Strategic Planning: Goals, Types, and Stages
Planning
Planning is the act of defining the goals of the organization, identifying strategies for achieving them, and developing plans to integrate and coordinate the work of the organization.
Two Elements of Planning
- Goals: Desired results for individuals, groups, and the organization.
- Plans: Documents that explain how to achieve goals, resource allocation schedules, and other necessary actions.
Types of Plans
- Strategic: A process of organizational development, analysis of the mission and vision, goals, tactics, and the allocation of resources.
- Operating: Medium and short-term plans that will achieve the general goals.
Budgets, programs, procedures, and standards are examples of operating plans.
Kinds of Goals
- Economic
- Strategic
Types of Planning
- Utterance: Taking past events and projecting them forward. For the future, utterances cannot be changed; what you can do is adapt to them.
- Foresight: Identifying the objective in the future and doing things now to achieve the fixed objective. It does not project the past. Therefore, it does not take into account the past, but as it happened, we think of today.
Planning Stages (Hermida)
- 1. Budgeting and Financial Planning: It is seen as a financial problem, and on that basis, procedures are implemented to forecast returns, costs, and capital requirements.
- 2. Static Dimensional Planning: Static analysis is based on the opportunities present in relation to past data, and it is one-dimensional since it is based on a single current dimension. Planning becomes a routine exercise.
- 3. Dynamic and Multidimensional Business-Level Planning: Covers all dimensions of the potential field without being tied to what the company always made and sold for a given market. Changes at this stage are rapid and discontinuous.
- 4. Dynamic and Creative Multi-Level Planning:
- a. Efforts are directed toward discovering new ways to define and meet customer needs, new ways to compete more effectively, new products or services, and new strategic concepts.
- b. Consists of continually looking at options abroad.
- c. Objective: Long-term is to have a balanced business portfolio, consisting of a family of businesses.
- 5. Strategic Administration:
- a. Unlike previous stages, this stage is looking for the dedication and depth so that strategic plans are embedded throughout the organization and linked to operational decisions.
- b. Managing strategically implies that strategies guide every step of the organization, and all administrative processes and even the structure of the organization fit it.
Criticisms of Formal Planning Systems
- Balancing Plan
- Planning Under Uncertainty
- Ivory Tower Type Planning
- Strategic Intent vs. Strategic Fit
The fitted model has been attacked as being too static and limiting. The adoption of such a model for strategy formulation generates a habit in which the administration focuses too much on the level of fit between a company’s existing resources and current environmental opportunities, and not enough on generating new resources and the ability to create and exploit future opportunities. The strategies developed through the adjustment model tend to focus more on current problems than on future opportunities. As a result, it is likely that companies with an exclusive focus on adjustment for the formulation of strategies are not able to generate and sustain competitive advantage.