Strategic Planning Planning in general refers to the process that provides guidance and direction regarding what an organization needs to do throughout its operations. It determines the answers to the “who, what, when, where and how” questions of a business operation. Planning is the first activity that management must undertake when creating yearly budgets and making other critical decisions that will affect the future. A company’s plan serves as its guide or compass for the activities and decisions made by individuals throughout the entire organiza-tion. The planning process not only defines the company’s objectives and goals, it sets the stage for prioritizing how to develop, communicate and carry out accomplishing them. Planning is usually not a popular activity. Many people think planning is a waste of time, because it takes time away from day-to-day activities. Other people believe that the environment the company operates in changes too quickly for a plan to be useful, since soon the situation will change, anyway. However, planning is an important management function for several reasons. The process of planning can be as important as the resulting plan, because the process forces management to think about where the company is and where the company wants to be. A plan brings about better coordination of company efforts, since everyone is working toward the same goals. And it provides clear performance standards, enabling better monitoring and control of results. Furthermore, good planning puts the company in a better position to anticipate and respond quickly to sudden changes in its environment. And finally, one of the primary success factors in a company is management’s competence in planning and controlling the firm’s activities. Management’s responsibility is to plan and control the long-range destiny of the company through decisions that either create or seize a positive opportunity, or escape a decline.
Posted on: Sat, 18 Oct 2014 07:42:03 +0000