Planning & Strategic Management
In Today’s constantly changing and unstable business environment managers of
organisations must understand planning and strategic management and look forward to
anticipate change within their organisation to hold a competitive edge or even to survive.
“Planning is a process that involves defining the organisations goals, establishing an
overall strategy for achieving those goals and developing a comprehensive set of plans to
integrate and coordinate organisational work” (Robbins 2003 P200).
Planning is used throughout organisations for improving employee focus, reducing
wastage, preparing for and minimising the impact of change and setting standards used
Managers use different plans dependant on their breadth, timeframe, specificity and
frequency of use.
Strategic plans are those which look at the organisation as a whole then decide on the
organisations overall goals and the position and the position in the current and future
markets that organisation would like to achieve.
Operational plans are more specific than strategic plans they explain exactly how the
overall organisational goals are going to be achieved.
Long term plans are goals to be completed in a period of 3 or more years in contrast short
term plans are those to be completed immediately or in a period of less than 1 year.
Specific plans set out exact objectives to be achieved and process to achieve them unlike
Directional plans that are a flexible guideline of the direction or purpose aimed to be
achieved directional plans are very open to interpretation. Single use plans are those used only once for a set specific purpose where as standing
plans are used on a regular basis for providing support and guidance for ongoing
Although planning is imperative for organisations there are problems with planning in
today’s dynamic business environment.
Planning focuses organisations management on the issues and competition of the present
environment and not the future ones.
It is hard to develop plans for a dynamic unstable and constantly changing environment
because this defeats the very purpose of planning.
Planning makes employees and managers think about the present and or future success of
the business which may lead to overconfidence and in turn failure.
Creativity, intuition and visions and risk taking cannot be replaced by planning because
they are the key concepts of successful entrepreneurship.
Dynamic environments require flexible planning to be successful and adapt quickly to the
changes that occur unexpectedly and the changes that have been researched and predicted
in order for an organisation to survive.
An example of a company that uses planning successfully in a dynamic market (property)
is McGrath Real Estate Sydney started by John McGrath 15 years ago.
McGrath specialises in Sydney’s prestige property market and has used excellent
planning and adaptation to the ever changing property market to turn a company with a single owner manager 15 years ago into one of the most respected and sought after
agencies in Sydney with a 2 billion dollar turn over last financial year by researching and
identifying consumer needs through planning.
Strategic Management differs from planning “Strategic management is a set of
managerial decisions and actions that determine the long run performance of an
organisation it entails all of the basic management functions” (Robbins 2003 P222).
Strategic management uses an 8 step process that includes planning , implementing and
the evaluation process.
Managers of Organisations use strategic management to observe and analysis there
organisation then impleme