Importance Of Strategic Planning

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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... ... middle of paper ... ...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.

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