Strategic planning is an organization’s procedure of specifying
its directions or strategy and making decisions on apportioning its resources
to pursue this strategy. It may also extend to control mechanisms for guiding
on the execution of the strategy. Strategic planning became essential in
corporations during the 1960s and remains a critical aspect of strategic
management. It is carried out by strategic planners or strategists, who call
for many research sources and parties in their analysis of the organization and
its relationship to the surroundings in which it contends.
Strategy has many definitions but mostly, it requires preparing
goals, specifying actions to achieve the goals, and mobilizing resources to
fulfill the actions. A strategy identifies how the ends will be accomplished by
the means. The senior leadership of the organization is by and large tasked
with determining strategy.
Strategy can be planned or can be noted as a partner of activity
as the organization adjusts or vies its environment. It includes routines of
conceptualization and execution. It also helps coordinate both. However,
strategic planning is analytical in nature. Strategy formation itself involves
synthesis via strategic thinking. As such, strategic planning takes place around
the strategy formation activity.
According to Michael Porter (1980), formulation of competitive
strategy includes forethought of four key elements: personal values of the key
implementers, company strengths and weaknesses, broader societal expectations,
and industry opportunities and threats. The first two components interrelate to
factors internal to the company while the latter two relate to components
external to the company.
The end product of strategic planning includes communication and
documentation describing the organization’s strategy and how it should be
accomplished, sometimes referred to as the strategic plan. The strategy may
incorporate a diagnosis of the competitive situation, a guiding policy for
reaching the organization’s goals, and specific action plan to be accomplished.
Strategic planning has been criticized for attempting to
systematize strategic thinking and strategy formation, which Henry Mintzberg
argues are inherently creative activities regarding synthesis or “connecting the
dots” which cannot be systematized. Mintzberg reasons that strategic planning
can facilitate coordinate planning endeavors and evaluate progress on strategic
goals, but that it happens “around” the strategy formation process rather than
within it. Further, strategic planning functions distant from the “front line”
or contact with the competitive environment may not be effective at backing