Argument for the importance of strategic planning business essay

benefits of strategic planning

In still other cases, the combined purchasing power of several SBUs or the freedom to transfer technologies from one business to another can be more valuable than the opportunity to make profit-oriented decisions in discrete business units.

Strategic management, linking the rigor of formal planning to vigorous operational execution, may prove to be the answer.

Why is strategic planning important to the organization

In this case the formulation of a strategy should be scientific as it looks into data and information that are relevant to the firm. The number of products and markets served, the degree of technological sophistication required, and the complex economic systems involved far exceed the intellectual grasp of any one manager. The Toledo Clinic found the report on the national picture prepared by the consultant significantly helpful. To implement the strategy, the firm takes actions towards achieving strategic competitiveness and high returns. As in all stages of strategic planning, disagreements may surface. As Hitt et al indicate, effective strategic actions that take place in the context of carefully integrated strategy formulation and implementation actions result in desired strategic outcomes. Zangmeister Center in Columbus, Ohio. What is more crucial here is that it requires scientific method of studying the data and information before management decides on what is the best strategy to undertake given the assumptions formulated. Our findings indicate that formal strategic planning does indeed evolve along similar lines in different companies, albeit at varying rates of progress. For starters, having everyone in the same room fosters collegiality and creates a milieu in which you can focus on the direction of your practice, away from patient care and other duties. The sequence of the strategic management process can therefore be summarised as follows: effective strategic actions that take place in the context of carefully integrated strategy formulation and implementation actions result in desired strategic outcomes. Hanson et al, , Strategic management: competitiveness and globalisation, Thomson, South Melbourne, Victoria, Australia.

Other oncology groups may have conference space available in their office. Planning Process While planning as comprehensively and thoroughly as possible, Phase IV companies also try to keep their planning process flexible and creative.

Unwillingness or inability to change. Hoffman Spring however stresses that the strategic management process should be dynamic considering that there is ever changing markets and competitive structures. Having everyone participate in the strategic planning process fosters collegiality and creates an opportunity for discussion on the direction of the organization, which is why strategic planning often results in cultural transformation.

Your company and your strategic plan must be nimble and able to adapt as market conditions change.

Importance of strategic planning ppt

A version of this article appeared in the July issue of Harvard Business Review. Top management comes to the planning meetings prepared by its staff to bore in on a few key issues or events. Internal Assessment: Strengths and Weaknesses In identifying internal strengths and weaknesses, include hard data such as the number of new consults, cost of drugs per full-time-equivalent physician, and financial reports. Not understanding the environment or focusing on results. For most organisations this is accomplished through an annual appraisal programme. Those involved in creating the plan will be committed to seeing it through execution. The first being a long term plan establishing goals for the organization and the later a series of short term goals that are set in an effort to accomplish the long term strategies previously laid out. Having everyone participate in the strategic planning process fosters collegiality and creates an opportunity for discussion on the direction of the organization, which is why strategic planning often results in cultural transformation. For example: Observers trying to make sense of top management personnel changes in one highly successful telecommunications company were left scratching their heads, as first the chairman stepped down to become president and then he was further demoted to become CEO of a major subsidiary. Research therefore has revealed that firms that engage in strategic management generally outperform those that do not but when a firm fails to execute effectively, the culprit is often how and why of countless individual decisions and actions Chehade et al June Some industries are more volatile than others.

This article presents the principles of strategic planning and outlines processes that your practice can adapt for short- or long-term planning. Nevertheless, Phase II improves the effectiveness of strategic decision making.

Fewer and focused is better than numerous and nebulous.

importance of strategic planning and management in the business environment
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Strategic Management for Competitive Advantage