Resources being limited, organisational strengths and weaknesses should be analysed to use the resources in areas where they can be optimally utilised. Strategic planning is a … Resources are scarce and strategic planning helps in their use in the areas where they are required most. Strategies are goal-oriented. Not only does a strategic training plan focus on improving the quality of work in the present, but it is developed to make your workforce more competitive in the long term. It promotes discipline in the organisation and enhances human resource effectiveness and also organisational effectiveness. ; relationship between organisation’s internal and external environment, its culture, values, ethics and beliefs. Sometimes, short-term commitments also defer making long-term strategies. Strategic planning makes best use of resources to achieve maximum output. Firms have financial benefits if they make strategic plans. In order to avoid developing risky objectives and strategies which they will not be able to achieve, managers may land up framing sub-optimal goals and plans. (b) Does the strategy focus organisational resources on critical success factors in the product/market area for which it is intended to be formulated? Objective Formulation: In fact, they observe that many disintegrating firms have relied too heavily on detached, analytical decisions at the expense of inquisitiveness and innovation. This is possible if they foresee the future. Several messages emerge from this and similar studies. It is a continuous process. Thus when an organization no longer provides beneficial services or products to its stakeholders, society perceives little need for its existence. It reveals gap between the present state and future aspirations of the organisation. Nature of Planning It is a contribution to objectives, It is primacy among the manager’s tasks. Marxist Perspective of Industrial Relations, Differences Between Profit and Non Profit Organizations, Difference Between Commercial Marketing and Social marketing, Arguments For and Against Social Responsibility of Business, The Effect of Organizational Culture on Decision Making. Risk is inherent in every business and failure to anticipate risk through strategic planning is almost sure to lead the business to failure unless otherwise proved by chance. It will also result in huge financial losses for the organisation. It means dropping some of the resources (human and non-human) to make best use of the remaining ones. Your email address will not be published. After analysing the external environment, firms evaluate their internal resource position to identify their strengths and weaknesses in relation to environmental threats and opportunities. However, reactive strategies are short-term, causing firms to spend a significant amount of resources and time. Mission explains the reason why business is in existence. It helps in generating strategies and answer the basic question of strategic planning—what we are and what we want to be or where we are and where we want to go? The chosen strategy should be directed to maximise long-term goals of the organisation. If its grand strategy is correct, any number of tactical errors can be made and yet the enterprise proves successful.” Effective allocation of resources, scientific thinking, effective organisation structure, coordination and integration of functional activities and effective system of control, all contribute to successful strategic planning. A formal strategic control system is designed which answers questions such as: (a) Is the strategy being implemented as planned? Strategic planning helps in knowing where we are and where we want to go so that environmental threats and opportunities can be exploited, given the strengths and weaknesses of the organisation. An organization is a collective enterprise, a group of individuals that provides society with more than individual enrichment. Allocation of resources and attempts to meet the goals is facilitated through clear specifications in strategic planning. The resulting strategic plan creates new exhibits at Nature Play, the project will include additional signage within the Wetlands and the City of Murfreesboro. Implementation requires designing the suitable organisation structure, developing a sound system of communication, motivation and control, allocating authority responsibility, resources etc. Companies like Reliance, Infosys, Tata, Wipro, Deloitte, etc. If they do not have the knowledge and skill to prepare strategic plans, the desired results will not be achieved. It makes the objectives operational and provides right direction to organisational activities. If a church fails to serve its members, it will lose its congregation. It helps organisations analyse their strengths and weaknesses and adapt to the environment. ), finance (debt-equity ratio, dividend policy etc.) If business units at different levels (corporate level, business level and functional level) are not coordinated, it can create problems for effective implementation of strategic plans. Chances of making mistakes and choosing wrong objectives and strategies, thus, get reduced. During this period, changes in technological or political forces can affect implementation of decisions and plans may, therefore, fail. Learn how your comment data is processed. Paying high dividends is less meaningful than paying dividends at the rate of 40%. Strategic development's purpose is to enhance those skills your employees and managers already possess . 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