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Strategy-Is a predetermined course of action, taken, with the desire to reach set targets.
Thompson et al (2005) opine that strategy defines how the organization will do what it is in
business to do, how it will compete successfully, and how it will attract and satisfy its
customers in order to achieve its set goals.
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(1965:31), further explains that strategic planning involves the alignment of the opportunities
in the organisations external environment and use of the organizations strengths to capitalize
on the environment, according to the organizations capabilities.
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STEP 2: FORMULATION OF GOALS & OBJECTIVES:
The nuts and bolts of the strategic planning process are expressed in measurable goals.
Management decides on the targets they want the organization to achieve and these should
be specific, realistic and concrete, expressed in terms of quantities and timelines. This is
important in that it allows management to evaluate progress and pace of developments.
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strategies have been at helping the organization reach its goals and if there are any
necessary adjustments to be made. If the results are not satisfactory or not in line with the
expectations, adjustments will be made so as to align the activities with the goals, vision and
mission of the organisation.
GOAL SETTING:
Goals are desired outcomes or targets and these drive organizations. Koontz & ODonnell
(1972:77) opine that the whole process of strategic planning is meant to come up with a set of
goals that are deemed desirable by the owners and the management of an organization.
When management undertake strategic planning, they take into consideration a lot a variables
from within the organisation and also from without, and finally come up with decisions that
affect the functioning of the organisation. By devising a vision and a mission statement for the
organisation, a clear direction as to what the organisation sets out to achieve can be seen.
From the Vision and Mission, specific goals and realistic targets can be derived. The goals will
then serve as the driving force, as they would in turn dictate how the management and
employees would work, if the vision and mission are to become a reality.
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FACILITATES MANAGEMENT BY OBJECTIVES:
Management by objectives refers to the use of mutually agreed goals and objectives as a
basis of evaluating employee performance (Romani: 1997; Schrader & Seward; 1989). As
strategic planning helps in the determination of objectives, it highlights the purposes for which
various activities are to be undertaken and helps in focusing the attention of employees on the
objectives and broad goals of the organisation. Since the major focus is on goal and objective
achievement, employees are evaluated on how well they accomplish these specific goals that
have been agreed upon. For the manager, this has the advantage of making sure that
everyone works and puts the maximum possible effort towards achieving the set goals rather
than on other activities that do not contribute to the success of the organization.
RESOURCE ALLOCATION:
When clear and concise plans are laid down, the management will be able to know what
resources and how much resources are needed to carry out certain tasks in the organization.
Resources are paramount in the achievement of organizational goals and objectives. Without
the right and adequate resources, organizational projects and programmes will suffer and not
yield the required and expected results. When strategic planning as been done, tasks and
activities can be graded according to their needs and importance and as such resources will
be allocated to the various activities accordingly (Russel & Taylor, 1995:88). This has the
advantage of making sure that no activity is starved of the necessary equipment, resources
and personnel and therefore optimum resource utilization will be achieved.
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of its strategy and thus should be given due consideration. By undertaking the environmental
scanning stage of the strategic planning process, managers become aware of and establish
to what extent and how the general environment has an impact on the activities of the
organisation (Robbins & Coulter, 2012:112). External factors like legislation, competition,
economic policies, politics, social behaviour, technological changes and the likes all affect the
business, whether directly or indirectly, and managers should be aware of their impact on the
business. Moreover, managers must be aware of internal factors like staff, skills, finance
systems, ethics, organisational culture and products, to cite a few. These also affect the
organisation and managers should be well aware of the impact they have on the daily
activities of the business. Strategic planning brings these to the forefront and when SWOT
analysis has been carried out, managers will have a clear idea of how to deal with them
before they can adversely impact the organisation.
BUDGETING:
A budget is a numerical plan for allocating resources to specific activities (Russell & Taylor;
1995:322), thus budgeting is planning for resource allocation. Budgeting is one of the most
critical elements in the day to day running of an organization as it has a direct bearing on the
results of the organizations plans. It is imperative that the management gets the budgets right
as resource allocation stems out from the budget. When strategic planning has been carried
out effectively, managers will have correct and concise figures regarding to the funds and
resources that would be needed to carry out the organisations strategic plan. If they get it
wrong in the budgeting phase, it is likely that the organisation will face challenges in pursuit of
their goals and objectives.
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HIRING AND STAFFING IS MADE EASY:
During the environmental scanning stage of the strategic planning process, an internal skills
audit is conducted. This is where the management look at all its human resources (personnel)
and try to match each employees skills against the work and duties that arise as a result of
the new strategies that will have to be adopted by organisation, so as to determine the right
job/work and duties of each and every employee. For strategies to be effective, management
will have to match each employee to their right duties according to their expertise and
experience. Sometimes, it becomes necessary for other employees to be retrenched if they
are deemed surplus to requirements or if they do not meet certain required standards and at
times it would also be necessary to hire new employees who possess certain skills that would
be required in order to achieve the set targets, objectives and goals.
REDUCTION OF UNCERTAINTY
The future is always full of uncertainties. A business organisation has to function in these
uncertainties. It can operate successfully if it is able to predict the uncertainties. Some of the
uncertainties can be predicted by undertaking systematic forecasting. Thus, strategic planning
helps managers in foreseeing uncertainties which may be caused by changes in the business
environment, be it changes in technology, fashion and taste of people, government rules and
regulations, legislature, economic changes etc.
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and competitors. This creates a forward-looking attitude among the managers and spurs and
propels the organisation forward towards goal achievement.
UNCERTAINTY:
Political and economic uncertainty is the norm and order of the day. One day, the political and
economic climates are favorable, and on the other, things change. These changes in the
landscape happen on a daily basis and it is difficult to keep pace with these, such that
management plans can be adversely affected by these rapid changes, and as such the
organization may fail to attain it goals and objectives.
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FORMAL PLANS CANT REPLACE INTUITION AND CREATIVITY:
Another fallacy of strategic planning is the assumption that structural systems and a rational
sequence, (from analysis through to administrative procedure to eventual implementation),
are superior to human judgment, intuition and creativity. In practice, however, formalized
procedures almost never forecast discontinuities or create novel strategies (Mintzberg;
1994:109). Rather, they incline planners to concentrate on means rather than ends, on how to
do things rather than on why to do things and on better ways of pursuing current objectives
rather than reconsidering which objectives should be pursued
CONCLUSION
Planning is important, in that it sets out a road map for an organization and gives it focus and
goals to target. It is important that an organisation has a purpose for existence; otherwise, all
activities will be meaningless. Also, strategic planning gives the modern day manager the
tools for control and for leading his subordinates. By setting out goals and objectives, all
within the organisation have targets and that is to attain the set goals, thus managers will
have a basis for control and assessment of the effectiveness of their employees and methods.
Moreover,strategic planning provides a base from which progress can be measured and
establish a mechanism for informed change when needed. Finally, as the old saying goes,
failing to plan is planning to fail, if managers fail to plan, it would be difficult to tackle and take
on the everyday challenges in the business world, since they would not be anticipated, but if
strategic planning has been done, and diligently so, the manager can easily anticipate these
challenges and thereby have counter measures for such problems as he faces them on a day
to day basis. On the other hand, strategic planning has its weaknesses, in that, since the
world is dynamic, it is difficult to plan for and predict the future. Although strategic planning is
not without criticism, the positives that can be realized by undertaking strategic planning far
outweigh its negatives and not having a plan of action at all.
It is the writers feeling that, despite the dynamics of the business environment, managers
should plan for the future and in the process leaving enough room and allowance to
maneuver in relation to those changes. Plans therefore should not be rigid, but rather they
should be fluid, so as to accommodate the unforeseeables as business continues.
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REFERENCES:
Goldstein, L., & Pfieffer, J. W. (1993). Applied Strategic Planning. New York: McGraw-Hill
Mintzberg, H. (1994). The fall and rise of strategic planning. Harvard business review. Vol.
72, Issue No. 1, 107-114.
Nolan, T. M., Goodstein, L. D., & Pfeiffer, J. W. (1993). Plan or die: 10 keys to
organizational success. San Diego: Pfeiffer & Co.
Olsen, J.B., & Eadie, D.C. (1982). The Game Plan: Governance with Foresight.
Washington: Council of State Planning Agencies on the urban environment.
Robbins, S. P. & Coulter, M. (2012).Management, 11th Ed., New Jersey: Prentice Hall
Romani, P. N. (1997) MBO by Any Other Name is Still MBO, in Supervision, December
1997, Vol 58. pp. 68;
Russell, R. S. & Taylor III, B. W. (1995) Production and Operations Management. Upper
Saddle River, New Jersey: Prentice Hall
Thompson Jr., A. A., Strickland III, A. J., & Gamble, J. E. (2005).Crafting and Executing
Strategy, 14th Ed. New York: McGraw-Hill Irwin
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