Models of Strategic Planning

There are many models that are useful in the process of strategic planning in the economic, finance and management fields. The objectives of a market are developed by the marketers but are not integrated with the theories that are general in a firm. 

  • Neoclassical Model:

          This is used for the maximizing of profits of a firm in a classic mode. Output is considered as the main concern of a firm owner. This singular model has shown weaknesses while approaching it in many years. Let us consider a example where the levels of risk are varying on the decisions made for investment by the managers which leads to failure in profitability maximum. 

  • Market Value Model:

Considering the present market conditions the maximization of the value of firm is considered. The shareholder values the management goal’s centerpiece in maximizing the firm. 

  • Agency Cost Model:

The existence of contractual relationship among the stakeholders and managers has been assumed under this model. Stockholders make the managers to perform well all the time is assumed in this model. And also constant monitoring is to be maintained by the stockholders. 

  • Behavioral Model:

Various groups are added up to form a firm and it odds other goals for the firms is been accepted by the behavioral model. The profits are being maximized hardly as because of the wide conflicting goals that are being produced by the firm participants. 

  • Resource Dependence Model: 

Resource dependence model is as similar as behavior model which accepts many conflicting groups of an organization. The emphasis is being laid by considering the need of extracting the resources of stakeholders. The reconciliation of conflicting goals is performed so that the demands and expectations of all stakeholders are to be met in the plan of strategic.