STRATEGIC PLANNING Essay
STRATEGIC PLANNING is a set of actions and decisions taken by management, which lead to the development of specific strategies designed to help the organization to achieve its goals. According to Lorange Peter, strategic planning process can be understood as a tool to assist in making management decisions, which aim is to provide the innovations and changes in the organization to a sufficient degree. (Lorange 2010)
The purpose of strategic planning is to identify the most promising areas of the organization, ensuring its growth and prosperity. It must be based on the analysis of prospects for development of the organization, under certain assumptions about changes in the environment in which it operates. Based on this analysis of development of organizations are formed separate areas of production and economic activity and selected strategies for achieving goals. If long-term and annual plans of the organization involves planning of the selected areas of the organization, in strategic planning are determined the new areas of development. Strategic planning is aimed at adapting the organization to constantly changing environmental conditions and to the benefits of new opportunities. (Lorange 2010)
However, there are many situations and examples when companies do not use strategic planning in their activities. There are several reasons hy some firms do no strategic planning:
1. Strategic planning does not give a detailed description of the picture of the future, and gives only a description of the state to which the firm must strive in the future, what position can and should borrow in the market and in business.
2. Strategic planning has no clear algorithm for drawing up and implementing the plan. His narrative theory reduces to a certain philosophy or ideology of doing business.
3. The strategic planning process for its implementation requires significant resources and time compared to traditional planning. This is due to more stringent requirements for
strategic Plan: it must be flexible to take into account any changes both within the organization and in the external environment, etc.
4. The negative consequences of errors of strategic planning, as a rule, are much worse than in a traditional perspective, for example when decisions are made about investments, opportunities of doing business abroad, etc.
5. Some companies are working in a seasonal business, or in rapidly changing markets, where Long Term and Strategic Planning is practically impossible .
6. The strategic plan should be supported by extensive research and evidence, and not many companies actually do it. But to compete effectively in today’s business world, a firm must continually collect and analyze vast amounts of information about the industry, market, competition and other factors.
7. Strategic planning is a serious and complex work, which requires high competent specialists. But it is not always possible to find qualified managers, as most companies hire only the operating managers, who supervise and plan current activities, and senior management also does not always have the right skills in strategic planning.
