In general, the planning function of management can be described as a process for setting future direction; a means to reduce risk, and a vehicle for training managers (Coyle, 2003). It is also a process for making decisions, a way to develop consensus among top managers, and a means to develop a written long-range plan. Strategic situations are complex and involve uncertainty. Because planning is directed toward the future, predictions of changes in the environment are indispensable components of it. In today’s quest for managers who are more leaders than conciliators, any interest in scenarios on the part of the strategist or executive should be welcomed.
The planning process used by senior management differs from front-line management. Senior managers mostly use strategic plans and long-term plans in their activities. The purpose of strategic planning is to provide management with a framework in which decisions can be made which will have an impact on the organization (Coyle, 2003). A conscious effort to systematize the effort and to manage its evolution is preferable to an unmanaged and haphazard evolution. The basic planning problem is how to allocate the organization’s limited resources. The major benefits to be expected from planning include an improved sense of direction for the organization, better performance, increased understanding of the organization and its purpose, earlier awareness of problems, and more effective decisions. The need for organizational development came about as organization leaders came to realize that piecemeal effort to patch up an organization problem here, fix a procedure there, or change a job description elsewhere were inadequate (Eden and Ackermann, 1998). Modern managers saw a need for a long-range, coordinated strategy to develop organizational climates, ways of work, relationships, communication systems, and information systems in order to deal with both predictable and unpredictable occurrences. Organizational development involves a systematic analysis of the organization and recognition of the need to understand and effectively deal with change (Upton, 2004).
Front-line management uses long-range planning, which most often an extrapolation of the present. It answers the question of how to get the job done. Planning at this level can be described as a decision process that meets the goals and objectives of the organization and identifies the opportunities and constraints which face that organization as it attempts to be successful, and lays out a plan of action for goal attainment. Planning entails operational (tactical) planning, the planning of those actions to be taken to put strategies into effect. This type of planning answers the question of how to get the job done. It often consists of specific objectives accompanied by short narrative action plans (Eden and Ackermann, 1998)
For every organization, it is important to integrate different finds of plans in order to respond to changing environment and foresee possible changes in the structure of business and workforce. Different kinds of plans can help managers view change as an opportunity instead of a threat. In this way, they can realize their full potential, their power to create a firm’s future. These plans involve strategic, operational, and contingency plans for organizational development and transformations. Plans allow the company to create a systematic approach to an increasingly important responsibility of general management: positioning today’s business firm in a rapidly changing and complex global environment. For instance, strategic planning concerns itself with establishing the major directions for the organization, such as its purpose/mission, major clients to serve, major problems to pursue, and major delivery approaches (Coyle, 2003). Operational plans allow the organization to introduce these changes into practice. Various kinds of plans allow decision-makers to view directional alternatives and scenarios. A one-time, all-encompassing plan does not recognize the reality of the political process and that economic sector; for this reason, organizations need to continually reexamine their strategic options. For instance, “The majority of the firms describe their business strategy as a high-quality producer strategy rather than as a low-cost or time-based strategy” (Upton et al. 2004, p. 60). Conventional forecasting techniques provide no cohesive way of understanding the effect of changes that will occur in the future. Scenarios provide corporate intelligence and a link from traditional forecasting methods to modern interactive planning systems (Coyle, 2003). A clearer delineation of planning is needed to make it a potentially rich field of application and research. A piecemeal approach will not be adequate when changes in the environment and in strategy occur together. Dealing with such changes (both internal and external) calls for a radical rethinking of strategy design and methods. Organization development is an effort that is planned, organization-wide, and managed from the top. Its primary purpose is to increase organizational effectiveness and health through planned interventions in the organization’s process, using behavioral science knowledge (Coyle, 2003).
For instance, one of the recent examples of pollution is a UK-based company, County Tyrone. It was found that “scum and foam were found escaping from a concrete pipe at the plant into the stream on 5 June 2006” (Food Company Fined for Pollution, 2007). In order to meet social responsibility policy and ethical principles, County Tyrone should base its plans on ethical and legal rules. The principal responsibility of senior management and policymakers is to evaluate the economies and the environment in which the organization operates, noting existing and potential opportunities and threats confronting the organization and the community. At the same time, the community and organization should be examined to ascertain strengths and weaknesses in such areas as organizational structure, finance, productivity, service delivery capability, community involvement and understanding, and overall management capacity (Eden and Ackermann, 1998). The new strategic planning will help this company to reduce the number of unfair and illegal actions of employees and force the staff to follow strict ethical and social responsibility rules.
Through a systematic meshing of external opportunities and perceived threats with institutional strengths and weaknesses, senior management can establish specific directions for the organization and then develop the strategies, policies, and control mechanisms that are most likely to contribute to the achievement of community goals (Eden and Ackermann, 1998). To do so successfully, corporate leaders should install organizational processes that can help them understand how the environment might be changing and what the effect of likely consequences will be. Otherwise, despite their current strengths, business firms are unlikely to be able to meet the challenges of the emerging high-technology and deregulated global economy without strategic plans and decision-making techniques.
- Coyle, G. (2003). Practical Strategy: Structured Tools and Techniques. Financial Times/ Prentice Hall.
- Eden, C., Ackermann, F. (1998). Making Strategy: The Journey of Strategic Management. Sage Publications.
- Food Company Fined for Pollution (2007). BBC News. Web.
- Upton, N. et al (2004). Strategic and Business Planning Practices of Fast Growth Family Firms. Journal of Small Business Management 39 (1), 60.