Strategic Planning is the process of an organisation developing a strategy to achieve their goals or objectives, to establish an overarching vision and direction to guide a company and develop a comprehensive plan on how the company will operate. This requires managers to make decisions on how the business allocates resources in order to pursue their strategy and fulfil their objectives.
The Oxford English Dictionary defines a plan as “a set of things to do in order to achieve sth, especially one that has been considered in detail in advance.”
The statement “Organisations that fail to plan are planning to fail” indicates that organisations which do not plan how they will achieve their business objectives will be unsuccessful. The statement also suggests that it is also applicable to the management of an organisation.
Planning can be defined in two ways, whether if it is formal or informal.
Informal planning is usually more common in a small business or organisation. Informal planning is is unwritten and due to that there is limited communication of the plan in the organisation.
Formal planning means defining specific goals for a time period. These goals are recorded and shared throughout the organisational structure so there is clarity in all levels.
Latham (2004, pg 126) states that “Goal-setting theory also asserts that people with specific hard goals perform better than those with vague goals.” As a result formal planning addresses the wider organisational structure with a focus on achieving business objectives because it facilitates the formalisation and systemisation of all the processes.
During formal planning, managers establish goals or objectives for a specific time period for a business, studies such as Delmar & Shan...
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...imises wasteful activities such as overlapping and redundancy. Finally through the establishments of clear goals and operational standards managers are able to assess the business’s progression towards their objects and exercise control and are able to take corrective action in the case of significant deviations.
Miller & Cardinal (1994) have studied the relationship of planning and performance through analysis of previous published studies and have found that results suggest that strategic planning positively influences firm performance.
If an organisation fails to plan for the future they will be unable to adapt to change and consequently be unable to operate effectively in their environment. So in regards to the statement that "Organisations that fail to plan are planning to fail” planning offers much more benefit and value to an organisation than not planning.
Finarelli, M. (2009). Intended consequences: How changes during strategic planning can make or break a plan. Retrieved on October 10, 2011, from http://www.hss-inc.com/documents/SHSMD-MariaNovSpectrum.pdf
(Yoder-Wise, 2015) During the process of planning you need to assess your internal and external environment, identify any opportunities and threats. Then you want to create your plan and identify your goals and objectives, implement the plan and lastly you evaluate and make any necessary changes. In strategic marketing, you want to identify your target market and research it. When planning you identify your strategies and objectives you identify what services you will provide and at what cost an how you’re going to market your plan. You can evaluate by getting feedback from consumers through different
A formal strategy must be followed in order to accomplish company goals. Managers are required to be experienced, educated, flexible, and informative in their capacity to undertake meaningful ventures. The success of companies depend on current, and creditable information which allows for a formidabl...
Definition - A company’s strategic plan lays out its future direction and business purpose, performance, targets and strategy.
Maragos, Marie. "Organisational Planning and Goal Setting." Managing and Leading Organisations. The University of Melbourne. The Basement Theatre, Melbourne. 18 Aug. 2011. Lecture.
Strategic planning consist of four steps starting from defining the company’s mission. When talking about a mission were talking about a certain phrase or slogan for say, that is intended to draw attention to customers and make them want to be even more loyal to the company. For example Walmart says, “Save money. Live Better”. Therefore, Walmart’s mission would be to let people know that they have low prices all day every day, insinuating that their products are affordable for everyone. This is a good mission because it gets the majority of the people in this world to want to go out and save money on their everyday necessities and even luxuries. The second step would be to set certain objectives and goals for the company as well. For example, CVS did use “Health is everything” as their mission and this didn’t just set out for a name it became a goal as well. Sooner or later you must set goals on your mission to understand the level that you need to get to and reach. Another example of a goal that I believe CVS set was to start selling healthier products. In the chapter it says that CVS stopped selling tobacco and other products that
Businesses do not plan to fail, they fail to plan. In my opinion, the planning process is a vital component towards successful operation of any business, thus i believe the above statement to be correct. According to Stephen Chapman, planning is defined as ‘the process of setting targets and deciding how to achieve them. It acts as a link between the business owner’s ideas and the actual operation of the business’. (2011 pg. 396) It is a managerial and leadership task and is such an integral part of managing a business, especially in today’s rapidly changing environment.
“Planning: is specifying the goals to be achieved and deciding in advance the appropriate actions needed to achieve those goals” (Bateman & Snell, 2004, p. 16).
The first function of management is planning. Planning is a process that managers use to identify and involve goal setting and decide the best way to achieve the goal.(Bartol 2007) Planning connect the gap between where we do, where we intend to go. It predict the possible things to happen which would not otherwise happen (MSG 2012). There are several steps to the planning process, which are determine the goals of the organisation, evaluate the current position, consider possible future conditions, identify possible alternative actions and choose the best. Planning is the criteria thinking through goals and making decision to achieve the goal of the organisation’s objective, which requires a systematic way. Also objectives focus the managers how to achieve the final result as managers have to predict anything will happen, avoid the problem and fight back to competitors. An example of planning, which is the President Canon Inc Tsuneji Uchida and lead Canon Company become the no.1 in the global business (Canon.Inc 2011). Tsuneji Uchida has to understand what is the company objective and goal. First, make decision to protect the position and the aim of canon, improve the operation more diversity. Second, he creates the new design of camera and new technology, he plan to do these things to maximise profit.
If asked what strategic planning is one could interpret it as simply a road map that can guide the organization in the right direction. It is very unlikely that an organization would know which direction to take without a sense of direction. Managers are faced every day with decisions that have a major impact on the direction the organization must take, therefore, strategic planning can play an important role in guiding managers in the right direction. In other words strategic planning is a tool that management can use to give them a sense of direction that will guide them in doing a better job and to ensure that all the members of the organization are working toward the same goals
...ompletes an analytical assessment of a firm. A firm establishes its competitive building by investing scarce resources again and again in its value-added activities. By doing this the organizations will be able to give rise superior products and services that the buyer's desire and continue to grow the business and adhere to its strategic plan once implemented.
...c management or planning presents a structure or agenda for dealing with issues and solving problems, therefore, understanding potential risks or pitfalls of strategic management and being prepared to deal with them is critical and vital to success. Strategic management not only permits top leaders and managers to be more proactive than reactive in building or developing their own potential or outlook in an organization, and it also lets them to make the first move and influence activities, consequently, executives and management can control or in charge of the company’s own future, and achieve its main goals and objectives. Overall, increasing cost-effectiveness and efficiency, improving the value for its stakeholders, and advancing customer services and management excellence are the key objectives of strategic management and decision making in an organization.
As Schermerhorn states in Management planning, organizing, leading, and controlling are the tools needed by managers to accomplish performance goals. It is crucial that managers be able to recognize and act upon problems or opportunities as they arise. Planning is perhaps the cornerstone of the four processes. All good processes were at some point given great detail so as to anticipate possible problems and solutions to those problems. When the Honda Motor Company decided it needed to refine its inventory they didn't just jump at the first idea that was proposed; they first set their objectives and discussed ways to meet those objectives. After giving careful consideration to processes and the streamlining of those processes human error rose as the top need for change. Sounds simple you might respond; in reality it is much more complicated.
As stated above, supported by Mathis R.L and Jackson, J.H (2012), the strategic plan of an organization emanates from its vision and mission. Such plans are reached after due consideration of the factors which affect the success or otherwise of the processes and outcomes of such plans. These factors are both internal (the strengths and weaknesses available in the resources; both human and material within the organization) and external (the threats and opportunities available outside the organization; dynamism of the business world, globalization trend, the impact of information and communication technologies on world business). As mentioned by Whittington (2001) cited by Pilbeam & Corbridge (2010), senior managers who come up with strategies for their organization should do so considering two dimension; the processes of such strategies and the outcomes. According to him, the processes are either deliberate or emergent while the outcomes are either profit maximization or pluralist in nature (including other goals and interests of the organization). In my under...
A challenge in strategic planning is to decide what bits and where bits of information will be used to support business decisions. In general, strategic plans can fail for two types of reasons: inappropriate strategy and poor implementation.