Business Management in Practice: Tactical and Strategic Reports
Understand the importance of planning within a company, the difference between strategic and tactical planning, and what to present in tactical and strategic reports to track your business's results.
The importance of planning within a company
Planning has always been the basis for decision-making and market positioning of organizations. Based on internal elements and the external environment, it is possible to read the existing possibilities and then guide the strategic decisions of companies.
Planning means knowing where we want to go. Organizational Planning can be divided into three levels: strategic, tactical, and operational.
Here we will cover strategic planning and tactical planning, as well as how to build tactical and strategic reports.
Strategic Planning (long range)
Strategic planning can be defined as a management process related to formulating objectives for selecting and executing action programs, taking into account the internal and external conditions of the company and its expected evolution.
It presents the future aspect of institutional decisions, based on formulating the institution's philosophy, mission, objectives, and goals, in pursuit of long-term results for the organization. In a general way, it consists of knowing what must be done and how it must be done. It is crucial to the organization's success, and responsibility for this planning generally lies with senior management, given the level of decisions that need to be made, and it covers the entire organizational structure of a company.
Strategic planning is generally done for a 5-to-10-year horizon. It is essential that strategic planning, despite having a reach of up to 10 years, be constantly updated. If this does not happen, the plan runs a serious risk of becoming obsolete and not being used within the company as it should be.
Tactical Planning (medium range)
It is developed by middle management and applies to specific departments, aiming to optimize a given area of results rather than the company as a whole.
It works with breakdowns of the objectives, strategies, and policies established in strategic planning. Tactical planning is what unfolds strategic objectives into goals to be pursued by every area and structure of the organization, so the tactical planning level is mainly responsible for the success of achieving strategic objectives.
Tactical planning is done year by year and seeks to optimize a specific area of the company in pursuit of a result.
Tactical and strategic reports
The report includes all the important information about the plan, and serves both for your own personal control and for presenting data to other members of the organization.
Tactical planning and reporting
To prepare a tactical report, you should present:
Setting standards
provides the criteria for measuring performance and evaluating results. Control standards depend directly on the objectives, specifications, and expected results from the planning process.
Evaluating results
evaluation of performance or results within the limits set by the standards, to ensure the objectives set are achieved.
Comparing results with standards
The comparison provides information about the quantity, quality, time, and cost of each department's activities, allowing them to be evaluated against pre-established standards.
Corrective action
when deviations or variances occur.
Strategic planning and reporting
Strategic planning has two main purposes:
Correcting existing flaws or errors: control serves to detect flaws or errors – whether in planning or execution – in order to point out the appropriate corrective measures to fix them.
Preventing new flaws or errors: by correcting existing flaws or errors, control points out the means needed to avoid them in the future.
To prepare a strategic report, you need to:
Setting performance standards
represent the desired performance. They can be tangible or intangible, vague or specific, but always related to the result you want to achieve. Standards are rules that provide an understanding of what must be done.
Evaluating performance
To control performance, you must at least know something about it and its past. This evaluation depends on immediate information about performance, and the unit of measurement must match the predetermined standard and be expressed in a way that makes it easy to compare performance with the desired performance standard.
Comparing performance with the standard
Comparing performance with what was planned aims not only to locate errors or deviations, but also to allow the prediction of other future results. It can be done through Results (when the comparison between the standard and the variable is made after the operation is finished) or Performance (when the comparison between the standard and the variable is made in parallel with the operation, i.e., when the comparison accompanies the execution of the operation).
Corrective action
Corrective action is taken based on the quantitative data generated in the three previous phases of the control process.
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