The paper "Defining Strategic Planning" is a good example of management coursework. Strategic planning is best understood in business as developing a path to meet goals and objectives. However, there exist other insightful definitions for this term in the business world. One of the favoured definitions is that strategic planning is setting up of long term goals in a sequential manner. Small businesses often fail to plan adequately. And when they do, they make some common mistakes. The failure to develop a strategic plan or poor execution of these plans leads to poor performance by small companies as compared to larger companies.
This is supported by research from a number of authors who show that small firms tend to prefer informal plans. Additionally, firms that have succeeded attribute their success to quality planning. The advantages of a strategic plan also allow small firms to understand their position and capabilities, potential and weakness and threats in the industry. However, when developing strategic plans there common pitfalls that firms should consider. Among them is lack of ownership of the strategic plan. Defining strategic planning There is no standard definition of strategic planning though it is a common phrase in business management.
Various authors and management experts have developed varying definitions. Rogers, Finley and Galloway (2001) say that “ strategic planning is an iterative activity focused on discussion and consensus-building that clarifies and builds commitment to the organization’ s future direction and priorities, within a changing environment” (p. 4.). They add that this activity results in a final document called a strategic plan. Mintzberg (1994) on the other hand understands strategic planning as a form of organisational self-analysis which is all “ about breaking down a goal or set of intentions into steps, formalizing those steps so that they can be implemented almost automatically and articulating the anticipated consequences or results of each step” (p.
108). Wang, Walker and Redmond (2007) say that “ strategic planning is concerned with the setting of long-term organisational goals, the development and implementation of plans to achieve these goals and the allocation or diversion of resources necessary for realising these goals” (p. 3). From these definitions, it emerges strategic planning has to do with mapping a way forward for the organisation and keeping to it. Another way to understand strategic planning is to examine the two words independently.
Strategic is derived from the word strategy while planning is derived from the word plan. According to Kraus (2009), “ strategy creates an alignment between the enterprise’ s internal strengths and weaknesses on one hand and its opportunities and threats (SWOT) in its external environment on the other (p. 39). Planning, on the other hand, is viewed as programming thoughts, ideas and ideas into steps. Through a plan, activation of decisions made is arranged in sequence to suit the management and management decisions (Wang, Walker and Redmond (2007).
In this sense, therefore, strategic planning is aligning the strengths, weaknesses, opportunities and threats with step by step activities of an organisation. However, Kraus (2009) warns that an organisation working on such an understanding of strategic planning is based on formality and is predisposed to failure due to the dynamism of the business environment. He argues that strategy encompasses experimenting with different ideas, intuition and learning. This makes the concept of organisational knowledge a fundamental issue in strategic planning and strategic management.