Strategies, strategic planning and strategic thinking
Strategic thinking:
Strategic thinking involves stepping back from your original organization so that you can view it in a way that helps you to understand what is important today, and what you need to do to make it successful in future. Strategic thinking simply requires that you collect different data and use the right methods to help you understand what really happens in your organization, and where the possibilities reside. It is a viewpoint that you will develop as you learn it in this course. Strategic thinking can be summarized by 3 sets of 4 questions: The really big questions: (1)- What business are we in? (2)- What is possible for this business? (3)- What is our uniqueness? (4)- What is important to our success? The key tactical questions: (1)- When do we create value for our customers and for ourselves? (2)- Where are the areas of greatest opportunities? (3)- How much money do we want to make (goals)? (4)- What do we have to do to sustain optimal levels of performance? The true operational questions: (1)- What needs to be done? (2)- What gets priority? (3)- Who will do this and by when? (4)- What is the best way to complete the steps? Within these questions are the insights that will help you to make sense of your organization today and that will lead you to develop it into the organization that it needs to be tomorrow.
Strategies, strategic planning and strategic thinking
• The term strategy can refer both to strategic plans and to actually realized (intended) strategies. Any (intended) strategy has the following characteristics:
It presents long – term guideline It is relevant for the company as a whole or for important parts of the company It is normally determined by top management It should guarantee the permanent accomplishment of the company’s overriding goals and objectives. Intended strategies can therefore be defined as managerial guidelines or statements which serve decision-making and subsequent action by providing points of reference. The process by which strategies are produced can be called strategic planning: + Strategic planning is a systematic process; strategy formulation through internal power struggles or simply by muddling through is not strategic planning. + The analysis and guidelines developed by strategic planning are long-term oriented. + The planning process looks at the company as a whole or at important parts of the company. + Competencies and responsibilities for strategic planning should be concentrated at the level of the top management. + The objective of the planning process is to guarantee the long-term accomplishment of the company’s overriding goals and objects. – – – –
The development of strategic planning and its integration into strategic management
• • The development of strategic planning: Before the end of the sixties there was no form of planning which focused on the building and maintenance of success potentials and which could therefore be properly called strategic planning. The quantitative long-term planning available to organization was a form of analysis which proceeded by extrapolating trends and attempting to project past development into future (e.g., the extrapolating of trends is gap analysis).
The development of strategic planning (s. p.) and its integration into strategic management
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While gap analysis identifies the gap which needs to be bridged, it offers no clues as how this can be done. The development of portfolio methods (at the beginning of the 70’s) is the first step in the development of S.P. to determine the strategic objectives of the business as a key element of developing a corporate strategy (the crucial problem in developing strategies for businesses is how to win the battle against competitors). Since mid 80’s the term strategic management (s. m.) has been preferred to s. p., not only in research literature but also in business practice. The term s. m. implies a broader view. S. m. goes beyond planning, including the realization of strategies as well as strategic control. The outcome of s. p. is only a set of plans and intensions (s. p. by itself, produces no action, no visible changes in the firm). To effect the changes, the firm needs appropriate capabilities: trained and motivated managers, strategic information, fluid and responsive systems and structures. Lacking these, the firm will appear to resist implementation of the plans.
The development of strategic planning (s. p.) and its integration into strategic management
The development of strategic planning (s. p.) and its integration into strategic management
The development of strategic planning (s. p.) and its integration into strategic management
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The role of strategic planning within strategic management
So, the change in terminology from s. p. to s. m. went together with an enlargement of view. S. p. was complemented by aspects of implementation and control. This means that s. m. compromises:
– 1. strategic planning, 2. the implementation of strategies, 3. strategic control. These three tasks can be understood as forming three stages of a single process. The first phase, s. p., sets out long-term goals, objectives and provides a rough guide to what is necessary in terms of actions and resources. This provides a clear direction and basis for the second stage: implementation. The final stage, strategic control, has a dual functions: (1)- it provides feedback on how strategies are realized. (2)- it checks whether the assumptions or premises underlying the strategic plans correspond to reality. If there is too much divergence from the strategic plans and their implementation, or if the premises behind the strategies do not correspond to reality, then planning must begin again. Although the three stages from a single process, they do not take place consecutively; there is considerable temporal overlapping. For example, stages 2 and 3, implementation and control, will obviously take place simultaneously. This overlapping in time means that there is an interplay between the three separate tasks, with each influencing the other two.