Strategy can be defined as the plans that businesses lay out to achieve their objectives (Sandberg, 1992). The plans that businesses set up in order to position themselves to make maximum profit include their mission, vision, goals, objectives, strategy, implementation and execution (Sandberg, 1992). For the previously mentioned plans to be successful good strategic management has to be in place. Good strategic management can be organized into three levels: corporate, business and operational levels (Ritson, 2013). The levels of strategic management can be formulated through several schools of thought. The schools of thought include the planning school, positioning school and the resource based school. The planning school of thought is a formulation that strives to make a fit between the strategy that a business has and the environment in which it is operating in (Ritson, 2013). Credit for the planning school goes to Igor Ansoff and K. Andrews (Flevy, August 2013; Ritson, 2013). The planning school is centered on a formal process that takes a rigorous approach focusing on detailed and inflexible planning (Sandberg, 1992). The planning school’s contribution to businesses is based on the ability to give clear directions and ensure resource allocation (Flevy, August 2013) . The planning school of thought is ideal for organizations that operate under tight control. Business models that use the planning school include: Scenario planning, Parenting style, Levers of control and the Theory of Mechanistic and Organic systems. The planning school of thought has limitations. There is a tendency for groupthink and can become too static. Prediction is difficult and as such it is not suitable for an unpredictable market. The ... ... middle of paper ... ...ning school places the business in the context of its industry and how it can improve its position within the industry. The resource-based school focuses on the internal resources available to the organization. It is important to understand different formulations in order to pick the perfect fit. Resources Flevy. (August 2013). Ten Schools of Thoughton Strategic Management. Retrieved February 1, 2014, from http://www.slideshare.net/flevydocs/ten-schools-of-thought-on-strategic-management Mission Statements. (2014). Retrieved January 31, 2014, from http://www.missionstatements.com/hospital_mission_statements.html Ritson, Neil. (2013). Strategic Management. In Bookboon (Series Ed.) Sandberg, William R. (1992, 1992 Spring). Strategic management's potential contributions to a theory of entrepreneurship. Entrepreneurship: Theory and Practice, 16, 73+.
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Strategic planning is defined by intestorwords.com as the process of determining a company’s long-term goals and then identifying the best approach for achieving those goals. But this definition is too broad and does not identify the true advantages of strategic planning for large to small businesses. Strategic planning provides the foundation for the policies, procedures, and strategies for obtaining and using resources to obtain the goals of the organization. Some believe that in today’s rapidly changing environment, strategic planning is becoming more difficult and therefore more obsolete because changes are occurring so fast that plans-even those set for just months into the future-may soon be obsolete. The fact is that with the fast changing environment it is even more important to have strategic planning in every business today.
It tells a layman business person or a person interested in setting up a business soon that a strategy is about planning for the future. It is to plan the future in a way that makes it easy for the managers to set up objectives and for the employees to follow those objectives (McKeown, 2012). The book gives examples of successful business persons and how they made their business strategy when they came into the business field. There are examples of people, who found success instantly, and there are also examples of business persons who struggled at first, but then after reshaping the strategy they were able to effectively conduct their business. It is very helpful for new entrepreneurs to know about these strategies so that they could also learn and implement it in their
As per Henry Mintzberg, former president of the Strategic Management Society, “strategy cannot be planned because planning is about analysis and strategy is about synthesis. Strategic planning involves a structure or framework, a set of procedures both formal and informal, and of course content. Beyond these basic elements, the underlying assumptions about strategic planning are that the future can be anticipated, forecasted, managed or even controlled, and that the best way to do so is to have a formal and integrated plan about it in place. The process of planning itself may turn out to be more important than the results, and that process requires both analysis and synthesis. Planning simply introduces a formal “discipline” for conducting long-term thinking about an institution, and for recognizing opportunities in and for minimizing risks from the external and internal environments.
A strategic planning is a backbone for support the process strategic management. It is also main process in handling the strategic management. Various definition about strategy but generally involves setting the goals and others. Any organization must look at to strategy planning for achieve their vision, mission, values and core strategy. In today, an organization must face many challenges for success in their goals and objectives. They must think carefully for making decision if they want high effectively in the organization. The strategic planner always thinks outside the box for make their organization become success. This strategic planning process affected the effectiveness of organizational. Thompson and Strickland (1989) add that galvanizing
Dess, Lumpkin, Eisner, & McNamara. (2014). Strategic Management : Creating competative advantages. New York: McGraw-Hill Education.
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...
Alongside the design school, the planning school grew in the strategic field. It is quite similar to the design school but argued that the formulation process of strategy was formal. It was grounded on the systems theory of the social sciences