when strategic planning is too formal: course hero

Is it possible to go from strategy to planning?

The subtle slide from strategy to planning occurs because planning is a thoroughly doable and comfortable exercise. Focus your energy on the key choices that influence revenue decision makers—that is, customers.

Why is it so hard to choose a strategy?

Worse, actually choosing a strategy entails making decisions that explicitly cut off possibilities and options. An executive may well fear that getting those decisions wrong will wreck his or her career. The natural reaction is to make the challenge less daunting by turning it into a problem that can be solved with tried and tested tools.

Is a detailed business plan enough to prepare a strategy?

A detailed plan may be comforting, but it’s not a strategy. Summary. Reprint: R1401F Strategy making forces executives to confront a future they can only guess at. It’s not surprising, then, that they try to make the task less daunting by preparing a comprehensive plan for how the company will achieve its goal. But good strategy is not...

What is a strategic plan?

Strategic plans become the budget’s descriptive front end, often projecting five years of financials in order to appear “strategic.” But management typically commits only to year one; in the context of years two through five, “strategic” actually means “impressionistic.”

What is a major criticism of formal strategic planning?

Criticism: Planning may create rigidity. Formal planning efforts can lock an organization into specific goals to be achieved within specific timetables. Such goals may have been set under the assumption that the environment wouldn't change.

What is formal strategic planning?

Formal strategic planning process refers to a formal process which focuses on the implementation of specific objectives over time (Armstrong, 1982, Song et al., 2011).

Which order describes the formal strategic planning process?

Define strategic tasks. Assess organization capabilities. Develop an implementation agenda. Create an implementation plan.

Why formal strategic planning systems are irrelevant for firms competing in high technology industries?

Formal strategic planning systems are not the best when competing in high-technology industries where the pace of change is so rapid that plans are routinely made obsolete by unforeseen events. Strategy is important in any business for the benefit of success.

What is formal planning?

Formal planning is aims to determine and objectives of planning. It is the action that determine in advance what should be done.

What is formal and informal planning?

Formal planning is an articulated, written form of planning that states particular objectives and methods. Informal planning is closer to the reality of day-to-day execution.In business, professionals often engage in planning for such complex tasks in terms of marketingorganisation.

What is the fourth step of the formal planning process?

In the fourth step in decision making, the decision will differ according to the criteria and method used.

What are the 7 stages of the strategic planning process?

Seven steps of a strategic planning processUnderstand the need for a strategic plan.Set goals.Develop assumptions or premises.Research different ways to achieve objectives.Choose your plan of action.Develop a supporting plan.Implement the strategic plan.

What are the four types of strategic planning?

Each type of plan commits employees within different departments and their resources to specific actions. While there are many different types, the four major types of plans include strategic, tactical, operational, and contingency.

Why do firms have formal planning systems?

Plans reduce uncertainty and risk, focus attention on goals, and enhance understanding of the external environment. Although most major organizations engage in formal planning, many managers fail to plan appropriately.

What are the differences between strategic plans and operational plans?

A strategic plan outlines an organization's mission along with the business goals to be achieved in the future. Operational planning is planning for the short term. An operational plan focuses on the day-to-day operations of departments and immediate departmental objectives.

What do you mean by strategy How is a business model different from strategy?

Put succinctly, business model refers to the logic of the firm, the way it operates and how it creates value for its stakeholders. Strategy refers to the choice of business model through which the firm will compete in the marketplace.

What is strategic plan?

They usually have three major parts. The first is a vision or mission statement that sets out a relatively lofty and aspirational goal. The second is a list of initiatives—such as product launches, geographic expansions, and construction projects—that the organization will carry out in pursuit of the goal. This part of the strategic plan tends to be very organized but also very long. The length of the list is generally constrained only by affordability.

Why is strategy paired with plan?

Virtually every time the word “strategy” is used, it is paired with some form of the word “plan,” as in the process of “strategic planning” or the resulting “strategic plan.” The subtle slide from strategy to planning occurs because planning is a thoroughly doable and comfortable exercise.

What happens when a company is comfortable with its strategy?

That’s good—but only up to a point. If a company is completely comfortable with its choices, it’s at risk of missing important changes in its environment. I have argued that planning, cost management, and focusing on capabilities are dangerous traps for the strategy maker. Yet those activities are essential; no company can neglect them. For if it’s strategy that compels customers to give the company its revenue, planning, cost control, and capabilities determine whether the revenue can be obtained at a price that is profitable for the company. Human nature being what it is, though, planning and the other activities will always dominate strategy rather than serve it—unless a conscious effort is made to prevent that. If you are comfortable with your company’s strategy, chances are you’re probably not making that effort.

What is the key to competitive advantage?

RBV holds that the key to a firm’s competitive advantage is the possession of valuable, rare, inimitable, and non-substitutable capabilities. This concept became extraordinarily appealing to executives, because it seemed to suggest that strategy was the identification and building of “core competencies,” or “strategic capabilities.” Note that this conveniently falls within the realm of the knowable and controllable. Any company can build a technical sales force or a software development lab or a distribution network and declare it a core competence. Executives can comfortably invest in such capabilities and control the entire experience. Within reason, they can guarantee success.

What does "strategic" mean in management?

But management typically commits only to year one; in the context of years two through five, “strategic” actually means “impressionistic. ”. This exercise arguably makes for more thoughtful and thorough budgets. However, it must not be confused with strategy.

Why is cost based planning important?

Costs lend themselves wonderfully to planning, because by and large they are under the control of the company. For the vast majority of costs, the company plays the role of customer. It decides how many employees to hire, how many square feet of real estate to lease, how many machines to procure, how much advertising to air, and so on. In some cases a company can, like any customer, decide to stop buying a particular good or service, and so even severance or shutdown costs can be under its control. Of course there are exceptions. Government agencies tell companies that they need to remit payroll taxes for each employee and buy a certain amount of compliance services. But the proverbial exceptions prove the rule: Costs imposed on the company by others make up a relatively small fraction of the overall cost picture, and most are derivative of company-controlled costs. (Payroll taxes, for instance, are incurred only when the company decides to hire an employee.)

Who was the first person to use emergent strategy?

In 1978 Henry Mintzberg published an influential article in Management Science that introduced emergent strategy, a concept he later popularized for the wider nonacademic business audience in his successful 1994 book, The Rise and Fall of Strategic Planning. Mintzberg’s insight was simple but indeed powerful.