Strategic Planning: The Components Of Planning In An Organization

Planning provides the fundamental basis of an effective and efficient organisation. Planning plays a crucial role in any organisation and underpins the inner working’s of a business. It provides ‘an invaluable framework’ (Mokwa, 1987) and basis for action which facilitates for goals to be achieved and ultimately guide an organisation towards success. The positive implications that planning can have eon a business are varied, numerous and far reaching. There are a range of process and components involved with planning which all must be used synergistically by managers in order for an organisation to successfully reach there goals. The benefits of planning range from: increased employee motivation as a consequence of clear vision, to the extensive benefits of enhanced resource allocation and the consequent increase in resource efficiency derived from well organised logistics. Despite this, business can still be successful with limited planning or adopting a form of ‘informal planning’, yet it cannot be disputed that adopting formal planning techniques will allow an organisation to operate more effectively, in an organised manner and ultimately function at a higher level allowing it to excel, succeed and prosper in the highly competitive modern-day business environment.

Planning is a vastly complex and comprehensive process, it involves a number of interrelated and interconnected components. These can be distilled into 3 main areas: strategic, tactical and operational planning.

Strategic planning

A ‘key component [of planning] is strategic planning’ (Porter 1998)

Michael porter stipulated that the formulation of a competitive, succesfull strategy must include the consideration of four key elements:

1. “Company strengths and weakne...

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... organisational environment. In order for this to occur there must be a manager or management team assemembeled wit hthe skills and capabilities

In conclusion, if organisations fail to plan they are putting themselves in a disadvantageous position where they are more susceptible to the volatile , ever changing external and internal environments. Contrastingly though, through the critical analysis of various sources, limitations of formal planning can be identified, yet ultimately the role of informal planning cannot be dismissed as the benefits it provides outweigh the potential disadvantages and if a holistically, systematic approach is taken to planning, and implementation of said plan, it will ‘consequently provide a fundamental basis’ (Mokwa, 1987) for which an organisation can utilise in order to enhance its performance, efficiency and overall effectiveness.