4. Strategic planning is a process in which organizational leaders determine their vision for the
future as well as identify their goals and objectives for the organization.
Strategic planning is a process of decisions made by an organization to set goals and to
outline a course of action to achieve those goals, to grow the business and to help the
be profitable.
What is Strategic Planning
5. What is not Strategic Planning
1. Strategic Planning does not attempt to make future decision. Decision can be made only in Present.
2. Strategic Planning is not forecasting Product Sales & then determining what should be done to assume
the fulfillment of the forecasts with respect to such things as material purchases, facilities, manpower etc.
Strategic Planning goes beyond present forecasts of much more fundamentals such as:
- Are we in the right business?
- What are our basic objectives?
- When will our present become obsolete?
- Are our markets accelerating or eroding? Gap Analysis from present to future.
3. Strategic Planning is not necessarily the preparation of massive, detailed, interrelated sets of plans.
4. Strategic Planning is not an effort to replace managerial intuition & judgment.
5. Strategic Planning is not a simple aggregation of functional plans or an extrapolation of current
budgets. It is a systems approach to maneuvering an enterprise over time through the uncertain waters
of its changing environment prescribed aims.
6. Benefits of Strategic Planning
Strategic planning is an organizational management activity that is used to set priorities, focus energy
and resources, strengthen operations, ensure that employees and other stakeholders are working toward
common goals, establish agreement around intended outcomes/results, and assess and adjust the
organization's direction in response to a changing environment. The benefits of strategic planning are
below:
7. 1. Able to set more realistic objectives that are demanding, yet attainable.
2. A need for better information for decision-making may be recognized.
3.Growth can be accelerated and improved.
4.Poor performing areas can be identified and eliminated
5.Gain control of operational problems.
6.Develop better communications with those both inside and outside of the company.
7.Provides a road map to show where the company is going and how to get there.
8.Develops better internal coordination of activities.
9.Develops a frame of reference for budgets and short – range operating plans
10. Gives a sense of security among employees that comes from better understanding of
the changing environment and the company’s ability to adapt.
8. FOURTEEN PROCESSES OF STRATEGIC PLANNING
The strategic planning process includes establishing the sequence in which those goals
should fall so that the organization is enabled to reach its stated vision.
9. 1. Developing A Company philosophy : Establishing the beliefs ,values, attitude and unwritten guidelines
that add up to “the way we do things here”
2. Planning Strategy : Development of Concepts, ideas & plans to achieve objectives
3. Establishing Goals: Deciding achievement targets shooter in time range or narrower in scope than
objective
4. Setting Objectives : An objective is typically enduring and timeless
5. Establishing Policies : Deciding on plans of action to guide the performance of all major activities in
carrying out strategy in accordance with company Philosophy
6. Planning the Organization structure: The “harness” that helps people pull together in performing
activities in accordance with strategy ,Philosophy & Policies.
7. Providing Personnel : Selection, Recruitment & Training
10. 8. Establishing Procedure : For Important & recurring activities
9. Providing Facilities : Plant Equipment & other facilities
10. Providing Capital : Making sure that business has money & credit needed to provide facilities &
working Capital
11. Setting Standards : Establish measures of performance that will enable the business to achieve its long
term objective
12. Establishing Management Programs & Operational Plans: There are phases of total planning process
that include strategic Planning
13. To Provide Control Information : Supply of facts and figures to help people, follow strategy, policies,
procedures, programs: to keep alert to forces at work inside & outside the business and to own
performance against established plans & standards.
14. Activating People: Commanding and Motivating people up and down the line in accordance with
Philosophy, Policies, Procedures and Standards in carrying out plans of the Company.
11. Why Some Firms Do No Strategic Planning
Some firms do not engage in strategic planning, and some firms do strategic planning but
receive no support from managers and employees. Some reasons for poor or no strategic
planning are as follows:
12. • Lack of knowledge or experience in strategic planning— No training in strategic planning.
• Poor reward structures— When an organization assumes success, it often fails to reward success. When failure
occurs, then the firm may punish.
• Firefighting— An organization can be so deeply embroiled in resolving crises and firefighting that it reserves no
time for planning.
• Waste of time— Some firms see planning as a waste of time because no marketable product is produced. Time
spent on planning is an investment.
• Too expensive— Some organizations see planning as too expensive in time and money.
• Laziness— People may not want to put forth the effort needed to formulate a plan.
• Content with success— Particularly if a firm is successful, individuals may feel there is no need to plan because
things are fine as they stand. But success today does not guarantee success tomorrow.
• Fear of failure— By not taking action, there is little risk of failure unless a problem is urgent and pressing.
Whenever something worthwhile is attempted, there is some risk of failure.
• Overconfidence— As managers a mass experience, they may rely less on formalized planning. Rarely, however,
is this appropriate. Being overconfident or overestimating experience can bring demise. Forethought is rarely
wasted and is often the mark of professionalism.
13. • Prior bad experience— People may have had a previous bad experience with planning, that is, cases in which
plans have been long, cumbersome, impractical, or inflexible. Planning, like anything else, can be done badly.
• Self-interest— When someone has achieved status, privilege, or self-esteem through effectively using an old
system, he or she often sees a new plan as a threat.
• Fear of the unknown— People may be uncertain of their abilities to learn new skills, of their aptitude with
new systems, or of their ability to take on new roles.
• Honest difference of opinion— People may sincerely believe the plan is wrong. They may view the situation
from a different viewpoint, or they may have aspirations for themselves or the organization that are different
from the plan. Different people in different jobs have different perceptions of a situation.
• Suspicion— Employees may not trust management.
14. Seventeen Guidelines for the Strategic-Planning Process to Be Effective
1. It should be a people process more than a paper process.
2. It should be a learning process for all managers and employees.
3. It should be words supported by numbers rather than numbers supported by words.
4. It should be simple and non routine.
5. It should vary assignments, team memberships, meeting formats, and even the planning calendar.
6. It should challenge the assumptions underlying the current corporate strategy.
7. It should welcome bad news.
8. It should welcome open-mindness and a spirit of inquiry and learning.
9. It should not be a bureaucratic mechanism.
10. It should not become ritualistic, stilted, or orchestrated.
11. It should not be too formal, predictable, or rigid.
12. It should not contain jargon or arcane planning language.
13. It should not be a formal system for control.
14. It should not disregard qualitative information.
15. It should not be controlled by “technicians.”
16. Do not pursue too many strategies at once.
17. Continually strengthen the “good ethics is good business” policy.