resources in the overall strategy, incorporate the organizational budgeting function into the strategic planning process, and incorporate information management into the strategy planning process (Shrader, Taylor, and Dalton 149-171).
Incorporating the financial budgeting process into the strategic planning process not only ties specific organizational performance goals to strategy, it also provides a convenient procedure for the assessment of strategy (Kolb and Black 82-92). Further, strategic planning provides an ideal environment within which to perform budgetary planning.
The conduct of strategic planning can and likely will exert a positive impact on financial performance outcomes for a business enterprise. The financial performance outcome most likely to benefit positively from the conduct of strategic planning by an organization is operating income, as opposed to net profit. The introduction of specific and detailed formality into an organization's strategic planning process is unlikely to improve the effect of strategic planning on financial performance outcomes.
Sources of Financial Failure For Business Enterprises
Five classifications of operational variables affect the success of a business venture. These variable classifications are organizational form, capital generation, short-term capital management, pricing and profitability management, and long-term capital management.
The form of business organization has a direct impact on the financial structure and financial performance of a firm. This impact results from differences in income tax liabilities for different types of business forms, and differences in the abilities of the different types of business to generate capital (Brigham 94).
The generation of capital is one of the most pressing problems facing any small business venture. A great variety of capital sources exist, along with an equally great variety of methods by which these sources ...