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The upper-level managers of Deluxe Coffee are meeting to discuss the company's long-range goals and vision. Like any organization, Deluxe Coffee should adopt planning and strategic management for just two reasons: (1) to provide direction and momentum and (2) to encourage retention of high-value employees.

a. true
b. false

1 Answer

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Final answer:

The statement in question is false; planning and strategic management are crucial for many reasons beyond providing direction and retaining valuable employees. They also ensure effective market response, align operations with company objectives, facilitate resource allocation, and assist in governance and professional development within the company.

Step-by-step explanation:

The statement that Deluxe Coffee should adopt planning and strategic management for only two reasons: (1) to provide direction and momentum and (2) to encourage retention of high-value employees is false. While these are critical aspects, planning and strategic management serve a broader array of functions. They are integral to ensuring that the company responds effectively to changes in the market, aligns operations with the company's mission and objectives, enables resource allocation, fosters innovation, and supports a myriad of other strategic goals that contribute to the company's success.

In practice, the involvement of top executives in selecting board of director candidates ensures that the company's leadership is aligned with the strategic goals and shareholders' interests. However, this can also lead to a concentration of power among a few individuals.

Strategic management and planning are vital in maintaining a balance between executive influence and shareholder interests, which can lead to a better-governed organization. Besides offering direction and aiding in the retention of valuable employees, strategic management supports organizational structure understanding, role clarity, and helps to identify the pathways for professional growth.

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