Strategic plan

Definition

A strategic plan is a systematic process for envisioning a desired future and translating this vision into defined goals, objectives, and steps to achieve them. It aligns an organization's activities with its mission and helps in resource allocation for optimal performance.

5 Must Know Facts For Your Next Test

1. Strategic plans typically cover a long-term period ranging from three to five years.
2. They serve as a framework for decision-making and setting priorities based on the organization’s values and goals.
3. Effective strategic plans involve stakeholders at all levels of the organization to ensure comprehensive input and buy-in.
4. Performance measurement tools such as the Balanced Scorecard are often used to track progress against the strategic plan's objectives.
5. Regular reviews and updates of the strategic plan are essential to adapt to changing market conditions or organizational priorities.

Review Questions

• What is the primary purpose of a strategic plan in an organization?
• How does a Balanced Scorecard assist in monitoring a strategic plan?
• Why is stakeholder involvement crucial in developing an effective strategic plan?

Related terms

Balanced Scorecard:

A performance measurement tool that uses financial and non-financial metrics to provide a balanced view of organizational performance.

Objective: Specific, measurable steps that are taken to achieve broader goals outlined in the strategic plan.

Key Performance Indicator (KPI): Quantifiable measures used to evaluate how well an organization is achieving its objectives.