The Success of Strategic Plans in Modern Businesses - Coursework Example

Strategic Thinking critical analysis Introduction The success of strategic plans in modern businesses is depended on the ability of their plannersto identify the characteristics and the needs of the organizational environment; at the next level, it needs to be ensured that the business plan initiated will perform as expected; the response of the internal and the external environment to the particular plan has to be estimated – as possible. The success of the above tasks requires the use of a critical approach appropriately customized in accordance with the characteristics of the particular activities; strategic thinking is the critical approach used for evaluating the needs and estimating the potential performance of key organizational plans. Strategic thinking can be involved in other areas also – for instance in the development of military plans. Current paper focuses on the examination of strategic thinking as part of the business activities; the forms of strategic thinking – as identified by theorists and researchers – are presented and analyzed using appropriate examples, where available. It is proved that strategic thinking is an important element of successful leadership; however, the characteristics of strategic thinking in business may be differentiated – under the influence of the internal and the external organizational environment. As a consequence, the power of strategic thinking to influence the performance of business plans is not standardized. 2. Strategic Thinking – critical analysis of role and characteristics One of the most important problems of academic research in regard to the business planning is that emphasis is given on the strategic choices of business planners; the thinking on which these choices have been based is often ignored. However, strategic planning is a complex process; the beginning of the process is important in order to understand the choices of leaders in organizations worldwide. Strategic thinking is – hierarchically – the first phase of the strategic planning process. Researchers have used different approaches in order to explain the structure and the scope of strategic thinking in modern business environment. Stacey (2007) refers to the strategic choice theory as a reflection of the strategic thinking in modern businesses. Strategic choice theory emphasizes on the role of individual in the development of key business plans (Stacey, 2007, p.46); in the context of this theory, business planning is depended on the cognitive abilities of the persons involved (usually the organizational leaders); the personal perceptions of the strategic planners are also expected to affect their strategic thinking involved in the development of various business plans. A similar approach is used by Michael Porter in regard to the evaluation of the role of strategic thinking; in accordance with M. Porter, the strategic thinking is not the result of a spontaneous reaction towards specific organizational needs; it is rather developed systematically during the strategic planning process (Porter, 1987, in Mintzberg, 2000, p.18); the view of Porter on strategic thinking is similar with that of Stacey (2007) at the point that the form of strategic thinking used in business planning is related to the personal perceptions of individuals; however, through the Porter’s view on strategic thinking the role of business environment – which can influence the business planning process – is highly emphasized; in the view of Stacey the role of business environment on the decisions of individuals in regard to the business planning is not made clear. An important characteristic of strategic thinking is highlighted in the study of Grant (2005, p.510); in the above study it is noted that strategic thinking is not static; it has a dynamic character, which means that it can be adapted to the conditions of the organizational environment in order to ensure the success of specific strategic plans. In this context, it is assumed that strategic thinking refers to the development of flexible strategic plans and to business plans that can be used only under certain internal and external organizational conditions. On the other hand, Wells (1998) notes that two different approaches could be used in order to explain the forms of strategic thinking in modern organizations; the holistic and the divided approach; the holistic approach is based on the belief that strategic thinking has the characteristics of an holistic thought; through this point of view, strategic planners need to be able to understand how the organizational activities are part of a major plan – emphasis is given on the way that these activities are integrated within such plan. This mode of strategic thinking would be valuable for modern organizations – where tasks may be divided (in order to be appropriately delegated to employees with different skills and expertise) but they are still parts of the organizational plan. The holistic thought of strategic thinking is most appropriate for modern organizations compared to the divided thought, which emphasize on each particular organizational activity as a separate segment of the business plan. In the context of the divided thought, the parts of each business plan are not integrated but need to be developed separately – targeting particular business goals. Organizational leaders that use the divided thought form of strategic thinking are not able to understand the needs of their organization as an integrated unit; their strategic plans can address particular business needs but they cannot support the business performance as an integrated unit. The holistic thought mode in strategic thinking is also promoted through the study of Daft et al. (2008); in the above study it is noted that strategic thinking is part of the strategic planning; moreover, it is made clear that strategic thinking can effectively support the strategic planning when it refers the needs of the organization as developed within a specific environment; in other words, Daft et al. (2008) supports the holistic approach when developing business plans but it is explained that business planners need to take into consideration not only the internal but also the external organizational environment – which can affect the form and the performance of organization as an integrated unit. Moreover, it is noted that all phases of business planning, i.e. from designing the business plan up to its implementation are included in the concept of strategic thinking as a key organizational activity (Daft et al., 2008, p.172). From another point of view, Rea et al. (1997) note that the effectiveness of strategic thinking as part of business planning could be explained mostly by referring to the effects of strategic thinking; the term ‘effects’ is related to the achievement of the organizational targets by using specific strategic thinking approaches; in this context, it is mentioned that a successful strategic thinking approach should be characterized by ‘a) the establishment of clear set of organizational priorities, b) the improvement of organizational performance, c) the resolution of critical business problems and so on’ (Rea et al., 1997, p.2); through the above approach, another criterion for the evaluation of strategic thinking is set: the effectiveness of strategic thinking in practices. In other words, the criteria used for the development of a specific strategic thinking approach are not of decisive importance when evaluating the success of a strategic thinking mode; rather the effectiveness of this mode in practice is what counts most. Moreover, Jain et al. (1997) make clear that actually, the role of strategic thinking in modern organizations has not been adequately appreciated; this assumption is based on the relevant view of Nadler (1994) who supported that even if significant amount of time is spent on understanding the strategic planning process, a key part of this process, the strategic thinking has not been adequately addressed – probably because it is considered of low importance for the success of strategic business plans (Jain et al., 1997, p.257). 3. Conclusion Strategic thinking is a key element of successful business planning; however, the methods adopted by strategic planners when developing various business plans can be differentiated; the conditions in the internal and the external organizational environment are also likely to be different – especially in market with different social and economic characteristics. For this reason, strategic thinking is likely to have different forms as part of business planning. In most studies developed on the specific field it has been proved that strategic thinking can perform differently across organizations in accordance with the willingness of business planners to use it when being engaged in business planning processes. On the other hand, it has been revealed that the content of strategic thinking can be expanded – including all phases of business planning. This finding is in opposition with the common perception that strategic thinking involves in the beginning of business planning. In fact, strategic thinking has a crucial role in the development of successful business plans; however, the performance of strategic thinking cannot be measured in advance or guaranteed since it is highly depended on the skills and the perceptions of individuals; even if it is also related to the organizational environment, the level of their interaction is limited at a point that organizational environment – internal and external – to have a secondary role in the development and the performance of strategic thinking as part of business planning. References Cowley, M., Domb, E. (1997) Beyond strategic vision: effective corporate action with Hoshin planning. Butterworth-Heinemann Daft, R., Marcic, D. (2008) Understanding Management. Cengage Learning Grant, R. (2005) Contemporary strategy analysis. Wiley-Blackwell Haines, S. (2005) Strategic thinking for leaders: the systems thinking approach. Systems Thinking Press Hobbs, I. 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