The Environment In Which Planning Processes Take

? Place May Have An Important Effect On How The Process Is Conducted? Essay, Research Paper

The ubiquity of change ? social, economic, political, technological and attitudinal?and the accelerated pace by which it is occurring demand a serious and imaginative response on the part of business if they want to thrive over the next several years, let alone the next decade or 100 years.

Strategic planning is highly selective, sets priorities, and does not constitute a comprehensive review of the organization’s activities (Eadie, 1993; Shea, 1997). It does identify the strategic issues facing the organization. Strategic planning should be a constructive, consensus building activity that focuses on the health of the organization. If no strategic plan is adopted the disadvantages are:

? Loss of competitive edge.

? Crisis management – reactive rather than proactive.

? Diverse directions and redundancy.

? At the mercy of outside influences.

Strategic planning begins with the definition or analysis of mission, and cannot proceed until there is mission consensus among all planning participants. Mission analysis identifies the spectrum of customers the organization will serve, the broad categories of products and services it will produce, and the way it will measure success.

Once a customer base is defined, the next step in strategic planning is to develop a clear understanding of the characteristics of the groups or classes of customers in this customer base. Once this understanding is established, the organization can then define potential customer requirements extending over the planning horizon.

Leading organizations have found that it is wise to include customers in the planning process to increase the confidence level of the strategic plan. The best organizations have extended the strategic planning process to include all major supplier organizations as well. When suppliers and customers are included in the planning process, the concept of value-chain management becomes viable. The value-chain is a series of value-added activities and processes that begin within suppliers’ organizations and extends through to customers’ organizations.

An organization exists within, and must successfully operate within, an external environment over which it has little or no control. Strategic planning attempts to understand the current environment by collecting and analysing data; and then to describe a potential future environment by reasoning techniques, plotting trend lines, searching for potential paradigm shifts, and utilizing simulation techniques. Usually, the future environment is described as a series of potential scenarios that will be obtained if certain specified conditions occur.

Given a well-developed scenario, it is possible for strategic planners to develop a recommended organizational response for that scenario and thus, provide planning guidance that can be used to develop annual business plans. The annual business plans will then have the effect of moving the organization in the desired direction.

Given enough time and resources, the organization can develop multiple scenarios and planned response packages for each potential scenario. Then, as events unfold, the organization is prepared for the appropriate response based on the scenario that seems to be best describing reality.

It is important to realize that more than half the value of a strategic plan is in the preparation of it. The act of producing a strategic plan sensitises managers to look forward in their thinking so that they can be more proactive, rather than reactive, in their management practices. It trains their minds to look for clues, events, and trends in the environment that may affect or shape the way in which they manage the business. It prepares them to seize opportunities that may dramatically influence the way in which they can meet customer requirements. This is why it is important to perform strategic planning at several levels in the organization, and why it is critical that operating or line managers do their own planning rather than receiving from the directors.

There are many views in strategic management in this assignment, however I will concentrate on three:

1. Rational Planning

2. Institutional Theory

3. Chaos Theory

The Rationalist strategy has been heavily based upon military experience where it?s principles are:

1. Describe, understand and analyse the environment

2. Determine a course of action in the light of the above analysis

3. Carry out the decided course of action

In real