The Relationship between Strategic Planning and Performance

Introduction

Over time the model and practice of strategic planning has been accepted global and within sectors because of its alleged support to organizational effectiveness. Today organizations from both the private and public sectors have taken the exercise of strategic planning completely as a tool that can be utilized to fast track their performances. Strategic planning is possibly vital element in the behavior of strategic management. Strategic planning possesses potential benefits and inherent values that eventually translate into improved firm efficiency. Hence, it is a tool facilitating improved firm performance (Greenley, 1986). Improved performance reported via strategic planning However, their emphasis was on the formality of planning rather than the correlation between planning and firm success as opposed to non-planners (Adegbite & Fubara, 1986). It is noted that the past studies did not pay attention to the individual steps that constitute the process of strategic planning. It is believed that the way and extent to which each of the strategic planning steps is addressed could have implications for the achievement of the company's expected goals.

The concept of strategic planning

Various authors and scholars clarified the strategic planning in separate but complementary ways. Strategic planning is strategy management, an empirical activity and is geared towards making effective strategic decisions (Drucker, 1954). Conceptualizes strategic planning as a method of better matching the goods or technologies of a business with its increasingly volatile markets (Ansoff, 1970). Strategic planning as the company's systematic and more or less formalized attempt to develop basic business objectives, priorities, policies and strategies (Steiner, 1979). Planning as a deliberate, organized process during which decisions are made on the goals and activities which a person, community, work unit or organization will undertake in the future. The strategic planning process consists of three main elements that help to turn the vision or purpose of an organization into tangible feasible. These are the strategic analysis, strategic choice and strategic implementation.

Link between strategic planning and performance

It is conceptualized that companies that have adopted strategic planning effectively report improved results compared with those that have not ( Arasa & K'Obonyo, 2012). It is expected that carrying out the different steps in the strategic planning process will facilitate the realization of organizational effectiveness. By identifying the mission and objectives of a business, strategic planning gives direction to the organization and improves the coordination and control of organizational activities.

Figure 1: Link between strategic planning and organization performance

Source:  Arasa & K'Obonyo ( 2012)

Members of the organization know where the organization is heading and where their major efforts should be expended. It guides the meaning of the company's operations, the objectives it seeks and the means it will use to achieve those goals. Notice that the strategy of a business offers a core objective and direction for the organization's operations and the people who work therein. Strategic planning makes it possible for a company to be more constructive than reactive in shaping its own future, implementing and controlling (instead of only reacting to) actions and thereby maintaining influence over its destiny. This helps to illustrate places that need attention Or Innovation. The method of strategic planning figures a company’s strategy choice. This identifies and clarifies potential opportunities and challenges and offers a basis for business-wide decision-making ( Arasa & K'Obonyo, 2012). It helps organizations to strategize better by using a more systematic, logical and rational approach to strategic choices.

Conclusion

As the findings of the study show, every phase in the strategic planning process is critical. When the market or intent of the organization is not clear, how do the employees realize they are on the right path? Or if the market environment has not been objectively evaluated how does the company recognize its internal competencies or business opportunities from which effective approaches are built to promote a match and success. This study focused mainly on the relation between the strategic and organizational planning processes Powerful results. his study mainly focused on the connection between the strategic planning process and organizational performance. It would be of interest to investigate the role of intervening variables in translating the strategic planning intentions into reality.

References

Arasa, R. & K'Obonyo, P., 2012. The Relationship between Strategic Planning and Firm Performance. International Journal of Humanities and Social Science, pp. 201-207.

Adegbite, O. & Fubara, B., 1986. Corporate Planning in Nigeria. Long Range Planning, 19(2), pp. 125-132.

Ansoff, H. I., 1970. Does Planning pay?. Long Range Planning, 3(2), pp. 2-7.

Drucker, P., 1954. The Practice of Management.. New York City: Harper Row.PP 298-302

Greenley, G., 1986. Does Strategic Planning Improve Company Performance?. Long Range Planning, 19(2), pp. 101-109.

Steiner, G. A., 1979. Strategic Planning. New York: Free Press.PP.113-134