Why is strategic planning important?

Strategic Planning

Strategic planning is a broad activity organized by typically higher management. It takes the organizations purpose (mission & vision) setting a focus on outlining priorities, structure, resources, operations in hopes that the outline can be instituted and delivered for maximum profitability and efficiency for the organization. Strategic planning has been recognized as a fundamental activities of an organization (Segars) Meeting and exceeding management and shareholder interest. It is important to make improvements and validate modifications to please shareholders as they have a strong interest in the organizations stability and sustainability.  

Components- Importance

Strategic planning starts from the head of the organization, it is devised from shareholders and upper management based off the direction the company plans to carry its goals and operations. In turn is trickled down to lower management and employees to carry out. This is done through extensive analysis of operational, financial and rivalry data. Building strong and efficient resources and capabilities including production, supply and delivery. Each level of the business is incorporated and responsible for fulfillment in order to be successful. 

Assessing an organizations stand in the industry, market and competitions is the baseline for analysis. Identifying strengths, weaknesses, opportunities and threats (SWOT) are critical in strategic planning. Knowing this information helps look internal and assess the company operational flow and how to do so with the current financial, technological and workforce. Each category is critical to executing the strategic plan. Though there has been some controversy if strategic planning (SP) and organizational performance (OP) are linked. It is evident that they are closely related and effect each other to some degree (Ali)

Single Business vs Multi Business SP

Strategic planning for a single business is slightly different than multi-business due to the suppliers, resources and regulations. Multi businesses have greater coverage and require a streamlined strategic plan. Meaning that the foundation or purpose is the same, yet needs to be modified according to operation of each business. This could be greater resources and capabilities that need to still create the same expected performance as they are tied to the sister or parent organization. If multi business sectors or industries vary, then the SP has to be tailored to the industry, however the same plan or model should be followed. 

Summary

SP is critical for an organization to operate and evaluate the action plan, once established the organization can assign the proper management to institute and deliver the end results. Planning is ever changing and can always be improved especially with the changes in technology. No need to go back to the drawing board or reinvent the wheel, but rather to take what can work better considering the changes and add or subtract to create value, better work flow and of course end result- efficiency.

Laurie

Ali, A. A. (2018). Strategic planning–organizational performance relationship: Perspectives of previous studies and literature review. International Journal of Healthcare Management, 11(1), 8–24. 

Albert H. Segars, & Varun Grover. (1999). Profiles of Strategic Information Systems Planning. Information Systems Research, 10(3), 199. 

Thompson, A. Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases.