Planning Basics

Strategic Planning

Effective strategic planning articulates where an organization is heading and the actions

needed to make progress and how it will know if it is successful. Strategic planning process is a

emerged or systematic way of performing strategic planning in the organization through initial

assessment, thorough analysis, strategy formulation, its implementation and evaluation

(Thompson and Martin, 2010).

Strategic planning is also an organizational management activity that is used to set

organizational priorities, focus resources and energy, strengthen business operations, ensure that

stakeholders and employees are working toward achievement of common goals, establish

agreement around intended outcomes, and evaluates and change the organization's direction in

response to a changing environment. Hence, strategic planning is a methodical effort that

produces fundamental actions and decisions that shape and guide an organization, its goals, its

purpose, with a focus on the future (Clark, 1997).

Strategic Plan

A strategic plan is a document used to communicate the organizations goals, the actions

needed to accomplish those goals and all of the other important elements developed during the

planning exercise.

Strategic Management

The strategic management process is a method through which managers conceive of and

implement a strategy that can lead to a viable competitive advantage. It is also the

comprehensive collection of continuing activities and processes that organizations use to

methodically coordinate and align actions and resources with mission, mission, and strategy
throughout an organization. Strategic management activities transform the plan into a system that

provides performance feedback to decision making and allows the plan to evolve and grow as

requirements and other circumstances change (Johnson, et.al, 2008).

Steps in Strategic Planning and Management (Thompson and Martin, 2010):

Strategy Execution

The process of strategic management lists what steps the managers should take to create a

complete strategy and how to implement that strategy successfully in the organization. It might

comprise of various steps and tends to be more formal in well-established organizations.

The ways that strategies are created and realized differ. Thus, there are many different models of

the process. The models vary between organizations and depending upon the organizational

culture and leadership styles.

There are many different methodologies and frameworks for strategic planning and

management. Since there are no complete rules concerning the right framework, the

methodologies most follow a similar pattern and have common features. Many frameworks cycle

through some variation on some very basic phases:

1. Analysis or assessment

This is an understanding of the current internal and an external environment is developed.

The starting point of the process is initial assessment of the firm. At this stage managers must

clearly define the company’s mission and vision and statements. Business' vision answers the

question: What does an organization want to become? Without visualizing the company’s future,

managers would not know the direction they want to go and what they have to achieve. Vision is

the final goal for the firm and the direction for its employees (David, 2009, p. 93) thorough
mission statement guides managers in making appropriate daily decisions (Rothaermel, 2012, p.

34).

2. Strategy formulation

This is where high level strategy is developed and a basic organization level strategic plan is

documented.

3. Strategy execution

This is where the high level plan is interpreted into more operational planning and action

items. Even the best strategic plans must be implemented and only well executed strategies

create competitive advantage for an organization. At this stage, managerial skills are more

important than using analysis. Communication in strategy implementation is crucial as new

strategies must get support all over organization for effective implementation.

4. Evaluation

This is where ongoing refinement and evaluation of performance,

communications, culture, data reporting and other strategic management issues occurs.
 References

Clark, D. N. (1997). Strategic management tool usage: a comparative study. Strategic Change

Vol. 6, pp. 417-427

David, F.R. (2009). Strategic Management: Concepts and Cases. 12th ed. FT Prentice Hall, p. 36-

37, 45-47, 93

Johnson, G, Scholes, K. Whittington, R. (2008). Exploring Corporate Strategy. 8th ed. FT

Prentice Hall, p. 11-13, 224, 294

Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases. McGraw-Hill/Irwin, p.

20, 32-45, 90

Thompson, J. and Martin, F. (2010). Strategic Management: Awareness & Change. 6th ed.

Cengage Learning EMEA, p. 34, 557, 790.