Formalized Strategic Planning in Organizations
Strategic planning is an organization’s process of understanding its strategy and making
decisions on where to allocate the companies resources in order to peruse the strategy. Using
strategic planning can help organizations with many things like improving organizational
performance, build teamwork, expertise and foresee future problems and opportunities. If strategic
planning were to be used successfully it could benefit public agencies, departments, and major
organizational divisions. The strategy is used to carry out the organization’s comprehensive goals.
Nature of Formalized Strategic Planning
The nature of strategic planning is to understand how a company will work over a period of
years in order to work from where it is to where it wants to be by deciding the companies’
institutional directions, intended results, how the results will be carried out to be accomplished and
how success can be measured and evaluated, having a strategic plan means the company will be
able to develop an understanding and explain the company to outsiders by defining the goals and
objectives carried out by the organization. The strategic plan will contain the company, what the
vision, mission, and objectives are, the strategies, and how the effectiveness of the company will
be assessed.
Arguments for having a strategic planning approach are that using a strategy can provide clarity
on what direction the company is heading because the primary purpose of having strategic
planning is so that the company can understand the purpose of the organization which is also the
companies mission statement, what the company wants to achieve, what the vision is and how the
organization plans on getting there. Using a strategic plan will allow an organization will create a
‘roadmap’ to success as it minimizes confusion because it is all written down to avoid any risks
because it will give clear deadlines and assignments so that employees know when to hand in
particular work especially if an organization is planning a strategic plan in highly uncertain
environments by defining challenges because it will allow a wide range of opinions and it can
allow the company to dig more deeply into the issue because aligning the right issue means a team
of employees can focus on answering the right questions that work towards the goal and avoids
unwanted discussions.
Another argument for strategic planning is that creating a strategic plan in uncertain times helps
with organizational alignment, the process can allow the exchange of creative new ideas which
also can include resolving any company disagreements by working out a solution. Allowing the
employees to be involved in the strategic planning process ensures that everyone is on the same
page which benefits the company because it shows that the organization values the employee’s
opinion which will ensure that the employees make better decisions and also have the companies’
best interests when doing the plan and plan goals. However, for an organization to be successful
in planning it has to make sure they have clear options because the jump from the present state to
the chosen future platform will not happen overnight the goal has to be clear and be spaced out for
any unforeseen bad decisions so that they can be corrected before it’s too late.
However, there are arguments against strategic planning in uncertain environments especially
trying to carry a plan out during turbulent economic conditions just because it’s common for every
good company to have one, by following what every other organization is doing can lead to
problems as if the company doesn’t take the time do it right then it can lead to confusion or if the
organization were to write a plan and then forget about it, strategic planning can only work if it’s
used as an effective management tool because if the plan is rushed it can cause hazards as
businesses in turbulent circumstances to believe that they can only have one day per strategic issue,
however big decisions have to be framed and then thought over for days until there is an agreement
meeting because not taking notes and not thinking about all possible risks can cause challenges.
Another argument against strategic planning in uncertain and turbulent environments is
unrealistic goals, objectives, or lack of focus, strategic plans must be organized clearly enough for
employees to understand what they are doing, and if the plan isn’t effective enough then the work
won’t be carried out effectively because the employees aren’t focused on the goal of the company.
If there isn’t a clear link to the vision of the organization then it could lead to the strategic plan
being useless because the company cannot move forward in their planning approach, the plans
cannot overly complex either because if they are not being effectively communicated due to their
complexity the employees will struggle to carry them out. The objective has to be clear as the
strategic plan will show an informative direction and if the decision is not clear then it can cause
many critical issues.
Benefits Associated with Formalized Strategic Decision Making
One benefit that can be associated with strategic decision making in uncertain and turbulent
environments is that it allows organizations to be proactive a strategic plan can ensure that a
company can foresee the future and what direction they want to take especially if the organization
is in an uncertain environment, using a strategic plan can help stop negative situations before they
happen and can take precautions to avoid them. Using a strong strategic plan can help organizations
be proactive as it is allowing the company to keep up with the no-stop-changing trends in the
market and can keep ahead of the competition. Another benefit is that it helps to increase market
share and profitability using a strategic plan it allows organizations to get valuable knowledge on
market trends, consumerism, and product and services which can help benefit their success. If this
is adapted well it can turn all sales and marketing efforts into more forward-thinking outcomes
which will help increase the company’s profitability and market share. The organization being
proactive in a turbulent environment can allow them to be open to new ideas like perhaps
partnering up with other companies or creating new business models because it’s important to
avoid uncertainty.
Another benefit is that using the strategic approach in an uncertain environment can help give
direction to meetings because creating a strategic plan involves a lot of time and effort the
employees of the company need to feel that all of the hard work they have produced will come
towards one final result. Planning can help stop free-flowing discussions because some employees
might feel as if they aren’t being heard and less valued or it can seem repetitive if it’s going around
in circles. By using a plan, it can make sure that all meetings are professional and always have a
topic related to the organization’s objectives and goals. For the organization benefit from strategic
planning during an uncertain and turbulent environment is to start scenario planning as it helps to
see all of the alternative routes to the major goal in the future and patterns of the key environmental
variables as scenario planning also helps start the process of strategic thinking.
Problems Associated with Formalized Strategic Decision Making
One problem that can be associated with strategic decision making in uncertain and turbulent
environments can be there is no plan behind the idea, when creating a strategic plan the
organization has to reflect on all of their futures goals and how to get there. If an organization has
no scenario then the company has no ambition on their organization succeeding, if the company
has no scenarios then it is hazardous because if the scenario isn’t clearly mapped out they can
ignore unexpected issues and will struggle to get over the complication because they are unsure of
the direction they are heading in.
Another problem could be that there are too many people involved in the strategic plan because
the plan is vital and having a wide range of stakeholders in the decisions can cause complications
because during turbulent times this can be difficult to start a process with too many opinions
because there will be choices that require a lot of attention and if there are too many stakeholders
it could be a longer decision-making process which delays the rest of the plan. It would be a messy
unorganized approach that wouldn’t have the organization’s best interests during times of
uncertainty it would be easier if the meets were kept small because it would prolong the companies
journey.
Another problem could be old objectives, an organization when writing a strategic plan has to
take into consideration that the plan will include everything and if the goals and objectives are
outdated and unrealistic the company will not be able to move forward in its decision making
because the strategic plans always function best the ideas are new and fresh, because it allows
them to start again and focus their attention on completing the objective because it can work
towards making the company successful in a turbulent and uncertain environment.
The Role of Uncertain and Dynamic Environments
The role of an uncertain and dynamic environment is a marketing campaign that can increase
a company’s profits for the long run and can help towards the strategic goals they may have. Due
to the challenge of the business market and environment constantly changing it is difficult to keep
but with the consumer preferences because they keep evolving and it means that the business has
to quickly adapt to the new trend quickly. Organizations must be able to monitor the changes that
are happening around the world because to be a success in an uncertain and dynamic environment
must be able to adapt quickly, because it is expensive and difficult to calculate the costs of the
decisions the company will need to make to increase the chance of success. The organization has
to be able to monitor and respond to important events that may surround their goals and carry out
the plans while being respectful to the changes in the world as if any changes happened the
business should be aware and quick enough to adapt their plans while still continuing objectives
that have been unaffected by the change in events.
There are challenges when using a marketing campaign like involving different target markets
with culturally relevant proposals, organizations should use PEST analysis to scan the political,
economic, social, and technological macro environments to tests the elements that can affect the
business. Using PEST analysis can help with the changes that evolve all over the world because
of social and cultural changes and the growing and aging population, which means there will be
increasing expansions in health care. Technological change will offer both opportunities and
threats because technology is a global market, Economic and political challenges companies can
be affected from countries abroad with different laws and legislation can affect the businesses
outlook.
These difficulties can create uncertainty in an organization’s internal and external
environment, because of how the company operates in the market. However, the business can try
and fix the uncertainty by managing their growth so they can control their costs but this may not
be a method that always works.
