1. 0 Introduction: Sometimes the length of time horizons will determine whether the plans and goals could reach or not. Therefore, today more and more people are interested in time horizons, and most of them investigate the relationship between organizational plans, goals and time horizons. It also causes many different views on the length of time horizons.
Some management theorists put forward that the time horizons for all strategic plans should become shorter because of the turbulent changes in organizations’ external environments. I agree that some strategic plans should short their time horizons but not all strategic plans. In my essay, I will list key explanations of concepts at first. Next, I will present my opinion on this statement and explain the reasons why I agree and disagree with this statement.
Moreover, I will use some real life example to argue my view. 2. 0 Key explanations of concepts: According to Bartol et. al. (2001, p.
185), strategic plan is that people design some more particular processes in order to achieve strategic goals. As top management should developed the strategic plans after consulting with the board of directors and middle management, usually it will take a long time horizons about three to five years or more into the future (Bartol, Tein, Matthews & Martin, 2001, p. 185).
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Bartol et. al.
(2001) also mentioned that the organizational strategic plans often involved in the mission and goals because these is the basic of action steps. Time horizons for the strategic plans are something like the efficiency of the strategic plans in the specific period of time (Bartol et. al. , 2001, p.
Dublin (1997), President of MAPS, noted that time horizons are concept that refers to the length of time that people consider relevant to their particular decision-making processes. Bartol, Tein, Matthews & Martin (2001, p. 185) noticed that different levels of plans and goals refer different time horizons… Strategic goals and plans address long-range issues with time periods of five years or more. The length of time horizons often depended on the industry.
Bartol et. al. (2001, p. 188) got a conclusion that! ^0 in rapidly changing environments, long-range planning may focus on periods of less than five years.
In stable environments, long-range planning extends from 10 to 20 years. ! +/- According to the lecture notes the organizations’ external environments are divided into competitor environment, technological environment, economic conditions, societal environment and polytypic al environment. 3. 0 My opinion about this statement: In my opinion, some strategic plans should shorten their time horizons in order to reject the influence of the turbulent changes in organizations’ external environments, but it is not meant that all of strategic plans should be shorten.
Different organizations also have different external environments, so the manager should not treat these as same. A good manager should distinguish these external environments, and take different time horizons to make strategic. Therefore, the length of time horizons are determined by different industry. 3.
1 Agree this viewpoint: According to Hall (2000), many financial companies will adopt short time horizons when they frame a strategic plan. The main external environment of financial is economic environment, and it always changes quickly. In his opinion, the strategic plan of financial companies should be shortened with the considering of all kinds of risks, for example interest rate risks, market-time risks and some investment risks. Using this method the strategic plan will become more effective, because it will help the manager to meet fewer risks and have higher market return (Hall, 2000).
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Hall (2000) also believed that short time horizons will more easily to control the feedback than the long time horizons.
I agree with his view on this point. A long time horizons usually will take manager 5 years or more to make a decision, while the short time horizons just need 12 month or less. Therefore, sometimes long time horizons will make the company behind the times, because the grammatically change of external environments. However, if the manager uses short time horizons instead of long time horizons, he could know the changes of external environment and get the feedback more rapidly.
Depending on its feedback, the managers will have response quickly, and it also could let the company to adapt its strategic plans to fit the changeable environment in time. Maybe a real life example will help us to know the advantage of using short time horizons. For instance, some international students will make their financial plan with short time horizons in NZ. When the exchange rate of NZ dollars are at a low level, these international students will convert other types of currency into NZ dollars. However, when the exchange rate of NZ dollar is at a high level, they will keep other types of currency until the exchange drop into the low level again. As the exchange rate of currency usually changed quickly, so the international students must make the monetary planning in time, otherwise they will lose money.
In this situation, the time horizons should be shortened to suit turbulent environment. 3. 2 Disagree this viewpoint: Short time horizons could reduce risks and let the company catch up with world space; however, there are still some people support long time horizons. According to Qian (1999), when the external environment of the organization are comparatively stable, we could use long time horizons to establish the strategic plan. Tiggers (1999) noticed that if the companies use long time horizons, the company will spend less cost to accomplish the goals. That is true because if the company uses short time horizons, it means the manager should frame different strategic plans to meet the environment.
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Before design these plans, the company usually have to use a large amounts of manpower and capital to do the research. Therefore, some small companies with low profits can not afford these exorbitant spending. However, if the environment of the industry is stable or predictable, then the company could spend a long time to make a strategic plan (Tiggers, 1999), such as some raw material suppliers, education industry. These kinds of organizations usually with less related external factors and simple the technology process, and they always have the long-time-stable competition market. For example, flour is a kind of raw material. People could use it to make break, cake and other kinds of food.
Flour industry is comparative stable, and it is seldom affected by the external environment. Whatever the external environment changes, the flour still has its market, because the flour is a necessary thing with lower produce cost. Hence, the flour suppliers should not change its strategic plans frequently. Consequently, I think in these kinds of industry use the long time horizons method could save much cost. 4. 0 Conclusion: From my essay, we could get a conclusion that both long time horizons and short time horizons have their advantage on making the strategic planning.
In short, a sensible manager should have the ability to analyze different industry! s variety external environments, and design the appropriate length of time horizon.