Strategic planning who is involved

Rather, formal corporate strategic planning has the more modest, if no less crucial, purpose of seeking to optimize the collective thrust of the continuing businesses.

The ax is much more merciful than the slow strangulation of providing inadequate resources. In the meantime, until the ax falls, division management must prove the viability of its business. For its part, headquarters must not fail to recognize the difference between a sound plan and a sound business.

A sound plan deserves approval, but only top management can decide whether the business is sound enough to continue implementation of that plan. The second planning cycle also has two purposes. First, each division head and his functional subordinates should reach tentative agreement on the action programs to be implemented over the next few years. Second, the involvement of functional managers in the long-range planning process should deepen and sharpen the strategic focus of the business and thus provide a better basis for the even more detailed budgeting task to follow.

At this time he usually does not make explicit the sales or profit goals, even though tentative agreement on targets has been reached. There are two reasons for dealing in generalities at this point. Long-range planning by functional managers is conceptually a simple process, being limited by the tentative agreements reached in the first cycle. It is operationally more complex than the planning activity in the first cycle, however, since it requires substantially more detailed plans and involves many more people.

Inasmuch as the resources available for implementation are always limited, programming must help ensure their optimal use. Obviously, the scope, magnitude, and duration of a program depend on the nature of the goal.

In such a situation, the division program may be international in scope, almost unlimited in breadth of product line, and may involve hundreds of millions of dollars in expenditures. His actions also fulfill the definition of a program. The need to formalize the programming process grows as functional interdependence in the business increases and as more time is required to evaluate the effectiveness of alternative functional plans.

Formalization is designed to improve the specification of programs and the matching of programs and goals. Within those constraints, however, he may still enjoy very broad discretion concerning the best course to take.

His challenge is to devise more effective ways to combine the available resources in order to achieve his goals. A useful way to look at the specification of programs is in terms of the chronology for involvement of the functional departments. In a typical manufacturing enterprise there are four types of programs to be developed:. The programming process, even when formalized, is inevitably haphazard because it requires repeated interaction among the departments.

The intended result is a plan that is integrated like the two sides of a coin. On one side is the set of action programs and on the other a coordinated statement of the resources needed by each functional manager to execute his part of the program.

A major purpose of the formal programming process is to review the ongoing programs to see whether they can be expected to fulfill the goals for which they were designed. Or, if more effective programs have been devised, the existing ones must be modified or discontinued. Programming also involves coordination of functional activities to ensure that the selected programs can be implemented efficiently.

Each functional department must understand the implications of a set of programs for its own activities, and the department manager must accept the tasks assigned him and the resources to be made available to him. In our mythical Company X, after much analysis and discussion the division manager and his functional subordinates finally agree by the end of August on a set of programs to recommend to headquarters.

This time, in contrast to the first, a more elaborate presentation is in order and a large number of managers—corporate and division, line and staff—may attend. The third cycle of the formal planning process needs little explanation. Naturally, throughout the planning process top managers and division executives often discuss the allocation of resources among the divisions. But it becomes the focus of attention in the last step of the second cycle, when the divisions have completed their program proposals and sent them to the head office for approval.

At this point mid-September at Company X , decisions on allocation of resources can be made, subject to final approval when the detailed budgets are submitted in mid-November. These general points are worth making here:. The formal long-range planning process in large, diversified corporations is both simple and complex. Conceptually, the process is very simple—a progressive narrowing of strategic choices—although it may involve many steps along that path.

Operationally, the process is far more complex than the activities we have described because the formal part of the process is only the tip of the iceberg. Good strategic planning can take place only when qualified managers engage in creative thinking—and creativity, by definition, cannot be produced on a schedule.

So why not let us do some work for you? I really enjoyed reading the article about the strategy planning. There are many things I was not aware before. Fantastic article!! Done with clarity. But my question has always been, at what point does the goals and objectives come in the strategic Planning process?

Thanks for reaching out! This can depend on the business owner. The information from these analyses can help create meaningful goals and objectives. I appreciate this greatly. Thank you! I enjoyed reading the article. Thank you for providing the overview about the topic. Examples and links are very useful too. Any discussion on Strategic Planning is good discussion — it is such a critical element of any organisation that aspires to be good and dares to be great.

Informative article! You have made strategic planning so easy to understand. But how do i reference this article in an academic paper? Vo, Eric. I fully agree with you. The article is useful, but mostly for beginners and students.

But it is informative and I liked it as well. Thank you for sharing this very informative article. It will definitely guide me in conducting our own Strategic Planning at our office. I definitely enjoyed every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog and have some great content.

Keep up the good work. SEO canada. Companies first come up with strategic plan to establish their long term goals and objectives along with general actions to be taken to support those goals and objectives.

You then establish policies to ensure that your team is staying within those actions. For example, your strategic plan may say you want to increase revenues 20 percent next year in the aerospace market. Your actions will include marketing campaigns and outreach events. Your policies will then ensure that your team are not undertaking actions that are not included in these campaigns and events.

Thank you for this article. It helped me to understand the strategic planning process, which is something I am studying and this was straightforward and to the point. This article is a good basic overview. Something that must be emphasized is translating the strategic plan into specific actions with measurable outcomes. If you go into work on Monday after completing your plan and do your work the way you did before the plan, then the plan has already failed.

I see this frequently in the businesses with which I work. Another key is to clearly tie individual staff roles and performance expectations and goals to the strategic goals.

Thanks for sharing. This is very helpful to business owners and managers. As it is said, the strategic plan need to be flexible, same applies to getting knowledge of strategic plan as business environments keep changing. Thanks for so much for the this exciting read. Strategic planning is important to an organization because it provides a sense of direction and outlines measurable goals.

Strategic planning is a tool that is useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward. Found an another website Evolvetraining.

I really enjoyed reading the article. It was written in simple language and in a manner that helped me identify key points under each subtitle. I am going to use this as a guide to some strategic plans am working on, thanks.

I actually appreciate this piece. The writing is incredibly beneficial. My gratitude to the masterminds behind this program, Cheers. Your article is helpful if you have employees, but how does this work if you have sub-contractors? Do you get them involved? Now i have an insight of what strategic planning is. So what can be the sub-topics to include when writing an essay? Great article. Thanks for the detailed information. Very interesting and valuable document. Enjoyed reading the participatory role of employees.

Thanks a lot. Interesting read. This article is a meta-analysis of empirical studies on strategic planning and organizational performance. It shows whether and when strategic planning actually works based on quantitative evidence. Great article on strategic planning for small businesses. I agree with the statistic you quote from Constant Contact. In my work, I find that most business owners can only think and plan about a year out. For many business owners, this is the first time they have ever been where they are.

The second is the rate of change in the economy, which only speeds up each year; it is just that very few businesses have the tools and expertise to keep pace with the change.

Step 3: Conduct a Competitive Analysis The reason to do a competitive analysis is to assess the opportunities and threats that may occur from those organizations competing for the same business you are.

Here are a few other key ways a competitive analysis fits into strategic planning: To help you assess whether your competitive advantage is really an advantage. To provide information that will help you evaluate your strategic decisions against what your competitors may or may not be doing.

What do you want to capitalize on? Questions to Ask: What new needs of customers could you meet? What are the economic trends that benefit you? What are the emerging political and social opportunities? What niches have your competitors missed? What do you need to mitigate? Questions to Answer: What are the negative economic trends? What are the negative political and social trends? Where are competitors about to bite you? Where are you vulnerable? Step 5: Identify Strengths and Weaknesses Strengths refer to what your company does well.

What do you want to build on? Questions to Ask: What do you do well in sales, marketing, operations, management? What are your core competencies? What differentiates you from your competitors? Why do your customers buy from you? What do you need to shore up? Questions to Answer: Where do you lack resources? What can you do better? Where are you losing money? In what areas do your competitors have an edge? Step 6: Customer Segments. Phase 2: Developing Strategy Want More? What is our purpose?

Why do we exist? What do we do? Questions to Ask: What does your organization intend to accomplish? Why do you work here? Why is it special to work here? What would happen if we were not here? Outcome: A short, concise, concrete statement that clearly defines the scope of the organization. Step 2: Discover Your Values. ST Protective Strategies: Strategies that use strengths to minimize threats.

WT Defensive Strategies: Strategies that minimize weaknesses and avoid threats. Step 1: Implementation Schedule Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals. How will we use the plan as a management tool? Questions to Ask: Communication Schedule: How and when will you roll-out your plan to your staff?

Managing the planning process is an almost incidental role for the assistant, since he merely formalizes the analysis that leads to a coordinated set of action programs. In a large company, the corporate planners organizational status can have significant symbolic value in conveying to division managers the importance of formal strategic planning and the difference between it and conventional budgeting.

He helps corporate management do a better job of resource allocation among the divisions, partly by assisting the division managers in strategic planning for their businesses.

But he must not succumb to the temptation to become more involved in formulating the plans, or he may lose his effectiveness.

His tasks differ greatly from the mainly analytical role of the planner in the small company. The steps in a typical planning system represent an orderly, gradual process of commitment to certain strategic alternatives. Each step is, theoretically at least, linked to those preceding.

Although few companies expect to achieve this financial linkage in narrowing the choices, all the parties involved in the process should understand the intended relationship between the cycles. How fast this narrowing should be is a situational design question that depends on the particular corporate setting. A tight linkage between planning and budgeting indicates that more strategic commitments have been made at an earlier stage.

A loose linkage, on the other hand, implies that the narrowing process is slower and will occur mainly late, in the budgeting stage of the process. Exhibit II shows examples of slow versus rapid narrowing profiles. Notice that a company that does little narrowing in the early stages faces the task of considering a large number of strategic issues in the budgeting stage.

A small company with little diversity in its operations may wish to adopt an early or rapid narrowing process, since the functional and corporate executives involved are thoroughly familiar with the strategy of the few businesses in question.

Then functional managers can proceed directly to the development of action programs to continue implementation of that strategy. In a large company, linkage is usually looser and the narrowing process more gradual. During the start-up phase top management should give division managers plenty of time to devote to strategic thinking about their businesses—but the lower-level executives must remember to differentiate that activity from long-range budgeting, with its related requirement of divisional performance fulfillment.

As the system matures, however, management can gradually accelerate the narrowing process without jeopardizing the creative aspect of planning. A natural result of this progress is a more precise definition of the linkage between the planning cycle and the budgeting cycle. The top executives believe that this development is a natural consequence of their increasingly cohesive strategic points of view. In sum, significant differences exist between the planning procedures used in the two types of companies we have examined.

The issues that management must address, and our attempt to delineate what is good practice in small and large companies, are summarized in Exhibit III. In companies that are not very diversified and are functionally organized—as well as product units of diversified corporations—top management carries on the strategic thinking about the future of the business. In such companies, a formal process to help organize that reflective activity is frequently unnecessary, in view of the few managers involved.

Instead, formal strategic planning focuses on the development and review of innovative action programs to implement the strategy. The planning system reflects that focus: goal setting is top-down, linkage to the budget is tight, and the staff planning officer plays a major role as cross-functional program analyst and environmental scanner. In companies that operate in several industrial sectors and are organized into product divisions, initiating a formal strategic planning process is a major task.

The first year or two of such an effort must be viewed as an investment in fostering a planning competence among division managers; the payoff in better decisions at the corporate level must wait until the system matures. If the planning system is to survive as more than an exercise in pushing numbers into the blank spaces on neatly designed forms, it must evolve rapidly along several dimensions.

A mature system, however, can be invaluable, helping both corporate and divisional executives make better and better-coordinated strategic decisions. Any company—indeed, any organization—is a dynamically evolving entity whose situational setting is subject to change. Accordingly, to remain effective, the design of the planning process is a continuous task requiring vigilance and insight on the part of management. You have 1 free article s left this month.