Introduction:-
Strategic planning is to find out the exact present position of the business and to identify our activities with new business venture, market or technologies, etc.
It may starts with following questions-
1. Which of our present business should be dropped, reduced or modified?
2. What steps should immediately be taken to meet completion?
3. Wherefrom we can get required sources?
4. What are the areas needed more attention?
5. What should be pushed and how?
The attempt made to get the satisfactory answer of above questions is strategic planning.
Definition:-“It is the continuous process of making present entrepreneurial decision systematically with greatest knowledge of futurity , organizing different efforts needed to carry out these decision systematically and measuring the result of these decision against the expectation through organized systematic feedback.”
Remember; strategic planning is not a box of tricks. It is not forecasting, it is not an attempt to eliminate the risk, but it stands to deal with present situation raised in business environment. It has no importance to scientific techniques or methods. It is the application of thoughts, analysis, judgments, and imaginations.
So strategic planning starts with two questions
1. What we have to do now to get the objectives of tomorrow?
2. What new things we have to do and when?
Steps of strategic planning:-
Following steps may be considered when we do strategic planning.
1.) Select the goal: -
It governs and has a control over all the business activities of an organization. And it allows the resources in the best interest of the organization. These goals may be growth rate goal or development of new product or services. During the selection of these goals management must consider all the external and internal factors, basic mission of the organization and value of its manager hold. The value held by a manager affect the goals what they select.
For instance, if a manager influenced by aesthetic value, they may provide better quality and well designed product to the society even at lower rate. If they are influenced by the economic growth value, they may try to maximize their profit at the cost of quality and design.
2.) Analyze the environment:-
Before selecting the final goal, management analyzes all the factors of external and internal environment which may affect the goal because success of a business operation totally depends upon the environment where the business is to be operated or functioned.
Here we also do SWOT analysis.
For instance, it would be a foolish idea of a manager to have a rapid expansion goal during the period of depression or to launch a new product without demand.
3.) Establish measurable goal:-
After analyzing the environment, management establish a measurable goal in respect of previous selected goal so that it could be achieved and take necessary action to fulfill that goal. Otherwise people will be in doubt as how to proceed. For instance, if the goal of GM is to achieve 15% increase in sale during the next three years then the SM will naturally distribute it to different sales executives to meet the goal. If goals are specific they motivate people to do better than general goal.
4.) Subunit develops their own plan and compares it with strategic plan :–
Under the existing environment and available resources, subunit develops their own plan and compares it with strategic plan. If there is a wide gap between them, then they move it to middle level management and top level management for further approval which brings new changes in strategic plan.
5.) Implement the strategic plan-
After finalizing the strategic plan, the broad goal is translated into day to day operation in the organization. All concerned authorities make their appropriate plans, programs, and budgets for their respective subunits.
6.) Evaluation of strategy by Executive management.
If the implemented strategy fails to meet the goal, a thorough re- examination must be required. Some reasons which create hurdles in the progress of strategic planning are, incompetence of team, poor development, lack of control, etc.
How to make strategic planning effective?
To make strategic planning effective, plan should be simple, balanced, and flexible and based on clearly defined objectives. And it should be provided for a proper analysis and clarification. Apart from that we also consider following activities-
a) Avoid serial planning.
b) Don’t wait to start the second phase of planning until the first phase is fulfilled.
c) Try to have parallel planning with a lot of cross checking.
d) Watch that all the plans move forward at the same time.
According to Koontz and O Do-Nill , timing of the plans in all the functional areas must be given a proper attention, coordination among all the functional areas like production, marketing, personnel, finance, abandon monopoly practices, avoid planning gap, constraints on accurate planning must be given a serious attention, flexibility for quick adaptation to environment, securing the cooperation of government , monitoring authority and trade union should also be considered .
Conclusion
Strategic planning is the continuous process of making present entrepreneurial decision systematically with greatest knowledge of futurity , organizing different efforts needed to carry out these decision systematically and measuring the result of these decision against the expectation through organized systematic feedback.”
Remember; strategic planning is not a box of tricks. It is not forecasting, it is not an attempt to eliminate the risk, but it stands to deal with present situation raised in business environment. It has no importance to scientific techniques or methods. It is the application of thoughts, analysis, judgments, and imaginations.
Strategic planning is carrying out following six steps. Select the goal, Analyze the environment, Establish measurable goal, Subunit develop own plan and compare it with strategic plan, Implement the strategic plan, Evaluation of strategy by Executive management
How to make strategic planning effective?
To make strategic planning effective, plan should be simple, balanced, and flexible and based on clearly defined objectives. And it should be provided for a proper analysis and clarification. Apart from that we also consider following activities-
a) Avoid serial planning.
b) Don’t wait to start the second phase of planning until the first phase is fulfilled.
c) Try to have parallel planning with a lot of cross checking.
d) Watch that all the plans move forward at the same time.
e) Establish well coordination among the plans.
By Sanjay Kumar Kashyap