Aims, Concepts, and Role of Strategic Planning - Coursework Example

Strategic Management Table of Contents Introduction 3 Aims, Concepts and Role of Strategic Planning 3 Debates Surrounding the Contemporary Strategic Issues 4 Various Perspectives of Social Science disciplines informing Strategic Management 7 Analysis of Mintzberg’s School of Strategy and Whittington’s Classification of Strategic perspectives 8 Conclusion 10 Reference 12 Bibliography 15 Introduction Strategic planning determines where an organisation would be heading in the next few years and how it would get there. It may be an organisation wide or may be concentrating on a few major functions like a specific division or department (McNamara, “What is Strategic Planning?”). It is followed widely in organisations. A strategic plan is “visionary, conceptual and directional in contrast to an operational plan which is likely to be shorter term, tactical, focused, implementable and measurable” (Plan Ware, “What is a Strategic Plan?”). Strategic planning is an academic pursuit in itself and the only payoff of the system lies in its application (Goodstein, et al., “Implementation”). However, there is a debate regarding its effectiveness in organisations under the present turbulent environment. This project makes a critical evaluation regarding this issue. Aims, Concepts and Role of Strategic Planning The aim of strategic planning is to develop a better roadmap for guiding the organisation. It must be noted that the planning process does not succeed unless the roadmap actually guides the organisational decision making (Goodstien, et. al., “Implementation”). It reflects the ideas, feelings, wants and thoughts of the developer which is aligned with the organisation’s mission, purpose and regulations. Developing the plan requires extensive discussion, probing and examining the views of leaders responsible for preparing the plan. Development of the plan is not as complicated as implementation of the plan. Implementation requires pulling the plan apart and diffusing it with the entire organisation (SLA, “Foreword”). Most importantly the concept of strategic planning requires each one to ensure that the organisation’s goals are met. It requires participation of the entire organisation in order to be successful (Foundation for Community Association Research, “Strategic Planning Definition and Philosophy”). The process of strategic planning begins by identifying what the organisation is all about and assessing its present position. The next step involves identifying where wants to be in future is and who would be the stakeholders in achieving the mission. The next step involves articulation of the goals. Finally, planners have to address the means by which those goals can be achieved (Schilder, “Components of a Strategic Planning Process”). Debates Surrounding the Contemporary Strategic Issues Strategic planning evolved during the 1960s and was widely accepted by most corporate leaders. It was considered as the best way for devising and implementing strategies to enhance the competitiveness of every business unit. Strategic planning along with strategic control constitutes strategic management. It is considered to be of central importance to the process of strategic management (Grunig & Kuhn, “Introduction”). According to the scientist Frederick Taylor, strategic planning involved the separation of thinking from executing and thus developing a function by the strategic planners. It was expected that the planning systems would produce a systematic and step by step instructions which would be followed by managers and that there would be no chances of things going wrong. But in practice this was not the case. Strategic planning has fallen from the pedestal where it belonged. People have confused the concept of strategic planning with strategic thinking. In fact strategic planning has spoilt strategic thinking and has caused managers to get confused between real vision and manipulated numbers (Mintzberg, “The fall and rise strategic planning”). Strategic planning faces potential problems in the process of implementation. The most common is the resistance from the board of the organisations. There can also be resistance from the donors to the major changes. It is difficult to make appointments with the donors and it even requires extensive elaboration regarding the requirement of the changes and how they would be incorporated. Strategic planning faces resistance from the staff during its implementation. Generally strategic planning implementation leads top conflicts in the firm. In case of existence of beneficiaries to the changes, resistance might come from the beneficiaries as well as he change might affect them negatively. Very often strategic planning makes certain staff redundant as it leads to the reorientation of job activities. This might not be willingly accepted by all the staff and they would resist the change (Shapiro, “Potential Problems”). Researchers have put forward reasons why strategic planning fails in organisations. The question is to find why a system which was implemented with the view to bring about positive changes eventually fails to produce the desired results. Scholars have commented that “it seems the system compensates to restore the situation which existed before the effort” (Adams & Spencer, p.8). It is often noted that an organisational leader articulates a vision and tries to involve and enrol employees enthusiastically, but ends up getting frustrated by the results which show no alteration. The reason is explained as follows. The often repeated statement “do as you are told” stifles creativity and initiative. The person cannot use his conscious in the right way and is not able to respond to situations. This is the reason why employees cannot adjust to changes quickly and this leads to the fall in results. The employee is not allowed to think creatively and is more dependent on what is said to be done. This accounts for the failure of the system (Adams & Spencer, “Short-term thinking reinforces the status quo”). However, there are instances where strategic planning has proved be extremely effective in organisations. Research was conducted which concluded that formal planning was valuable and essential for firms. The results of the research were particularly favourable in case of the manufacturing firms. Nine studies out of the 28 studies conducted proved that formal planning was directly related to better performance. None of them were found to be producing detrimental performance (Armstrong, “Selection of the evidence”). Extensive research is being conducted on the manufacturing firms and various other types of organisations to identify any relation that is existent between their planning process and organisational performance. For some scholars strategic planning is considered to be inevitable for prosperity of any organisation. The success and growth of the company eBay was possible because of the proper implementation of a strategic plan. The CEO of the company, Meg Whitman has commented that ‘focus’ was the only factor that was responsible for the company’s success (Wheeler Performance Group, “V-O-E®: A Roadmap to Growth and Prosperity”). The three factors which are considered essential for the development and maintenance of focus for the attainment of success are visioning or strategic planning, organisation and execution. This has been represented in the figure below. Figure 1: V-O-E® Success Approach (Source: Wheeler Performance Group, “V-O-E®: A Roadmap to Growth and Prosperity”) It must be noted that strategic planning finds special importance in the non profit organisations. This fact has been approved by all non profit leaders. It is accepted on the ground that it assures that the organisation remains responsive and relevant to the requirements of the community and contributes towards the organisation growth and stability (Site-resources World Bank, “Importance of Planning”). Various Perspectives of Social Science disciplines informing Strategic Management Research on international strategic management applies tests, extends and builds theories that are either derived from or has a direct impact on the disciplines of strategic management. Empirical studies are either qualitative or quantitative in nature, but they investigate such data that extends to research methods that are derived from research on strategic management and other disciplines of social science. These empirical studies offer analytical methods and methodological advances that are generalised in the large area of strategic management. Primary investigation both qualitative and quantitative provides case based data or methods which provides insight into the study of strategic management (Strategic Management Society, “Vision Statement for the Global Strategy Journal”). Analysis of Mintzberg’s School of Strategy and Whittington’s Classification of Strategic perspectives The design school says that the strategy is thought by somebody as being a concept and then the planning school formalises it after examining the concept. The positioning school is responsible for analysing the results and then converting it into the document called ‘Strategy’. The three processes form subset of Whittington’s classical approach (Sekhar, p.210). As explained in the project, strategic planning fails because the executors of the plan lose their ability to react to particular situations. They are externally monitored and directed as to how they would have to execute the plan. This is where the planning school among the Mintzberg’s Ten Schools of Thought about Strategy Formation fails. Under this school of thought, a series of steps are formulated which needs to be followed rigorously beginning from analysing the situation till the execution of the strategy. Clear instructions are provided and resources are allocated. This could give rise to the system becoming static. Under the system it also becomes difficult to predict whereas predictability bears the most importance in the process of strategic planning (Open Tuition, “Mintzberg’s ten Schools of Thought about Strategy Formation”). The Mintzberg and Whittington’s have proposed different schools of thought elaborating on the fragmentation of the field of strategic management. There has been over accentuation in the base disciplines which has created theoretical frameworks that has very little to do with the practical problems prevailing in strategic management (Elfring & Volberda, “Rethinking Strategy”). Scholars have argues on the fact that a strategy constitutes of complex links which are to be executed in practice. It is not just an academic science or a body of integrated theories. There should be a proper balance between building of the theory and executive praxis. There has over emphasis on the development of the theory which has splintered the field into various academic specialities. Whittington’s classical approach is one of the oldest approaches towards strategy. The perspective relies heavily on rational decision making and structured planning techniques (Egan, “The Strategy Question: what is it, and does it matter?”). Various schools of thought have evolved under strategic management. Andrews and Ansoff (1965) were among the pioneers to create a separate profile for the field of strategic management. However they are not considered to be the founders of the same. The recent schools of thought are found to be inconsistent with the planning and design school of thought as created by Andrews and Ansoff. Whittington’s strategy differs along two dimensions, namely, outcome of the strategy and the development of the process (Elfring & Volberda, “Classifying Schools of Thought”). Both the design and the planning school had evolved in the 1960s and thus share certain common features. The most common difference between them and the other design schools is that they required having an imaginative step. However, the planning school meant to make the business operate like machines. Thus the system was devoid any creativity (Nick Pelling, “The Planning School”). A question arises as to whether the past and future of any business is so free of uncertainties that there are no causes of worries. There is an intellectual emptiness prevailing in the schools of thoughts that makes it inapplicable in organisations in today’s context (Nick Pelling, “The Planning School”). Researchers tried to evaluate the progress of the schools of strategic management, from 1965 onwards. Their main suggestion was changing the concepts of strengths and weaknesses to the comprehensive concepts of organisational capability. The original concept of strategy formulation centralised in the hand of the CEO was replaced by bi-centralisation (Bresser, p.42). The advocates of strategic management have tried to deal with the strategy formation not only to maintain its vitality but also for imparting real energy to strategic processes (Gilligan & Wilson, p.46). Conclusion While doing the project it was found that strategic planning had evolved as a widely accepted concept in the mid 1960s, but the concept has gradually faded in popularity in organisations today. It is time that the concept requires self examination and adapts and adjusts itself to the present scenario (Rumelt, Schendel & Teece, “History of Strategic Management”). It was also found that strategic planning requires extensive discussions, analysis and foresights. Having the power to foresee the future happens to the key to its success. However the system has failed in quite a number of organisations. The primary reason being the top management not being able to take responsibility of the planning process and delegating responsibilities to other planners. Moreover the process is considered to be over formalised and lacks the possibility of innovation (Courtney, p.96). The planning process also happens to be short term oriented and does not take into account possibilities of changes in future. Strategic planning should be future oriented. It should involve “decision making decisions that are fundamental and directional in nature and have long term implications for the organisation” (Rogers, Finlay & Galloway, “What is Strategic Planning?”). The fact that everyone is to follow each step as prescribed by the planner rules out evolution of creativity and innovation. In this context the Mintzberg’s and Whittington’s Strategic perspectives have been analysed. It was found that the perspectives were too theoretical and has little place to succeed in their practical applications. 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