Strategic and Tactical Planning Term Paper

Excerpt from Term Paper :

Strategic and Tactical Planning- Definition

Strategic Planning - Through the Years

The Eight Maxims of Strategy

Benefits and Costs Associated with Strategic Planning

The Need for Strategic Planning

Successful Implementation of Strategies

The Effects of Strategic Planning - Literature Review

Strategic and Tactical Planning - A Case Study of the Early 1990s

Strategic Planning - The Present Scenario

The Conclusions, Recommendations and Areas of Future Research

STRATEGIC AND TACTICAL PLANNING

A paper on the Strategic and Tactical Planning. The paper defines strategic planning and the basic premises of the concept of planning, presents a review of the literature in the area to study the effect of strategic planning in organizations and poses certain question in the area of effectiveness of strategic planning that need to be addressed by future researchers in the field.

Thesis Statement: Strategic and tactical planning increasingly assuming significance, yet ineffective planning leads to failure of planning in companies.

Introduction:

Though the concept of planning is generally known to all and sundry, it assumes confusing connotations in business parlance depending on the prefixes added to it such as long-range planning, annual planning and strategic planning. Long-range planning is usually associated with forecasting, annual planning with budgeting and strategic planning with the growth strategy of the organization. The term 'Corporate Planning' offers yet another implication, however, it is usually an overall organizational plan including all the other plans and is mainly guided by strategic planning and strategic management principles.

Strategic and Tactical Planning- Definition

The word 'strategy' was extensively used by the armed forces originally. In war the two warring factions plan ahead by taking into account what the opponent is expected to and strategize accordingly to overcome him. In business, there is no enemy or opponent as such, but there are many factors, which would affect the business adversely, thus strategic planning assumes significance in business management. The term strategy began to be used in business with the increase in competition and complexity of operations. McFarland defines Strategy as " executive behavior whose purpose is to achieve success for the company or personal goals in a competitive environment, based on the actual or probable actions of others." Strategy is also defined as 'a complex plan for bringing the organisation from a given posture to a desired position in a future period of time'.

Thus the purpose of strategies is to determine and communicate a picture of the kind of enterprise that is envisioned, through a system of major objectives and policies. Strategy is normally influenced by both external and internal considerations. The external factors that influence a strategy include the competitive environment and overall industry standards; the company's market opportunities and threats and the societal, political and regulatory factors. The primary internal considerations are the strengths, weaknesses, and unique capabilities; the managements philosophies, and ethics and personal ambitions of the manager and the organizations culture and shared values. A good strategy would address both the external and internal considerations effectively and would lead to continued advantage and enhanced performance of the company in terms of business growth.

Strategic planning thus involves assessing the company's current business environment, defining, articulating the company's business mission, envisioning the state of the business in future period of time, identifying the company's strengths, weaknesses, opportunities and threats and charting a course of action for the company executives to adhere to so that the company reaches the envisioned status as per the plan. This means that management today involves a more complex aspect and managers need to think strategically in envisioning the company's position in the light of the changing business conditions. They should be knowledgeable on the company's external environment, internal strengths and should know the nature of the business thoroughly to decide on the strategic policies. As rightly prescribed by Thompson and Strickland (2003), 'A strategic vision indicates management's aspirations for the organization, providing a panoramic view of "what businesses we want to be in, where we are headed, and the kind of company we are trying to create." (Thompson and Strickland, 2003)

Strategic Planning - Through the Years

Corporate planning has advanced through phases, since its widespread inception in the 1960s. Planning in the 1960s was essentially based on long-range planning since industrial growth was relatively stable and planning usually meant the development of expansion and growth plans through such means as capacity expansions, diversification, acquisition and mergers and also the allocation of resources. During those years the corporate planning process paid little attention to enhancing the quality of service or competitive performance. Strategic planning was introduced in the mid 1970s with new planning techniques that encouraged the formulation of corporate and business strategy, before the preparation on detailed operating plans. During this time, many western countries were faced with economic recession following the energy crisis of 1973-74, marked by high inflation, turbulent industrial relations and large-scale public investment.

However, the Japanese with clear strategies on the new standards of product quality, customer service and marketing were spearheading business and economic growth. Lack of strategic vision and the inability to take tough decisions quickly were seen as the reasons for economic turmoil in the west. With this business organizations turned towards articulating their strategies in the plans and corporate planning began to be essentially guided by strategic or tactical planning. The techniques of strategic planning include scenario planning including planning for social and political change, business portfolio analysis, sensitivity and risk analysis, zero- base budgeting, experience curves, environmental impact assessment etc. In the 1980s, the strategic questions such as how to grow an prosper in an uncertain environment and how the corporate cultures could be changed to meet competitive standards in productivity, quality and customer service began to afflict the managers, and a new management style -the strategic management- emerged as the solution.

The Eight Maxims of Strategy

Sir Basil H. Liddell-Hart (1968) in his book ' Strategy' proposes eight maxims for deciding on a strategy. The firs maxim is 'Adjust your end to your means' suggesting that the policies and strategies should be based on what is achievable. The facts should be thoroughly considered as to what is possible and what is not possible. The second maxim is 'Keep your object always in mind, while adapting your plan to circumstances' meaning that though alternate course of action could be considered, they should be essentially meeting the objective initially identified and that an objective itself should contribute to the achievement of the envisioned result. The third maxim states that 'Choose the line (or course) of least expectation' suggesting the strategist to adopt that course of action which the opponent expects as the least probable and therefore would not prevent. The fourth maxim put forth by Basil Hart is to 'Exploit the line of least resistance' provided the line would eventually result in the achievement of the underlying objective of the business. The opportunity should be thoroughly analysed and tactically verified to ensure success and the resources allocation and management methods adopted should be strategically chosen the ensure success.

The fifth maxim states 'take a line of operation, which offers alternative objectives' suggesting that a single course of action should be chosen that would inherently present different objectives, as this would not reveal the real objective behind the action and the opponent would not able to outmanoeuvre the strategy. The sixth maxim suggests to 'Ensure that both plans and dispositions are flexible -- adaptable to circumstances' and contingency plans are to be included to respond to either success or failure in an effective manner, for which the allocation and organization of resources are also to be done in a way to facilitate adaptation. The seventh maxim proposes thus 'Do not throw your weight into a stroke whilst your opponent is on guard -- whilst he is well placed to parry or evade it' meaning that the opponent should by attacked only after he is psychologically stranded and is demoralized to such levels so as to fight back. The eighth maxim guards thus 'Do not renew an attack along the same line (or in the same form) after it has once failed' because failed strategies seldom proves successful the second time.

Benefits and Costs Associated with Strategic Planning

Strategically leading the company towards enhanced performance and a competitive advantage that comes with it, is a management philosophy that is at times adopted by companies for even staying in business, though proper strategic planning ensure a leading edge to the company. What ever may be the purpose the advantages that strategic thinking and deliberate strategic and tactical planning and management in business provides the managers and executives with a clear understanding as to the what is the intended objective of the management; what is its vision of the future of business; make the managers and staff more watchful of new opportunities and also the industrial and other developments that would pose a threat to the business, would assist in the integration of the company as a unified business entity, help adopt a more…

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