Firms often compete with each other to gain their customers’ attention and business. While dong so each firm tries to chalk out its unique strategy of game plan based on its own internal strengths and weaknesses in terms of which products or services to pursue, which investments to make, which human resource policy to implement and which organizational structure to adopt. The whole exercise is meant to find how to effectively, compete against whom, when, where and for what, so that the firm can generate successful performance over an extended period of time. The essence of strategy lies in striking a harmonious balance between a firm’s distinctive skills and capabilities and the external environment in which it operates. When the firm is able to perform activities more effectively than its rivals, it stays ahead in the race and emerges as a leader. Strategic planning and strategic management enables a firm to formulate and implement such winning game plans over a period of time.
The necessity for planning arises because of the fact that business organizations have to operate, survive and progress in a highly dynamic environment where change is the rule not the exception. The change may be sudden and extensive or it is slow and almost imperceptible.
The rapid advances in technology global competition, changing preferences of customers, changing policies of government have multiplied the problems of a manager all over the globe. Most of these changes are thrust on managers and they are forced to adjust their activities (customer service, teamwork, speed, and product / services quality. Productivity improvements have become the new corporate mantras!) in order to take full advantage of favorable developments or to minimize the adverse effects of unfavorable ones. Successful managers try to visualize the problems before they turn into emergencies. Successful managers deal with foreseen problems, and unsuccessful managers’ struggle with unforeseen problems. The difference lies in planning (Terry) Managers charged with the responsibility of achieving definite targets do not wait for the future. They make the future (Drucker). They introduce original initiatives by removing present difficulties anticipating future problems; changing the goals to meet internal and external challenges experimenting with creative ideas, attempting to shape to future and creating a more desirable environment.
Planning is the process of deciding in advance what should be accomplished and how it should be realized. It involves selecting objectives and how to achieve them. Strategic planning is a type of planning. But unlike short term planning, strategic planning involves an extended time frame the deployment of a large percentage of the resources of an organization a wide spectrum of activities and a major eventual impact.
Strategic Operational and Tactical Planning
Strategic planning thus is long term in nature. It tends to be top management responsibility It requires looking outside the organization for threats and opportunities. It also requires looking inside the organization for finding out weaknesses and strengths. It affects many parts of the organization as its decisions have enduring effects that are difficult to reverse. It tries to equip the organization with capabilities needed to confront future uncertainties by taking a holistic view of the entire organization. Its focus is clearly on the jungle not the trees. The main objective is to positive the firm in an advantageous relation to the environment, keeping its own internal capabilities in mind. In simple terms, strategic planning is the process determining the major objectives of an organization and the policies and strategies that will govern the acquisition use and disposition of resources to achieve those objectives.
As mentioned earlier, strategic plans are designed to meet the broad objectives of an organization. They are long range plans. Tactical plans are concerned with implementing strategic plans by coordinating the work of various departments in an organization. They are known as intermediate plans. Operational plans are short range plans. They offer details as to how the strategic plans will be accomplished.