TheRole of Strategic Planning in the Contemporary Organizations
TheRole of Strategic Planning in the Contemporary Organizations
Strategicplanning is among the most critical functions for organizationsoperating in the contemporary environment. This is because thecontemporary economic and business environments is characterized bystiff competition and rapid technological changes that requireorganizations to have long-term strategies that will help theorganization withstand the emerging challenges (Pirtea, Nicolescu &Botoc, 2009). Strategic planning is defined as a process thatinvolves the determination of activities that the organizationintends to achieve in the long-term and making decisions on howorganizational resources will be allocated to accomplish thoseactivities (Bryson, 2004). In addition, strategic planning is oftenviewed as a significant tool for revitalizing and transformingorganizations, both the private and public ones. Strategic planninghas five major roles in the organizations, including the provision ofan overall direction, helping the organization set missions andattainable goals, enhancing the process of decision making, givingthe picture or the image of the firm as a whole, and facilitating theprocess of performance evaluation.
Strategicplanning and the overall organization’s direction
Theprocess of strategic planning involves the determination ofactivities that the organization expects to undertake for a givenperiod. It also lays down the procedures and proportions that shouldbe used in the allocation of resources to different organizationalunits for the purposes of achieving different strategic plans(Pirtea, Nicolescu & Botoc, 2009). This process gives theorganizational management an overall picture of the path that theorganization should follow for a given period. For example, strategicplanning provides specific direction to aspects of marketingstrategy, financial strategy, human resources strategy, andorganizational development strategy. The combination of thesestrategic functions results in an overall strategic plan that guidesthe organization for a pre-determined period.
Theentire process of strategic planning begins with the definition ofthe organization’s mission. The mission allows the management todistil and synthesize the overarching ideas, which in turn allows theemployees and the management to align their actions with practicalstrategies (Tatoglu, 2005). However, an effective strategic missionshould be broad enough to direct both the employees and themanagement, and narrow enough to ensure that employees and themanagement are able to focus their efforts. In addition, the processof strategic planning cannot be complete without the determination ofmeasurable goals. Measurable goals that are integrated into theorganization’s strategic plan allow employees and the management toevaluate pace ad progress development (Tatoglu, 2005). In essence,the integration of strategic mission and measurable goals in theorganization’s strategic plan provides the organization withconcrete objectives that should be accomplished within a given timeframe.
Strategicplanning and decision making
Theexistence of well-framed strategic planning in an organization makesthe process of decision making easier and objective. According toMasterson (2011) the day-to-day problem-solving and decision makingin the organization are directly related to short-term as well as thelong-term goals. This implies that the goals set and integrated intothe strategic plan guide the management in making short-term decisionthat are critical in facilitating the day-to-day operations andaddressing emerging challenges. All short-term decisions shoulddirect the management and employees towards the achievement of theoverall goals contained in the overall strategic plan. Although thefuture of the organization may not be perfectly predicted, thestrategic plan helps the management reduce the negative effect ofsurprising occurrences by facilitating the process of short-termdecision making.
Strategicplanning covers the entire organization
Strategicplanning over overarches all other department plans, which ensuresthat it covers the entire organization. This is because the strategicplan enables the management to spell out workforce plans, productionplans, and finance plans among other plans into a single strategicplan (Pirtea, Nicolescu & Botoc, 2009). Strategic plan derivesits importance from the scale and the time horizon. To this end, thestrategic plan is viewed as being corporate. This means that astrategic plan can only exist in a quasi-autonomous or autonomousorganization. Therefore, the strategic plan cannot exist in afragmented organization unless different fragments operate asautonomous subsidiaries. This ensures that all units or departmentsof a given organization are brought together and guided towards acommon goal. An effective strategic plan plays a significant role inbringing all partial plans together, which gives the organization thesynergy it needs to enhance its competitiveness in the market.
Strategicplanning is a critical function that modern organizations should notundermine. This is because strategic planning plays four major rolesthat enhance the competitiveness and the going concern of theorganization. Strategic plan gives all units of the organization acommon direction, which in turn increases the success of theorganization. In addition, the fact that the process of strategicplanning requires the determination of strategic mission andmeasurable goals implies that all units of the organization will beforced to pursue a common mission. Moreover, strategic planningincreases the speed with which the management can make short-termdecisions since they only need to refer to the strategic plan.Additionally, strategic plan pulls together all partial plansprepared to different units, thus ensuring that the strategy coversthe entire organization.
Bryson,M. (2004). Strategicplanning for public and non-profit organizations: A guide tostrengthening and sustaining organizational achievement.Hoboken, NJ: John Wiley & Sons.
Masterson,S. (2011). Whynon-profit strategic planning is important.Chicago, IL: Event Incorporation.
Pirtea,M., Nicolescu, C. & Botoc, C. (2009). The role of strategicplanning in modern organization. AnnalesUniversitatis Apulensis,11 (2), 953-957.
Tatoglu,E. (2005). Evidence on formal strategic planning and companyperformance. ManagementDecision,44 (1), 9-30.