Importance of Planning within the Business Environment

Importance of Planning within the melodic phrase EnvironmentThe objective of this assignment is to show the understanding of the concern surround and counseling in construction and property. To achieve this, two core elements associated with commission testamenting be examined and compargond with an existing construction troupe such as Wilmot Dixon, which is struggling with the certain economical climate. This study exit discuss the carrying into action of prep bedness using innovative management strategies and tools required to assist companies to be better positioned for sustainable growth.Defining the Business EnvironmentAccording to Palmer Hartley (2006) the traffic environment merchant ship be defined as everything which surrounds a system. For sample, if we produce a blood as the core of a working system, thither atomic number 18 surrounding influences which contribute to the workings of this system within the macro environment. For a headache it stick out be difficult to rate what the elements are within the environment. We throne demonstrate important factors relating to the telephone line environment using the PESTEL model as illustrated in record 1.0Businesses survive by go inputs into goods and services which customers in the environment want to purchase. The current climate suggests we are still in a down turn market. With author to Wilmott (2011) in an exclusive interview, he suggests that 2011 wholeow for be an extremely tough social class due to the soaring costs associated with the supply chain and materials. Another politically associated topic is the increase in VAT. According to the Federation of Master Builders (2011), increase VAT from 17.5% to 20% could lead to oer 11,000 job losses in the construction industry over the next decade. Such an increase may deter many businesses from starting new projects and where projects are starting, contractors are not breaking even. An example of this can be related to Wil lmot Dixon, a primary winding tier contractor where they choose forecast a slowdown in the property market. According to Willmot (2011) Firms are pricing below cost because they are talking themselves into believing the market price for materials and supply chain bequeath continue to fall so then they can recover the difference.A fundamental issue with companies facing such a troublesome twelvemonth would be to weapon a business management intend tone to read the environment and understand how the business system will take on in the next. Such a strategic move would involve all-important(a) be after.Planning3.1 The purpose of externalizeningEssentially, the purpose of envisionning is to contemplate future actions whether this is economic, political or environmental. According to Brews Purahit (2007), as business conditions become to boot unstable, companies tend to adapt a blueprintning strategy. Change in the business environment creates uncertainty. It changes compa nies and population to adapt by establishing addresss and objectives and puts out how to achieve them by implementing a business think.With informant to figure 1.1, the initial approach would be to name the purpose of forgening, identifying the fraternitys current position in the market and identify where they want to be. Once this has been established it will offer a whiteer nidus to employees. This will enhance motivate to increase control by allowing people to step their go along against set targets and allow the company to use its resources efficiently. With reference to one of Wilmot Dixons senior partners, Willmot (2011) announced one of the companies key objectives due to the politically associated development of re-furbishing un-occupied housing Willmot Dixon is diversifying into new areas such as private residential and mixed-use regeneration development. We can associate this back to the PESTEL model where we can expect at the political issues and demographics of the current economy. A major issue is that thither is a shortage of housing with an ever increasing population. The giving medication is feel to re-furbish un-occupied properties scattered around the UK and put these properties back to council housing, an area Willmot Dixon has proposed to target.3.2 Contents of planningCompanies expanding in business or are looking to adapt to salmagundi in the business environment, prepare a business plan. According to Mckeever (2010), a business plan is a document that sets out the markets the business intends to serve. at that place are different plans which a business will decide upon, for exampleA strategic plan sets out the overall direction for the business. It is panoptic in scope and covers all the companies major activities.A strategic business unit consists of a number of closely related products, which is meaningful to explain a separate strategy.An operational plan details how the overall objectives are to be achieved, by spe cifying what is expected from senior management experts from special departments or functions.Annual plans are common amongst most companies center on finance and position budgets for the coming stratum.What is common in all business plans is focusing on the direction of the business in short and spacious experimental condition planning.Key aspects of planning include the strategy of the company and the development of the business to enhance profit. A planning hierarchy can be seen in figure 1.2, showing how the characteristics of plans changes at each level.According to Mathews (2011), a government plan to cut the cost of public construction projects by a fifth, through standardising buildings, was published alongside the recent Budget. With the property market having been so affluent and now with the market and the country progressively slipping into except recession, it would seem that more construction companies would be looking to plan long term, using a more strategic o ption rather than plan for the short term.3.3 The Process of planningThe process of planning relates to how plans are produced for a business or organisation to succeed. According to Jennings (2000), companies change their approach to planning as conditions change. There are seven iterative tasks which can be performed when making a plan as shown in figure 1.3.Figure 1.3 Seven iterative tasks in planning.Any plan depends on host education. Reverting back to the PESTEL model is good practice when sourcing information such as market trends, formal analysis of the political and legal factors, current economy, socio cultural factors, technology and issues relating to the environment. Whether the company is a centralised company where the decisions are taken at the centre of the company, or a decentralised company, where the decision-making is delegated to humiliate levels of management, within the organisation casual encounters with colleagues is a major influence in gathering inform ation. Once all of the information has been accumulated a missionary station statement can be compiled showing the organisations direction and overall ending in the construction market. It will guide decision making and should urge and motivate the workforce to accomplish the desired issue. As a result of the mission statement, a gussy up analysis can be utilise to evaluate the company in the current economic climate.Conducting a overdress analysis as defined in figure 1.4 will enable companies such as Willmot Dixon to define their key strengths and weaknesses. Completing a SWOT analysis integrates the external opportunities and threats, as example, according to Lowery (2011), the economy is shaping to be a tough year for the construction sector. VAT increases and higher employer depicted object Insurance contributions combine with government spending cuts to spell a year of contraction.Articles such as this are a means of monitoring progress externally as well as internally . By evaluating how the economy will effect an organisation and by completing a SWOT analysis,allows companies to set their goals and objectives.Goals and objectives give focus to a task such as what will be achieved and when. Setting goals is difficult for companies as they have to look beyond their present status and predict how their role as a business will fit in with the changing economy. The criteria for assessing goals is to be realistic and this can be achieved using the SMART acronym.Specific Does the goal set specific targets?Measurable Goals can be defined precisely enough to measure progress towards them.Attainable Goals should be challenging but not unreasonable. (Goal setting theory suggests the motivational consequences of goal setting.Rewarded People see that attaining a goal will bring reward.Timed Does the goal specify the cartridge holder over which it will be achieved, to a reasonable and acceptable standard.Goals and objectives provide the reference point for o ther decisions within the management plan, formulating the criteria against which performance can be measured.Creating a set of goals and objectives will direct a company to identify what actions and resources are necessary in order to accomplish the set goals and objectives. This will identify what needs to be done, who will do it and communicate this information to the relevant personnel. With reference to Lynch (2005) specifies that managers handle this aspect of planning in 3 waysComprehensively where managers decide to make a clear cut change in direction. They assume that success depends on capricious the changes rapidly and in a coordinated way across the company that implies a comprehensive business plan,Incremental or directional plan where areas of the business plan are uncertain such as a volatile market, or where the company is depending on the outcome of research. Important strategic areas may be left deliberately unclear until the outcomes of current events have been established (Lynch, 2005, Page 633), or the third way, selective planning when incomplete of the other two methods are the best way forward and managers implement major change only in some areas of the business plan.Plans will interpolate for different companies, as an example, Grant (2003), gives an insight into the way mangers can develop strategy. For instance his study in 6 major anoint companies used a clear planning process as little in figure 1.3. The details varied between companies but all shared the common components.Figure 1.3 The generic strategic planning circle Source Based on Grant (2003)Once a plan has been formulated the objectives and actions of the plan needs to be communicated to managers and employees. In larger organisations this can incur time and effort but is carried out to ensureEveryone understands the planAllow time to resolve any issues, confusion or ambiguityCommunicate judgements and assumptions that underline the planEnsure the plan is instigate d and activities are coordinate in practice and on paper.3.4 Outcomes of planningHowever good a business plan is, unless it is implemented nothing normally happens. To ensure the plan is instigated, progress needs to be monitored. This can be monitored in a number of different ways such as, output and profit or by completing goals and objectives. By constantly evaluating the progress or the company and monitoring the results, objectives and targets can be changed to suit the business if for example there is change in mandate. This is why gathering knowledge and using a fundamental element such as the PESTEL model is a unremitting cycle to ensure sustainable growth.ConclusionBusiness plans will vary in every company, but the major elements will always sojourn consistent. In order to survive the current economic climate it is time for business to make significant changes. It is essential for companies to gather information that is to understand with legislation, politics, techno logy etc and all the elements associated with the PESTEL model. This will enable companies to alter the business plan to constantly evolve with the market trend.The construction industry, according to many major companies and societies, is still in recession and with a new government introducing legislation involving tax increases and spending cuts, construction companies need to rethink their current strategies. Willmot Dixon, as an example, is looking to diversify into different areas of property development, with consistent work sprouting from maintenance and refurbishment work. Examples like this can demonstrate positive management thinking that will be the flagship for other smaller companies to follow.BibliographyRobson W., (1997). Strategic counseling Information Systems. 2nd Ed. Great Britain Pearson discipline Limited.Palmer, A and Hartley, B., (2006). The Business Environment. fifth Ed. Great Britain McGraw-Hill EducationHarris, F and McCaffer, R., (2006) Modern Constru ction Management sixth Ed. Great Britain Blackwell Publishing LimitedBroddy, D. and Paton, S., (2011)). Management An Introduction 5th Ed. England Pearson Education Limited