Strategic planning and strategic management. Strategic planning tools

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The need to use the principles of strategic planning and management was formulated in the middle of the 20th century, when managers began to pay more attention to external factors in the development of enterprises. Since then, the firm has ceased to be regarded as a closed system, the effectiveness of which depends entirely on internal prerequisites. A novelty of strategic planning and strategic management of the management of closed forms of company development has been the emphasis on situational behavior. This concept opened up more opportunities for preventing external threats and developing mechanisms to protect against risks in the market environment.

Strategy in the management system

From the point of view of enterprise planning and management, strategy at a basic level should be understood as the general direction of development or the definition of a course of action. As we approach the disclosure of the essence of this concept, the differences between planning andmanagement. Therefore, to begin with, it is worth considering the strategy as something general that determines the main goal of the company. Although even in this representation there may be different interpretations. For example, for the management of a particular company, a strategy is a program of actions aimed at achieving certain goals, taking into account specific conditions, resources and opportunities. But also the strategy can be understood as a general business concept with a clear set of management principles that are universally applicable to all market participants.

One way or another, in today's competitive environment, no enterprise can be effective without a formulated action plan and development tactics. What does the business strategy development process involve? This is also a series of organizational and managerial actions, the purpose of which is to create a viable model for the development of an enterprise or a concept for its existence in the market. If we talk about the general rules for developing planning models, then the following will be classified as their main types:

• The rules of the company's relationship with the external environment, which determine the characteristics of products, logistics, competitive advantages, etc. In accordance with such standards, in particular, product-market strategic planning of the company is implemented in the context of its development.
• Rules for performing everyday tasks. They are also called operational or production techniques.
• Rules for evaluating the performance of an enterprise, thanks to which management canmake the necessary corrections and amendments.
• Rules that govern relationships within a company. They form an organizational or corporate concept.

Sharpness, clarity, and unambiguity are important characteristics of a strategic plan, but business model development techniques should not be viewed as a dry and mathematically precise process. Especially now in the field of strategic planning, there are many concepts in which not only conscious social, but also unconscious actions play a significant role. The principles of intuitive planning with the rejection of a formalized approach provide more opportunities to reveal the unformulated creative aspects of the activity, which is also an advantage that reveals new qualities of the enterprise.

Strategic vision and mission

The vision in this case means a certain image of the future of the company in the future of its development. To build an ideal figurative model, two elements will be important: an understanding of the purpose of the organization and an emotional appeal for employees that motivates them to strive to achieve the task. However, the essence of strategic vision comes from a set of components, including intellectual and cognitive elements. Fundamental changes in the work of the company always require the definition of new ideas about a better organizational model. In this vein, the less effective concept of enterprise development is being replaced by a more promising vision with the desired reality.

The vision of the future is also related to the concept of the mission of the enterprise in the eyes of the public. The mission in strategic planning and strategic management is formulated as the main goal of the organization, reflecting its purpose in one form or another. As a rule, this is a statement of the company's management, which states an intention that is significant for society. But the addressee is not only society and the target client audience, but also the employees themselves. The mission statement itself should contain inspiring and motivating accents. The main task of the formulated mission is to ensure the harmony of the external and internal environment when the organization moves towards strategic goals. This is achieved through the following functions:

• Increase employee motivation.
• Supporting corporate values, which can be expressed through rewarding employees for mastering new skills and knowledge.
• Determination of the direction of development of the enterprise, taking into account new technologies and market platforms.
• Ensuring the flexibility of the organization in terms of the concept of its mission. Flexibility refers to the ability to change certain parameters or characteristics of the chosen course in the context of changing conditions.

The concept of strategic planning

Combining the principles of business planning and strategy allows us to formulate the vision and mission of the enterprise not in an abstract, but in a technological form. In a broad sense, planning technology is the development of methods and techniques by whichthe goals of the company and the means to achieve them are developed. That is, it is not just the ability of the leadership or the project team to clearly articulate the mission and anticipate future difficulties at the stage of development of the organization. To a greater extent, the technology of strategic planning reflects the principles in accordance with which the model of the future of the company is being worked out.

• The principle of unity. The structure of interaction of a set of corporate elements is approved, each of which is an entity and performs a specific task. At the same time, despite the difference in functions, the elements are oriented towards the same general goal in accordance with the mission.
• Participation of employees of the enterprise in the planning process. A necessary condition for successful planning, thanks to which a model that is more thought out technically and close to reality is implemented.
• Continuity. The process of strategic planning and management of an organization does not stop within one work cycle or stage of development. It is continuous, but that does not mean that it is immutable. It is in the transitions between cycles and stages that there may be a need to revise or supplement the tasks and methods for their solution.
• Planning accuracy. With all the figurativeness and abstractness of some elements, it is desirable to strive for detailing and concretization of the model. At the stages of implementing the plan, this will reduce many costs and optimize work processes when organizing the structure of the enterprise.

Classificationtime orientation planning

Principles of strategy and planning in most cases, by default, are oriented towards the future, taking into account the promising opportunities for the application of new technologies. This is how preactive planning works, in which the bet is placed on the benefits of future changes. In this case, it is difficult to calculate the conditions for strategic planning with a perspective, since you have to guess the probabilities of changes in the market. Therefore, most often, preactive models are not aimed at obtaining new profits, but at the survival and stable growth of the enterprise.

Often, planning is limited to the present time, where it is possible to fully correlate the tasks of the organization and the conditions for achieving the set goals. Such models are called inactive. Their distinguishing feature is contentment with the present. To change the natural development of an enterprise according to such a scheme, minimal resources are sufficient, which is due to the possibility of more accurate forecasting. But even in this case, the competition is won by participants with certain advantages: the ability to understand the essence of what is happening, the number of connections, experience, etc.

The past can also be attractive for strategic planning. It makes it possible to see the problem of development not in a certain period, but in its full life cycle from the moment of inception with the prerequisites to the peak of development at the current moment. As for the future, strategic planning and strategic management of this type (reactive) denies possible improvements in the future. Unlikefrom inactive, in this case, a sufficiently high margin of organizational strength of the enterprise is ensured against the background of the negative influence of external factors. The disadvantage of a reactive development strategy is the exclusion of the possibility of a “quick” breakthrough in the market under the same uncertainty.

Classification of planning by duration

The planning time horizon can also be different depending on the tasks that need to be implemented at a particular stage. In particular, the following time intervals are distinguished:

• 10-25 years old. Long-term planning (for the future), which emphasizes the achievement of large goals, taking into account complex forecasts for the future. This type of planning has two fundamental differences: the combination of several strategies in one course of movement and the introduction of innovations. As part of long-term planning, general general goals are set that reflect the industry-specific tasks of the enterprise.
• 3-5 years. Medium term planning. Smaller scale, but more detailed, in which the emphasis is on the distribution function. That is, in this case, we can talk about long-term planning at the enterprise, but on a smaller scale. The object of the medium-term strategy can be understood as production capacities, financial resources, technologies, products, investments, enterprise structure, human resources, etc.
• 1 year or less. Short-term (annual) planning. This is a kind of form of current plans, logistics tasksor operational and production goals that are within the framework of a short-term agreement. Such planning may involve short-term contracts with suppliers and other partners.

As you can see, the planning horizon largely depends on the specific goals of the enterprise, although they can cover different time periods. At the same time, it is the strategic vision of the future of the enterprise that is more consistent with long-term planning, within which investment projects, modernization, expansion of capacities, etc. are organized. Another thing is that long-term plans for many years may include small short-term and medium-term projects with local tasks, aimed at achieving general goals.

Developing a company plan

The development tactics of any modern enterprise are based on tasks and goals, which in turn are based on a formulated mission. Factors such as profitability, sales volumes, innovation, image component, potential risks, etc. should be used as the initial data for the plan. Next, the question of selecting a methodology for developing a marketing plan, taking into account the goals and formulated interests, comes into play. enterprises. In the theoretical and methodological system of strategic planning, there are several approaches:

• Functional. The elements of marketing and production optimization are combined, resulting inbecomes a strategy for effective competition at the expense of basic input resources. Actually, the immediate tasks of the enterprise.
• Corporate. A plan for the effective organization of labor activity within the company is being developed.
• Business. Development of a tactical and strategic plan that will allow the company to survive in tough market conditions.
• Operational. Narrow and even point or situational planning for specific departments of the enterprise in the short term.

The creation of a plan is not complete without a feasibility study of the business, which includes a report on the financial structure of the enterprise. It is based on the analysis and evaluation of the economic feasibility of implementing a specific project of the company. The main principle of developing this report is to compare the costs and results of the enterprise.

Strategic planning tools

Modern large companies use an extensive list of tools to develop planning methods to optimize work processes. One of the most effective instrumental groups of this type is the SWOT analysis. On its basis, promising models of strategic positioning are based, but they can hardly be called universal. At a minimum, each niche requires its own version of SWOT tools with one or another list of adaptation systems. For example, financial planning in the activities of an organization involves an assessment of external and internal factors. A wide array of input data will allow the analytical scheme to determine the currentthe state of the organization, as well as its optimal model in the overall development structure. The SWOT-analysis technology, in particular, works with general, intra-industry and internal factors of companies' activities, reflecting not only production and market, but also socio-cultural, political, legal and even stylistic nuances of management.

The concept of strategic management

Based on the organization's development plan, a management model is created that should answer the following questions:

• What is the current state of the enterprise?
• What should be his state after a certain time?
• What are the means to achieve what you want?

In each case, the basis of the strategy will be the personnel reserve. The reserve of managerial personnel, from the point of view of strategic management, is primarily people capable of change, self-learning and making non-standard decisions. This applies to all levels of government and especially the upper echelon, as change starts from the top.

Technologically, strategic management involves the implementation of specific actions that can be aimed at operational control, modernization, restructuring in accordance with changing environmental conditions. Unlike strategic planning in the management system, the control function is performed already at the project implementation stage and can take into account the finished results of the work done with estimates. In addition, strategic decisions are made on the basis of external factors, notdirectly related to the quality of implementation of the plan. Given the characteristics of market development and external factors, management can focus on proactive or reactive decisions.

Principles of strategic management

An effective management model should be based on the following conceptual elements of management:

• Clearly formulated goals. This is not about the general goals of the enterprise, but directly about the tasks of the personnel reserve. The management pool can only effectively achieve higher goals if it also has a clear set of functions.
• Concentration. All departments of the enterprise must be subordinated to the achievement of the main goals. In a broad sense, this means working on the parameters of the organization that will ultimately drive the process to achieve the greatest results.
• Maneuverability. The enterprise must have a sufficient supply of various kinds of resources that will allow adjustments to be made in accordance with changing conditions with minimal losses.
• Coordination. A responsible leadership function that is ready to make timely decisions and build a strategy based on the rational use of resources.

Conclusion

Effective management, coupled with a carefully thought-out business model, allows modern companies not only to stay afloat, but also successfully compete with other market participants. A key role in achieving high resultsproduction activity is played by strategic planning and strategic enterprise management. Moreover, in both cases, the tasks can converge and diverge depending on the goals set and methods for achieving them. The fundamental differences between the strategies of planning and management are in relation to the period of direct implementation of the project. In one situation, we are talking about a detailed study and formalization of a design solution, and in the second, about its direct support throughout the life cycle.