Topic 2-Strategic Planning

Steps in strategic planning process (2)

Analysis of organizations external environment to identify opportunities and threats.

Steps in strategic planning process (3)

Analysis of organizations external environment to identify organizations strengthens and weakness.

Purpose of goals (2)

Goal setting practices affect planning. Effective goal setting promotes good planning and good planing facilitates future goal setting. Without goals, plans would have little meaning. The implementation of plans focuses on achieving goals. The successful implementation of plans makes the task of setting future goals easier.

Goal

Goals are general statements of aims and objectives to be achieve by organizations

Purpose of goals (3)

Goals can serve as source of motivation to employees of the organization. Goals that are specific and moderately difficult can motivate people to work harder, especially if attaining the goals is likely to result in rewards.

Purpose of goals (4)

Goals provide an effective mechanism for evaluation and control. This means that performance can be assessed in the future if previous goals have achieved successfully.

Purpose of goals (1)

Goals provide guidance and a unified direction for people in the organization. Goals assist in defining direction and emphasize the importance in getting there.

Strategic Planning

Is the task of selecting corporate mission, analyzing the environment, both external and internal, and then selecting an appropriate strategy - this is also known as strategy formulation.

Key factors needed for effective strategic planning

Key factors needed for effective strategic planning i. Leadership and management - requires strong and personal leadership. The vision, the dynamism, or the energy of the executive to translate the right strategy into collaborative action is very important. ii. Communication for the top management - Top management must recognize their responsibility for strategic planning and be committed to doing it. Top management responsibility and commitment must be seen by the lower levels and staff generally. iii. Climate for planning - Top management must ensure that climate for effective planning is established and maintained. A proper climate is where planning is understood and accepted as part of the normal management process or part of business as usual. iv. Participation of the staff - Strategic planning must be carried out in a participatory manner form the lowest of the organization. Every staff needs to own the plan. v. Clear communication to every staff - Strategic planning and the plan must be communicated to very staff. It is important that staff must know where the organization is going, what are the priorities and hwy. If every staff is informed then they will willingly contribute towards improving and developing organization.

Different levels of goals (1)

Mission - an organizational mission is a statement of its fundamental unique purpose that set a business apart from other firms of its type, identifies the scope of the business operations in production and market terms.

Different levels of goals (4)

Operational goal - These are set by and for lower level managers. Their concern is short-term issues associated with tactical goals.

Different levels of plans (3)

Operational plan - these are plans focus on achieving operational goals. They developed by lower and middle managers and have short term focus and relatively narrow scope. There are two types of operational plans: - Single-use plan & standing use plan

Plans

Plans - plans are statements of actions to be done to achieve organizational goals

Steps in strategic planning process (1)

Selection of corporate mission and major goals

Operational plan (1)

Single use plan - developed to carry out a course of action. It is likely not to be repeated in the same way in the future. Common forms are programme & project plans.

Operational plan (2)

Standing use plan - is set and used for activities that occur regularly over a period of time. It is aimed at enhancing efficiency by standardizing decision making. Policies, standard operating procedures, staff manuals, rules and regulations are examples.

Different levels of goals (2)

Strategic goal - these are goals set by and for the top management of an organization. They focus on broad and general issues and directions.

Different levels of plans (1)

Strategic plan - these are set ad developed to achieve strategic goals. This is a general plan which outlines decisions of resource allocation, priorities, and action steps necessary to achieve strategic goals. Plans are set by board of directors and top management. They have an extended time horizon and address questions of scope, resources deployment, competitive advantage and synergy.

Steps in strategic planning process (5)

Strategy implementations.

Strategy

Strategy is a plan to achieve goals. It involves rational planning which a conscious effort is aimed at: i. Analyzing the environment ii. Choosing goals iii. Identifying courses of action iv. Allocating resources according to plans

Different levels of goals (3)

Tactical goal - these are set for and by middle managers. They focus on how to put into operation actions necessary to achieve strategic goals.

Different levels of plans (2)

Tactical plan - these are aimed at achieving tactical goals. They are developed to implement specific parts of strategic plan. Plana are made by middle upper management and they are concern with actually getting things done, and not so much with deciding what is it to be done.

Steps in strategic planning process (4)

The selection of strategies that built on organizations strengths and correct weakness in order to take advantage of the external opportunities.

Features of successful strategic planning

i. It must lead to action ii. It must build a shared vision that is value-based iii. It is an inclusive, participatory process, in which all staff members to take on shared ownership iv. It accepts accountability to the community v. It is externally focused ad sensitive to the organizations environment vi. It based in quality data vii. It maintains openness to questing the status quo viii. It is a key part of effective management.

Criticisms of strategic planning

i. Planning equilibrium - if all organizations have strategic technique, the ideal of competitive advantage may no longer exist. Thus, a planning equilibrium is said to exist. In the real world there is no such thing as planning equilibrium. ii. Planning under uncertain - the future is inherently unpredictable. Managers always assume that is possible to predict the future accurately. However the real world is always changing. iii. Ivory tower planning - planning has always been done by top management who have little understanding and appreciation of operation realities. iv. Strategic intent versus strategic fit - the fit model is too static and limiting. It focusses on the degree of it between existing resources and current environmental opportunities. It does not focus on new resources and capabilities to accrete and exploit future opportunities. The fit model tends to put a lot of emphasis on strategic fit and less on strategy intent. Strategic intent means setting ambitious goals which stretch the organization and then finding ways to build the resources and capabilities to attain those goals.