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Suleyman Demirel University
Course work
“Strategic planning ”
Code of discipline: (MAR201)
Code of speciality: 5B050800
Student: Aiganym Kabdoldanova
Lecturer: Ramiz Ahmedov
Kaskelen,2013
Table of content:
Introduction
1.2 Difference between strategic planning and business planning
Main part
Stages in strategic planning
Strategic planning process
Strategic planning cycle
Ten Key Elements to Strategic Planning
Conclusion
1.Introduction
Every organization or major part of a complex organization occasionally has to make some momentous decisions- the sort of decisions that affect the entire destiny of the organization for years into the future. These decisions are designed to address the really biggest and most important issues facing an organization – issues so significant we might call them 'strategic elephants'. So our definition of strategic planning must have something about big decisions.
Such decisions are not simply about small adjustments to activity levels, but are the kind of decisions that may lead to a substantially different organizational structure, or major changes in the relationships among key stakeholders, competitive position, or strategic partners of the organization.
Sometimes the outside world forces such decisions on the organization. Such forces may include major shifts in the market, big changes in government policy, and radical moves by competing organizations.
Sometimes, it is something inside the organization that demands a major reappraisal. Technological change driving new methods of carrying out its work, or weakening of its financial structure, or a change in the senior management of the organization requiring a large re-organization are examples of such internal forces.
Organizations have always faced such pressures to make huge decisions. In recent years, the pressure has risen to the point where a systematic yet flexible process of dealing with such decisions is called for.
Such a process is variously and sometimes confusingly described as: corporate planning, strategic planning, business planning, and variations such as corporate strategic planning, or strategic business planning. Other labels make the subject more industry specific such as military strategic planning, hospital strategic planning, and in some jurisdictions what others know as urban and regional planning is sometimes called strategic planning.
As its name implies simply-strategic-planning.com will focus primarily on ‘strategic planning’. By this we have in mind any plan which looks forward several years and which is concerned with massive factors only. The focus of the decisions in the plan are the organization as a whole in its environment as a whole.
Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.
1.2 Difference between strategic planning and business planning
While a strategic plan is a type of business plan, there are several important distinctions between the two types that are worth noting.
A strategic plan is primarily used for implementing and managing the strategic direction of an existing organization. A business plan is used to initially start a business, obtain funding, or direct operations. The two plans cover different timeframes as well. A strategic plan generally covers a period of 3 to 5+ years, whereas a business plan is normally no more than one year.
A strategic plan is for established businesses, organizations and business owners that are serious about growing their organization. Whereas a business plan could be for new businesses and entrepreneurs who are startups.
A strategic plan is used to provide focus, direction and action in order to move the organization from where they are now to where they want to go. Whereas a business plan is used to provide a structure for ideas in order to initially define the business.
A strategic plan is critical to prioritizing resources (time, money and people) to grow the revenue and increase the return on investment. Whereas a business plan is critical if the business is seeking funding.
A strategic plan focuses on building a sustainable competitive advantage and is futuristic in nature. Whereas a business plan is used to assess the viability of a business opportunity, and is more tactical in nature.
A strategic plan is used to communicate the direction of the organization to the staff and stakeholders. However, a business plan is used to present the entrepreneur’s ideas to a bank.
Another way to grasp the difference is by understanding the difference in ‘scale’ between a strategic plan and a business plan. Larger organizations with multiple business units and a wide variety of products frequently start their annual planning process with a corporate-driven strategic plan. It is often followed by departmental plans and marketing plans that work down from the Strategic Plan. Smaller companies and startup companies typically use only a business plan to develop all aspects of the business on paper, obtain funding and then start the business. Many smaller companies – including startups never develop a Strategic Plan.
2.1Stages in strategic planning
Strategic planning is a continual process for improving organizational performanceby developing strategies to produce results. It involves looking at where the agency wants to go, assessing the agency’s current situation, and developing and implementing approaches for moving forward. We utilize a framework comprised of four distinct stages:
1. Prepare
Three critical steps must be accomplished prior to developing a strategic
plan:
• visioning
• assessment
• the development and implementation of a planning process.
In each of these areas, you will need to review and build on what is already in place—vision and mission statements
2. Plan
To develop the plan, you must establish priorities by considering the needs, strengths, and resources of your
organization. Three key questions must be answered:
• What do we want to accomplish?
• What will we do to get there?
• How will we know if we are making progress?
Once you have a draft document, circulate it for input, revise and finalize.
The following steps ensure that plans are used to guide the work of the organization:
• Communicating or "marketing" the plan,
• managing the implementation of the plan,
• supervising the actual work,
• monitoring and reporting progress on the plan.
4. Review/Revise
This stage starts the cycle over again, allowing the plan to be continuously updatedThis will keep it current and meaningful to the organization. On an ongoing basis the organization should:
• conduct assessments of its performance by gathering and analyzing information;
•convene the planning group to review performance and reassess goals, outcomes, strategies, and action steps
and to make recommendations for changes;
• revise the plan.
To the extent that the plan is updated, it will stay current and meaningful to the organization. A strong strategic planning process can be a powerful tool for systemic change within child welfare agencies and keep agencies focused on improving outcomes for children and families. Throughout the process, ongoing communication is critical.
2.2 Strategic planning process
Analysis
Design
Develop
Implementation
Evaluate
A mission statement is like an introductory paragraph: it lets the reader know where the writer is going, and it also shows that the writer knows where he or she is going. Likewise, a mission statement must communicates the essence of an organization to the reader. An organization's ability to articulate its mission indicates its focus and purposefulness. A mission statement typically describes an organization in terms of its:
Whereas the mission statement summarizes the what, how, and why of an organization's work, a vision statement presents an image of what success will look like. For example, the mission statement of the Support Centers of America is as follows:
The mission of the Support Centers of America is to increase the effectiveness of the nonprofit sector by providing management consulting, training and research. Our guiding principles are: promote client independence, expand cultural proficiency, collaborate with others, ensure our own competence, act as one organization.
We envision an ever increasing global movement to restore and revitalize the quality of life in local communities. The Support Centers of America will be a recognized contributor and leader in that movement.
With mission and vision statements in hand, an organization has taken an important step towards creating a shared, coherent idea of what it is strategically planning for.
As you can see the planning process depicted is composed of two interlinked cycles. The cycle on the left of the diagram focuses on the determination of corporate objectives and keeping them under review while the cycle on the right concerns the determination of strategy and keeping that under review.
The cycles are linked by an arrow in one direction only, indicating that a strategy is selected only after the objectives have been decided. A strategy is valid only to the extent that it achieves the objectives. Objectives are not influenced by strategic decisions. This approach to describing the strategic planning cycle or process is somewhat different from most of the charts that others have devised.
The diagram also suggests that corporate objectives are not affected by results or by a manager’s confidence in his plans. It also suggests that objectives cannot be determined until some of the environmental factors have been examined, i.e. those factors that affect the selection of objectives have to be examined before the objectives can be selected, but those that affect strategic decisions may be examined before, during or after the determination of objectives, the diagram is neutral on that point. It does show that strategic decisions cannot be taken until both the objectives and the factors affecting strategic decisions have been determined.
What we are really saying is that the strategic planning cycle is not a thing unto itself. The planning cycle is subject to the setting of corporate objectives. These are the province of corporate governance rather than corporate management. The objectives consist of two parts.
2.4Ten Key Elements to Strategic Planning
1. Communication Strategy – the development of a communication strategy is essential for the effective development and implementation of a strategic plan. In the communications strategy, you should determine who will be involved in the planning process, how they will be involved and what is being communicated to whom on the staff.
2. Strategic Planning Task Force – the development of a core team of organizational leaders is mandatory in the effective creation of a strategic plan. Each task force member should represent a key business area or department of the organization to ensure the plan has organization wide input and buy-in. The task force meets regularly with clearly defined deliverables to be presented at each meeting.
3. Vision Statement – an organization’s vision statement is simply their roadmap for the future. The direction of the organization should be broad to include all areas of impact but narrow enough to clearly define a path.
4. Mission Statement – an organization’s mission is a definition of whom and what they are. Often mission statements include core goals and values of the organization.
5. Values – values are the organization’s fundamental beliefs in how they operate. Values can provide a guideline for management and staff for acceptable organizational behavior. Often values relate to the organization’s organizational culture.
6. Goals – goals are broad based strategies needed to achieve your organization’s mission.
7. Objectives – objectives are specific, measurable, action oriented, realistic and time bound strategies that achieve the organization’s goals and vision.
8. Tasks – tasks are specific actionable events that are assigned to individuals/departments to achieve. They, too, should be specific, measurable and time bound.
9. Implementation Strategy – once the plan has been outlined, a tactical strategy is built that prioritizes initiatives and aligns resources. The implementation strategy pulls all the plan pieces together to ensure collectively there are no missing pieces and that the plan is feasible. As a part of the implementation strategy, accountability measures are put in place to ensure implementation takes place.
10. Monitoring of Strategic Plan – during implementation of a strategic plan, it is critical to monitor the success and challenges of planning assumptions and initiatives. When evaluating the successes of a plan, you must look objectively at the measurement criteria defined in our goals and objectives. It may be necessary to retool the plan and its assumptions if elements of the plan are off track.
Conclusion
In conclusion, strategic planning is clarifying the overall purpose and desired results of an organization, and how those results will be achieved.
There are different ways to do that planning, depending on the purpose(s) of the planning, the life cycle or stage of development of the organization, the culture of people in the organization, types of issues the organization is currently facing, and the rate of change in the external environment of the organization.
For example, many people use vision-based or goals-based planning, in which they clarify the results they want to achieve in the future. They develop a vision of what the organization and its customers or clients will look like at some point in the future, and then articulate what they have to do to achieve that vision. They work from the future to the present.
Unfortunately, many people believe that’s the only way to do strategic planning. That’s wrong. Another form of planning is issues-based planning, which clarifies current issues that the organization must soon address and how it will address them. Issues-based planning works from the present to the future. Issues-based planning is usually a shorter term planning and often is focused primarily ( but not exclusively) on internal matters.
There are many different perspectives on how to best do strategic planning — and many different practitioners and facilitators have very strong feelings about how strategic planning should be done.
But first, take a look at a simple analogy in order to further understand strategic planning.
References:
1. http://www.namac.org/strategic-planning-steps
2. http://www.businessdictionary.com/definition/strategic-planning.html
3. http://akmaraiha.blogspot.com/
4. http://www.123helpme.com/search.asp?text=strategic+planning
5. http://www.simply-strategic-planning.com/definition-of-strategic-planning.html
6. http://managementhelp.org/strategicplanning/