Assessment of the Business Environment and Resources

Abstract

In the previous chapter we studied corporate objectives: the range of these, the forces which determine business objectives, and how objectives might vary with the time dimension adopted. This process of objective-setting constitutes the first step in the strategic decision-making sequence (see Table 1.2 on p. 8), and as a result of this process the firm arrives at an understanding of its short- and long-term goals. The objectives set by an organisation naturally have a major influence upon the strategy it chooses to follow. However, unless the business has expressed its financial objectives in the context of specific product-market areas in which it intends to operate, these objectives will merely be end results which the business wishes to achieve, and therefore will constitute only the first step in the strategic process. To narrow the focus of strategy further it is necessary for the firm to identify potential markets in which its goals may be achieved. Moreover an assessment by the firm of its environment relative particularly to its current and potential resources may well lead to some modification of the business objectives or goals themselves.

The advocates of systematic corporate planning base their case on the view that the determination of the future can be improved by a systematic analytical approach which reviews the business as a whole in relation to its environment. — B. W. Denning (ed.), Corporate Planning (London: McGraw-Hill, 1971) p. 4.