Strategic planning

Definition

Strategic planning involves setting long-term goals and determining the best approach to achieve them. It aligns resources and actions to the organization's mission and vision, ensuring efficient use of managerial accounting information.

5 Must Know Facts For Your Next Test

1. Strategic planning is essential for aligning organizational activities with its long-term objectives.
2. It involves analyzing internal and external factors to identify opportunities and threats.
3. Managerial accounting provides critical data for making informed strategic decisions.
4. Effective strategic planning can enhance an organization's competitive advantage.
5. It typically includes setting measurable goals, defining strategies, and allocating resources.

Review Questions

• What role does managerial accounting play in strategic planning?
• How does strategic planning contribute to achieving an organization's long-term objectives?
• Why is it important to analyze both internal and external factors during the strategic planning process?

Related terms

Tactical Planning: Focuses on short-term actions and plans that support the overall strategy.

Budgeting:

The process of creating a plan to spend an organization's resources over a specific period.

SWOT Analysis: A tool used in strategic planning to identify strengths, weaknesses, opportunities, and threats.