Strategic Planning And Its Impact On Organizational Performance
Planning is very important in any managerial function. If planning is done correctly, it sets the direction for organizing, controlling, functioning, or leading correctly. Planning can be described as the process of selecting an organization’s mission, vision, and goals for long term and short term. It can also be used to choose strategies and methods to achieve specific goals. Planning should consist of identifying future alternatives, predicting and avoiding potential risks, formulating course of actions for strategies and processes, and also understanding the risks related with several options. This gives an organization a better chance of attaining its goals.
In some organisations such as Diamond bank plc, the strategic planning process includes contingency planning which helps the bank prepare for unexpected and rapid changes in the environment which can be positive or negative. Strategic planning can be analyzed as the strategy of using organized measures and strict research to develop, facilitate and control organizational expectations.
Strategic planning is a process by which we can predict the future and come up with necessary methods and strategies to achieve that future. Strategic planning professionals disguise their work in many scientific terminology that are designed to enhance their work create client reliance. Mainly, scientific methods are neither complex not scientific. They can be used by organizations to create an effective planning program.
Strategic planning consists of a number of underlying processes that are formulated to create a solution to a more favorable result for an organization. It is different from traditional planning such that it is more guarding and relies on the move of event to drive the organization’s processes. Strategic planning provides complete direction for specific industries such as project, human resources, marketing and financial focuses. Strategic planning is more productive in an organization when there is agreement between works and technology in an organization.
One purpose of strategic planning is to improve the process of adaptive thinking, and how to maintain alignment in firm environment. Firms are gaining more advantages from strategic planning also in the area of integration and control. Both small and large organizations can benefit from strategic planning in different ways, from critical thinking, to making major decisions, and the likes.
According to Evered, he said that the various uses of strategic planning varies from major ones to narrow ones. Major uses consist of, defining of processes and goals, while narrow ones include the means of achieving such goals and processes. Companies have to determine what aspects of their business needs strategic planning, whether in making plans, or achieving the plans. The question of strategic planning now boils down to the inclusion or exclusion of goal and processes. Strategic planning helps organizations to determine the best future for them, and the best way to reach such destination, and achieve the goals.
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Most times, an organization’s strategic specialist already knows what the strategic plan will entail and how much will go into it. The development of effective strategic planning will help to analyze the organization’s plans and ensures that all key processes are in place. A strategic planning process starts with an estimation of the current economic situation. This entails analyzing external factors that can affect the organization’s performance.
The company can focus on local, national, and global economic projections to help them make the best strategic plan. The strategic planning process cannot begin with first analyzing these factors. It can be said that the amount of strategic planning an organization does can greatly affect it’s financial performance. The intensity in which organizations engage in strategic planning process has a direct positive impact on their financial performance.
It is always necessary for organizations to think strategically about what is going on in their business and how it affects the economy. There is a direct relationship between strategic planning and financial performances of an organization. The context of strategic planning includes the needs of an organization that ensures its proper operations and how it conforms to the marketplace. For instance, market condition changes from time to time, such that the uniqueness of the market condition can greatly affect the need for the products and services of the organization.
The context of strategic planning demands that there are considerations for the various changes that take place in the market in order to enhance the development of the organization. The development of an organization is based on its capacity to address the market’s current trends, expectations, and preferences of the customers. This implies that strategic planning are often carried out to develop new policies, programs, and procedures that an organization can follow to maximize its full performance.
Strategic planning helps managers to fully maximize the performance of an organization. This, strategic planning can be said to be a managerial process or tool that develops new policies, guidelines, rules and regulations that controls the activities of an organization, and the impact on the organization in the long run.
The context of strategic planning can also be based on the abilities and constraints of different organizations. Organization managers need to evaluate the capabilities of the employees in an organization, because the abilities of the employees directly influence the organization’s capacity in achieving the strategic plan. Strategic planning involves the knowledge, skills, and abilities of the workers of an organization. Business owners need to evaluate their characteristics to ensure that the formulated strategic plan will be able to contribute to the development of the organization’s interest.
Strategic planning and Organizational performance
Strategic planning directly affects the organizational performance. The level of any organization’s performance is directly dependent on the level of performance of the managers. The ability of the managers to evaluate the issues, needs, and concerns of the organization affects the ability of the organization to address its own means, since managers are the ones who give the direction that an organization will go. The ability of the managers to use strategic planning to get the best strategic plans impacts the ability of the organization to achieve its goals and objectives. It also improves the growth and development of the organization to satisfaction.
The level of performance of individuals in the organization also affects the ability to achieve the organization’s goals. The human resource of an organization lays out the abilities and capacities of the organization to improve and be able to meet its needs, and concerns. This, it is essential that managers involve the human resource in their considerations when doing strategic planning. Strategic planning should be able to bring out the best productivity levels of every individual in the organization. The coordination of strategic planning process and human resource in an organization impacts the ability of the organization to perform according to standard to fulfil its goals and objectives.
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