary period. Basing on the fact that recession is bound to happen at any time, many economies have tried to come up with major ways to check on them so that the businesses won’t experience a total loss but will be able to survive and finally recover from the acts of recession.

At the moment, there are various strategies that have been involved in various countries to help counter the problem of recession. For instance, in the United States of America, there is the call for the citizens to spend more so that they can avoid the problem of recession as inflation. There are other plans as reformation of the pension schemes, public sector unions and other institutions that make use of the government resources. This is to help in the management of the spending by the government and other sectors that depend on it. It is the inadequacies in the aggregate demand in the economy that most mainstream economies perceive as the cause of recession. The policy makers are the main determinants of the decisions that are made against recession (Goodstein, et, al. 2003). For instance, those who believe in monetarism use expansion in the monetary policy while others would engage in increased spending by the governments in order to raise growth in the economy.

Organizational planning entails the ideas and strategies that are educational in nature and are used by various organizations to offset change in the fields of beliefs, values and the structures of the organization for it to manage and survive the regular and unexpected changes that take place in the field of economy. The company or any other organization has to participate in a number of plans that will be a guide on the occurrence of recession. There are a number of plans that are in use by various institutions as follows; there is the use of the behavioral science by the companies. This involves focusing on the behaviors of the company as that of the workers in an organization, and trying to find its effect to the natural environment and the world at large. In this case, many economies have to gauge themselves with the other economies in the market such that when recession occurs, it will be in a position to manage and come out of it within a short period of time (Geroski and Gregg, 1997).

System improvement is another plan that a business can take in order to deal with recession. There are various sectors within an organization or institution that have to be well organized and managed for the betterment of the future of the economy of the organization. These include factors as making use of the modern technology equipment, having the workers participate in the modern ways of management and embracing the culture of hard work and flexibility in the management of the company such that incase of anything as recession, the organization will be able to adjust to and take a very short time to bail out of it. The organization also has to take appropriate and timely plans that can act incase of an emergency, and be able to yield expected results as well (Sanderson and Cushman, 1997).

Self analysis is another factor that an organization can take in order to counter the problem of recession.

The company has to carry out analysis on its strategies, goals, objectives, marketing plans, what are the possible outcomes of any strategy that has been taken, and the evaluation of the recent plans of action with respect to the future plans and the changes in the world market. This also entails the comparison of the organization with the other organizations that are in existence. This will enable the organization to deal with the problem of recession as soon as it is perceived to occur.

The firms are at the point of restructuring and reorganizing their management activities in order to curb the problem of recession. There are a number of strategies that have been engaged by these firms. National economic programs have been implemented by a number of countries as the Ireland, and this needs to be done by the other states that have felt the burden of recession. One factor that is under search to be eradicated by various countries is on the inflation. This is the sudden rise in the prices of the basic goods and services over a period of time. It also takes to the erosion that attacks the purchasing power of the money. For the nations to manage the problem of recession there is need to stabilize on the inflation and its rate in every setting. This will enable the market to adjust swiftly in a downturn and thus cut on the risk of liquidity trap that hinders the monetary policy from stabilizing the economy. The inflation rates therefore have to be kept low and stable (Sanderson and Cushman, 1997).

Another strategy is on the payment of tax by the citizens of the nation, and that being paid by one nation to another. Many countries are engaging in deals and strategies that cut short on the burdens that result due to taxation. One of the means that a nation loses money is through the payment of tax that has been levied either to the producer or the consumer. By easing the burden due to taxation, there will be an advantage to manage recession.

Among other factors to manage recession is the promotion of foreign investment. Many economies are venturing onto the field of going global in most of its undertakings. This is one of the strategies that have assisted many nations to rise in their economies. Through the act of going global in business and making investments in outside countries, one is left secured due to the risk of recession. Moreover, an institution can increase on the labor force skills in order to meet greater production (Allison and Kaye, 2005).

In planning, one needs to make various considerations as concerns the weaknesses and strengths of an institution. This will help make improvements and adjustments that will yield good fortunes for the institution. First is to look at the objectives and goals of the institution, either long term or short term, and compare with the efforts that are being put in the system together with the results that are got. Strengths are identified from the strategies that have been implemented and have proved to yield, in or out of season. On the other hand, weaknesses can be obtained from the failures that have rocked the institution due to the implementation of particular strategies. An organization is competent in its strategies if it is able to survive, with a continuum of high productivity, the challenges and hurdles that are met by business firms and other organizations (Allison and Kaye, 2005).

A mission statement is a short and formal statement that spells out the purpose &aim of the organization, the stakeholders, the responsibilities and the products and services offered by an organization or an institution. A planned change refers to a procedural methodology that can be implemented at the process of effecting a particular change in an organization. As compared to a mission statement, it is not for a long time as can be a mission statement. It explores on the need for change, to the evaluation of the particular change that has been effected. Planned change normally arises due to the environmental pressures that might be posing risks to the business. On the other hand, the unplanned change is one that happens under the unseen or unanticipated influences (Talbot, 2003).

In conclusion, any business is subject to recession as it rises from one lower point to another and normally drops before it takes another rise. It is therefore the work of the business managers and planners to see to it that the procedures and productivity of the business is kept at a continuum (Geroski and Gregg, 1997). This can only be carried out through strategic planning with the involvement of effective mission statements, planned and the unplanned changes.


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