Strategic Planning Process: Importance & Implications

Strategic planning process importance in business performance, corporate management, organizational learning, and business human resource strategy
Workers in a meeting. The strategic planning process is important to business organizations. (Photo: Public Domain)

Strategic plans direct managerial decisions for business development and limit the issues and risks in organizational development. The strategic plan provides a basis for the activities in the business, thereby impacting the performance of these activities and the performance of the entire organization. Some of the most important aspects of strategic planning include the vision, mission, values, and the strategy used in the organization of interest. In addition, other factors in the strategic planning activity of the organization include the timeliness of the strategies, as well as variables, like the business situation, the available courses of action, and the desired outcomes. The aim is to develop a strategic plan that suits the business condition based on an accurate evaluation of the internal factors and external factors influencing the operations of the organization.

The situation of the business organization is also a major factor in the development of business strategic plans. In this regard, strategic planning relates to a variety of activities throughout the business organization. The connection between strategic planning and every component of the business organization emphasizes the significance of strategic planning in supporting the overall growth and progress of the organization. An analysis of strategic planning in a business organization considers the organizational context, the connection between strategic plans and organizational development, the impacts of strategic planning on management performance and organizational performance, the efforts of strategic planners for organizational viability and attractiveness to employees and investors, and the ability of the organization to ensure sustainable and viable operations in the long term. Strategic planning serves as a foundation on which an organization builds its growth and expansion, such that the strategic planning process is a critical success factor in the development of organizations.

The Strategic Planning Context

The context of strategic planning involves the needs of the business organization, including the need for the organization to ensure that its operations properly match the conditions of the market. For instance, the market situation changes over time, such that the dynamism of the market condition can impact the demand for the products and services of the organization of interest. The context of strategic planning requires consideration for the changes that occur in the market situation to optimize the development of the organization.

The development of the organization depends on its ability to address the current market trends and the preferences and expectations of consumers. Such a condition means that strategic planning is usually conducted for the purpose of developing new guidelines, policies, programs, tasks, and procedures that the entire organization could follow to maximize the capability of satisfying the demand and expectations of consumers in the target market. Such a context emphasizes the ability of managers to maximize the performance of the organization through the strategic planning process. In effect, strategic planning is viewed as a managerial process or, sometimes, a managerial tool, for developing policies, programs, rules, and regulations that impose requirements and controls the activities within the organization, for the purpose of maximizing performance.

Another factor in the context of strategic planning is that it is based on the abilities and limitations of the business organization. For instance, as mentioned earlier, managers engage in the strategic planning process to maximize the performance of the organization. However, the reality is that managers need to consider the capabilities of the members of the organization, i.e., the workers of the business, because the characteristics of these organizational members directly influence or define the capabilities of the organization in fulfilling any strategic plan.

The context of strategic planning involves the skills, knowledge, abilities, and limitations of the members of the organization. Managers need to consider these characteristics of the workforce to ensure that the resulting strategic plan contributes to the maximization of the performance of the business. The context of the strategic planning process requires consideration for the characteristics of the internal environment of the organization, as well as consideration for the characteristics of the external organizational environment to optimize the effectiveness and potential for success in the implementation of the resulting strategic plan.

The Strategic Planning Process and Managerial Performance

The relationship between the activities of managers and the strategic planning process emphasizes the reality that the strategic planning process impacts managerial performance or management performance in the organization. For instance, the activities of managers in an organization generally involve strategic planning requiring an analysis of the internal organizational environment and the external organizational environment, such that the ability of the managers to address issues identified in the internal organizational environment and issues identified in the external organizational environment depends on the ability to utilize the strategic planning process and develop appropriate solutions and actions for organizational development.

The effectiveness of the strategic planning process to arrive at solutions impacts the effectiveness of managers in addressing organizational and business problems. As a result, it can be argued that the performance of managers in providing the appropriate solutions for the issues encountered in the organization depends on the specific activities involved in the strategic planning process. Therefore, the strategic planning process influences the capabilities of managers in providing support for organizational development.

Strategic Planning and Human Resource Management

The strategic planning process accounts for the characteristics of human resources because strategic plans are implemented through the action of the organization’s employees. It is necessary for the managers to ensure that the resulting strategic plan gains support or commitment from the workers in the organization. The inability of managers to get such commitment and support could spell disaster in the implementation of the strategic plan. This lack of commitment and support could lead to failure in implementing the strategic plan for the desired results.

Strategic planning influences the ability of managers to drive the organization’s human resources for the goals of the business. The commitment and support of individual workers in the organization depends on how strategic plans match the characteristics of the workforce. For example, workers’ expectations and preferences influence the probability of success of strategies and tactics. Strategic planning impacts management performance and influences human resource commitment and support for the strategic goals of the business organization. Individual workers apply the organization’s strategic plans in their job tasks. Alignment is necessary between human resource characteristics and strategic requirements and objectives.

Strategic Planning and Organizational Performance

Strategic planning impacts organizational performance. The level of organizational performance depends on the level of performance of managers. The effectiveness of managers in addressing the needs of the organization influences the ability of the organization to fulfill its goals. Managers engage in the strategic planning process to arrive at the best possible strategies and tactics for the satisfaction of goals and objectives based on the organization’s mission and vision. Individual workers determine the organizational ability to achieve goals and objectives. Human resources define the capabilities and core competencies for change in the organization. Thus, it is necessary for managers to ensure that the strategic planning process aims to bring out the best productivity levels from the organization’s human resources.

Strategic Planning, Business Viability & Investor Support

Organizations need to maximize human resource capabilities to achieve business goals and objectives. Employees want to make sure that the strategic planning process considers the needs and concerns of human resources. Workers want to feel that they are valued in the organization. Workers want to make sure that they are part of the organization and that they contribute to its development. Some workers tend to analyze the strategic planning process and consider it as an indicator of the connection between managers and subordinates, and of managerial support for the workforce. The strategic planning process must account for the concerns, interests, and abilities of workers. The maximization of the alignment of the strategic planning process to the characteristics of employees influences the organizational ability to attract the best possible employees for the long-term growth and development of the business.

Strategic planning influences the attractiveness of companies to investors. Organizations depend on their ability to attract investors. For instance, large business organizations, like Walmart, Apple, Tesla, Costco, and Unilever, as well as Amazon, McDonald’s, Disney, PepsiCo, and Nike, require support from investors to continue growing in the international market. Investor support influences the organizational capability to access valuable sources of capital. Investors examine companies’ strategic plans as a basis for their decisions on investing. When investing in a company, investors evaluate the company’s portfolio along with its strategic planning process and strategies to determine profitability and growth potential.

Final Note

Strategic planning is a critical factor that influences the success of the organization in the long-term. Strategic planning affects the performance of managers. It also influences human resource capabilities and the attractiveness of the organization to employees and investors. Moreover, strategic planning affects the organizational flexibility to address changes in the market, including changes in consumer preferences. Strategic planning determines the long-term success of business organizations.


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