Cushman and Perry (2010) suggest that strategic planning should be a process aimed at developing the commitment among the leadership to the direction chosen by the organization. It should offer a powerful technique for effective and reliable strategic management in an organization according to Judson (2005). It is based on expected changes within the working environment through the input from the individuals and other levels of the firm or group which provides, in turn, the opportunity to introduce new ideas. A clear planning process must be in place to enable formulation and choice of realistic strategic alternatives with keen focus on the information obtained from environmental scanning.
The scope of this paper shall be limited to the necessity of strategic planning, the general planning process and the process of choice making in strategic alternatives from given environmental information.
Rationale for strategic planning
Frans et al (2010), in his writing suggests that the lack of proper understanding of the information on strategic planning and management by small companies could be the reason of their stagnation. The documentation of the vision, mission and objective statements by these organizations has over the years helped improve the productivity by their human and capital resource. A strategic plan should therefore offer an entry point for new ideas since and a screen through which one can evaluate the achievement over a period of time hence formulate possible adjustments as need may be.
In health services strategic planning and management, strategic plan development and other analytical skills are needful in implementation of organizational strategies encountered as it highlights the resource allocation options to enable profitability while creating satisfaction among the players in the organization. This creates constructive internal and external competitiveness if it results from an efficient plan. Understanding the dynamics of staying in productivity justifies the extra resource allocation in the strategic planning process by many organizations today.
The process of strategic planning begins with the right selection of the planning team. This means an optimal number of people with a balanced representation to avoid conflict of interest. A time schedule should be then developed by the planning team which must provide for time to reflect on the deliberations. Reliable communication must also be established to ensure sufficient sharing of the information under discussion before the planning process begins.
The planning process must then take into account the important elements of the planning process which includes:
- mission statement,
- objectives statement,
- situation analysis,
- strategy formulation,
This involves highlighting the group’s reason of existence. It is usually expressed as a mission statement aimed at conveying to the stakeholders the sense of purpose hence gives the company’s image to its customers.
These are solid goals which the organization desires to achieve. This comes after a realization by the company on that which should be changed and what not to change in a genuinely sacred manner according to Napier et al (1997) . These may include growth in earnings, improved service delivery or even improved capital base. The basic guideline in setting up the objectives is to ensure that they are challenging enough to instill competition but be at the same time achievable.
Daft and Marcic (2008) asserts that situation analysis begins with an intensive assessment of both intrinsic and extrinsic factors affecting the organization in its operation leading to the identification of all available opportunities from the current situation hence come up with a strategic plan for reaching the formulated objectives. At this level it is particularly important to take into account the strengths and weaknesses of the organization.ths helps to avoid the unattainable objectives.
Upon successful environmental scan for all possible opportunities, specific strategic alternatives are drafted depending on the specific situation. According to Frans et al (2010), little research has been done on how small organizations formulate performance expectations and suggests that this could be the reason of the unpopular strategic plans by these firms some of which are not achievable or feasible. Options have had to be developed as Porter (2001) observes that many companies have been opting for the generic strategies such as: leadership, focus and differentiation which may be considered while defining strategic alternatives. It is however advisable to only pursue one generic strategy alternative at a time on a single product to avoid mix up of objectives set.
After the formulation process, the most likely strategy is conceptualized and prioritized in readiness for implementation. During this time, the strategy is translated in detailed policies which can easily be understood by the functional units of the organization which may include: marketing, information systems, production and human resource among others. This helps in highlighting the practical issues as Ching-Hua et al (2010) points out; to improve company serviceability through appropriate accounting for all uncertainties of order configuration, which might have been missed out at higher levels of organization as well as identification of required resources and introduction of all necessary changes within the organization.
This is the final phase of strategic planning process involving measurement and valuation of the strategies with the changes made as needful so as to keep track of the plan. This may include setting up of performance standards, actual performance measurement (Hill and Jones, 2009) and taking of appropriate action to ensure success.
In general as the strategic plan is taken through all these steps the company should be able to see its past, present and future performance so as to keep focus on its growth and improvement of its profitability. The plan is therefore not an option but a vital part of the organization and so must be given the attention it so deserves.
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