What is Strategic Planning?
Strategic planning is a process in which priorities are set for a course of action, including specification of resources required for attainment of organizational goals. As we know that a strategy is vital for the future success of an organization, strategic planning process helps to create an organization’s strategy.
Strategic planning is a process of defining an organization’s strategy
Different Models of Strategic Planning Process
Different models can be used while developing a strategy, none model can be considered to be the best – it depends on the organization and its needs for the approach to the strategic planning.
1- The Rational Model
It is a step by step approach which requires an organization to analyse its existing position, develop possible strategies and finally select the most appropriate one. The steps in this model are:
- Set mission
- Establish objectives
- Internal, external and stakeholder’s appraisal
- Generate strategic options
- Selection of most appropriate strategy
- Plan and implementation
- Review and control
This method encourages creativity among the staff and helps to identify key risks facing an organization. However, it has issues like difficulties in forecasting future, the short-term pressure of performance measure, costly and bounded rationality.
2- The Emergent Model
Henry Mintzberg, a renowned author of management, takes a different approach for defining a strategy. He argues that rational model of strategic planning is slow and quickly becomes outdated due to continuous change in environment. According to him, strategy tends to evolve rather than result from the rational process.
For example,You construct a building for rent purpose but after completion, high price offer leads you to sell at a high profit.
Charles E. Lindblom, one of the developers of the theory of incrementalism, states that rational model of strategic process is not used in real world because of following reasons
- Managers do not evaluate all the possible options while strategic planning
- Strategic planning involves implementation of the change in small steps.
4- Freewheeling Opportunism
Freewheeling opportunist does not like to plan for future, they prefer to grab an opportunity as it arises. These people are often risk takers.