Back To: BUSINESS STRATEGY
Strategic Planning Definition
Strategic Planning is the stage of formulating plans that incorporates taking into account the available resources, allocating said resources to critical tasks, and having all the steps charted out to achieving a particular goal. It also includes various checks and balances in the plan to adapt the strategy according to the results of the execution.
Strategic Planning has been a mainstay in corporate governance since the 1960s. Strategists formulate plans in accordance with their analysis of research data, social and economic cues, resource and time constraints, and the ultimate goals of the organisation.
A Little More on What is Strategic Planning
Although Strategic Planning has numerous definitions and applications, in its most basic form, it is the formulation of a concrete plan and mobilisation of resources towards realising a purposeful goal. It describes the intermediate steps involved in reaching the conclusion. It specifies the who, how, and what of making a particular event happen. It takes into account all the external and internal factors that will have an impact on the execution of its tasks, and adapts accordingly to achieve a desired end. Strategic Planning can be intentional with end to end planning, or emergent with adaptive measures kicking in at every turn.
Strategy encompasses the formulation as well as execution of the plans. It analyses the data at its disposal at every turn, and adapts the strategy to gun for the most optimal outcome at any given point.
Requirements for Strategic Planning – Inputs
Before formulating a plan of action, strategists take into account all the factors that can help their cause or deter their efforts. Research data is gathered via conducting interviews, studies, reviewing publicly available information, analysis of market forces, micro and macroeconomic factors, political climate, trends forecasts, resource limitations, man power, and personnel domain expertise, are all carefully considered before forming a plan. A thorough analysis of these factors and the interplay between them helps Strategic Planners formulate strategies that utilise factors conducive to their goals while sidestepping hurdles to achieve organisational goals. The strategy also takes into account an organization’s vision, mission, and values, shareholder expectations, and stakeholder responsibilities before coming up with its plans for the growth of the organisation.
Results of Strategic Planning – Output
Strategic planning documents with carefully laid out goals, steps leading to these goals, resources allocated for each of these steps, timelines and quality parameters, competitor and market analysis, and policies and procedures to be followed for the successful execution of the strategic plan are the typical outputs of a Strategic Planning. The plan may be laid out for years at a stretch but updated every year to adapt to current trends.
The Execution of A Strategic Plan – Outcome
Once a strategy is in place, all the stakeholders are informed of their roles in the execution. Communications channels are opened between stakeholders to bring everyone on the same page. Operational procedures like creation and management of teams, task delegation, charting of progress, updating results, and updating the strategic plan in accordance with the latest results of tasks execution happens at this stage.
Organisations use a wide array of measuring tools and techniques to gauge whether a strategic plan was successful in its execution and in achieving the goals of the organisation. Common parameters used across industries are balance sheets, income statements, net profits, shares performance, etc.
Implementation of Strategic Plans yields outcomes that may or may not be commensurate with the original goals. The closer these outcomes are to the intended goals, the more successful the execution. Unintended outcomes may also be expected owing to unforeseen circumstances.
References for Strategic Planning
- https://www.mindtools.com › Strategy Tools › Start Here
Academic Research on Strategic Planning
The fall and rise of strategic planning, Mintzberg, H. (1994). Harvard business review, 72(1), 107-114. This paper charts the course of Strategic Planning, its decline and rise in corporate planning.
Strategic planning-forward in reverse, Hayes, R. H. (1985). Harv. Bus. Rev.;(United States), 63(6). This paper proposes an alternative approach to traditional Strategic Planning by turning the concept of formulating strategies in accordance with preset goals on its head. It suggests a means-ways-ends approach to overcome the modern industrial competition trends.
Research thrusts in small firm strategic planning, Robinson Jr, R. B., & Pearce, J. A. (1984). Academy of management Review, 9(1), 128-137. This paper presents a study of 50 planning related firms and their efforts on research for Strategic Planning.
Marketing, strategic planning and the theory of the firm, Anderson, P. F. (1982). The Journal of Marketing, 15-26. This paper tries to break down the relationship between corporate goals and Strategic Planning.
Strategic thinking or strategic planning?, Heracleous, L. (1998). Long range planning, 31(3), 481-487. This paper takes a look at the literary views behind the terms ‘Strategic Planning’ and ‘Strategic Thinking’.
Strategic planning in a turbulent environment: Evidence from the oil majors, Grant, R. M. (2003). Strategic management journal, 24(6), 491-517. This paper studies Strategic Planning under harsh conditions with data from the Oil industry.
A dialectical approach to strategic planning, Mason, R. O. (1969). Management Science, 15(8), B-403. This paper proposes an alternative approach to Strategic Planning with emphasis on dialectical factors.
Strategic planning for management information systems, King, W. R. (1978). MIS quarterly, 27-37. This paper sheds light on Strategic Planning for Information Systems management.
Strategic planning and firm performance: A synthesis of more than two decades of research, Miller, C. C., & Cardinal, L. B. (1994). Academy of management journal, 37(6), 1649-1665. This paper tests empirical data from 26 studies to highlight the inconsistencies in firm performances in light of Strategic Plans or the lack thereof.
Strategic planning as competitive advantage, Powell, T. C. (1992). Strategic Management Journal, 551-558. This paper presents the case for the advantages of Strategic Planning in corporate governance.