This planning is similar to a SWOT analysis which identifies the new opportunities and threats to existing business as well. The main task in setting the corporate objectives is to decide the extent of growth the firm wants to achieve. Before publishing your Articles on this site, please read the following pages: 1. Open systems approach makes it necessary on the part of the managers that they take into account the environmental variable such as, technological, social, cultural, legal, political, and economic. The mission statement would focus on results and outcomes, while the role statement gets more into the “how’s”. Planning process involves analysis of business function such as finance, marketing, a… c. Opportunities – New products and services that can be retailed in their cafes, such as – Fair Trade products. The strategic plan gives you a place to record your mission, vision, and values, as well as your … It purports to shape or reshape the company’s businesses and products so that they yield target profits and growth. To attain superior profitability, the firm seeks to develop a competitive advantage over its rivals. While going through the strategic planning process managers should also take into account both time and cost factors. Strategic planning is the method by which a community continuously creates arti-factual systems to serve extraordinary purpose. The planning stifles employee initiative and forces managers into rigid or straitjacket mode of executing their work. It involves looking into the future, anticipating possible events, scenarios or changes, and analysing what will happen to the company as a result of those things happening, and, planning to minimise any damage, and maximise opportunities. These changes in the “rules of the game” forced managers’ develop a systematic approach to analyzing the environment, assessing their organization’s strengths and weaknesses, and identifying opportunities where the organization could have a competitive advantage. Planning plays a important role in everyday life. Strategic planning is the process of determining a company’s long-term goals and then identifying the best approach for achieving those goals. In such plans there is a connection with the projections of the diagnostic part in shaping the future of the company. The STP method is simple, but accurately describes, at least in a general way, what strategic planning involves? The first basic limitation of strategic planning is the lack of accurate information and facts relating to future. Definition of Strategic Planning 3. Strategic Planning is a logical effort, that envisions the desired future, by producing various alternative actions and decisions, to formulate an effective strategy, that brings success to the organisation. Data is gathered from a variety of sources, such as interviews with key executives, review of publicly available... Activities. Many times, managers may not be aware about the various conditions within which they have to formulate their planning activities. Strategic planning helps in knowing what we are and where we want to go so that environmental threats and opportunities can be exploited, given the strengths and weaknesses of the organisation. To understand the functions of management, you must first examine what management is about. They are developed at corporate level, for each SBU, and also at the level of businesses or departments. Planning is the most basic of all managerial functions – Planning precedes all executory functions like organizing, directing, staffing, and controlling. It coordinates organisations internal environment with the external environment, financial resources with non- financial resources and short-term plans with long- term plans. Scenario planning is a fancy term for a very logical and sensible process — the “what if” process. If this is not the situation, he must modify his course of action which may include modification in both long- term and short-term plans. Such problems are more common in bureaucratic organisations where rules and procedures are the matters of prime concerns. While the objectives clarify where the firm wants to go, the strategy provides the design to getting there. Meaning of Strategic Planning 2. Strategic planning involves looking at the organisation as a complete entity and is concerned with its long term development. In terms of organizations and strategic planning, an environmental scan involves considering the factors that will influence the direction and goals of an organization. The first internal inflexibility is in the form of human psychology in that most of the people have regard for the present rather than for future. From deci… Further, they must also take into account the internal interaction pattern that is, how their planning process is affecting others and is affected by others. Process 7. It also takes into account how you’ll measure those goals, and the major projects you’ll take on to meet them. This approach is a compromise between the bottom-up and top-down methods, corporate executives and lower-level managers develop strategy in consultation with each other, making a link between wider corporate objectives and the managers’ detailed knowledge of specific situations. The reasons why people fall in strategic planning emphasise the practical difficulties encountered in planning. The mission is shaped by the capabilities and vision of the corporation’s leaders. Strategic planning is a continuous and systematic process where people make decisions about intended future outcomes, how outcomes are to be accomplished, and how success is measured and evaluated. Learning Objectives . A new, innovative product or service. Defining target values for those parameters, iv. Pervasive Process: This is the process of assessing the company’s capabilities and resources, strengths and weaknesses, core competencies and competitive advantages. Importance of Planning Function of Management. Over the years, we’ve helped hundreds of clients beat the odds in the strategy planning and execution game. We can never be sure that we have covered off all risks — we can only identify, and plan for risks we can foresee. The strategic plan gives you a place to record your mission, vision, and values, as well as your long-term goals and the action plans you’ll use to reach them. Time: The hidden dimension in strategic planning, https://ceopedia.org/index.php?title=Strategic_planning_functions&oldid=58672. Organisational policies and procedures, and long-term capital investment. Quality Function Deployment? Strategic planning process . The process of environmental analysis includes collection of relevant information from the environment, interpreting its impact on the future organizational working, and determining what opportunities and threats-positive and negative aspects are offered by the environment. This problem is further, increased by lack of formulating accurate premises. Arthur A. Thompson and A. J. Strickland have described four basic approaches to formal strategic planning: Initiatives in formulating strategy are taken by the various units or divisions of an organization and then passed upward for aggregation at the corporate level. Basically, a firm gathers all relevant information relating to the environment and analyzes them in detail. A good planning process involves integration of long-term and short-term plans. Many types of internal inflexibilities, may be results of planning itself. (iv) Selecting main and alternative strategies to achieve the goals. A goals grid is a relatively simple technique to help us think more clearly about organizational and company goals, particularly when we are doing strategic planning. If these projections are optimistic, in business practice they are referred to as a strategy or development plans. They are directed to long term goal setting and decision making. a. The ability to understand and implement policies, procedures, and processes that relate to the HR strategic plan. Strategic planning is systematic, formally documented process for deciding what are the handfuls of key decisions that an organisation, viewed as a corporate whole must get right in order to thrive over the next few years. A norm of the Successful business organizations is to be constantly engaged in this core business process and identify activities that would yield better result from the planning process. It starts by asking oneself simple questions like- What are we doing? One of the functions of strategic planning is to inspire people in the organization to work towards the creation of a new state of affairs. Strengths – Wal-Mart is a powerful retail brand. It gives a sense of direction to the entire team of the organization : It is very significant for the … What is strategic planning? Objective of the planning process is to serve as a roadmap that provides direction and aids in aligning resources to the business activities, Planning involves sequence of steps that are based on the current and future state of the organization. It involves responsibility to achieve the objectives and to fulfill specific organizational purposes through economical and effective planning and regulation. Planning and Course Correction – Strategic management is all about planning for the business. It is not sufficient to say that managers must take actions to make strategic planning effective, but they must be clear as to what actions can be taken in this direction. c. Opportunities – Product development offers Nike many opportunities. It covers long-range company aims, more specific department goals, and even individual assignments. It is corporate strategy that ensures the fit between the firm and its environment. Planning concerns future activity and its quality will be determined by the quality of forecast of future events. Plan therefore relates to these processes and components, in which manager can make a choice - take a decision. Objectives may be defined as “those ends which the organization seeks to achieve by its existence and operations”. Plans are not just desires, they are desires supplemented by the means to achieve them. 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