Share on Facebook As a small-business owner, you will use goal-setting in the beginning to write a start-up business plan.
The benefits of strategic planning at the corporate level include - consensus on key issues and strategies to address them, commitment to, and capacity for, implementing the strategies, clearer communication of priorities, improved cooperation among those pursuing strategic objectives, and more effective long term business plan control of strategic initiatives.
I believe that all of these benefits of planning can contribute to enhancement of organizational performance over the long term. Does strategic planning improve corporate performance? The ultimate benefit of strategic planning would be that it contributes, in some measurable way, to improving overall organizational performance.
However, there is little agreement on the extent of any such contribution. Some research looks at the relationship between strategic planning and organizational performance. Measurement and conceptual difficulties make this a challenging endeavor.
For example, varying approaches to selecting indicators of corporate performance make comparison over time and across enterprises and industries difficult. Strategic planning may variously be confused with operational planning, business planning and budgeting.
Some people define strategic planning on the time span of the decisions. A definition of corporate strategic planning Here I define strategic planning as follows - Strategic planning is a systematic, formally documented process for deciding the handful of key decisions that an organization, viewed as a corporate whole, must get right in order to thrive over the next few years.
Decisions that we can call strategic decisions are those likely to affect organizational performance for some years. So trying to find a link between strategic planning and performance over periods of say less than three to five years is unlikely to be helpful.
The contribution of strategic planning to organizational performance A few early studies suggested a direct positive relationship between formal corporate strategic planning, and improved organizational outcomes.
Some others were inconclusive, and a few seemed to suggest a negative relationship. On balance however, it appears that at least the formal planning process surfaces relevant issues, and strategic options, that would not otherwise be considered, and this may be one of the benefits of corporate strategic planning.
Making sure that top managers are paying attention to the right things is a valuable outcome of the process. A few meta-analyses address the apparent inconsistency in the research results. These confirm the difficulties associated with varied approaches to defining strategic planning, and the lack of agreement on performance indicators.
A useful meta-analysis, or review of research, on the link between strategic planning and corporate performance is J. Armstrong examined the details of the strategic planning process, the setting of firm level objectives, and strategy implementation.
He concluded that, despite difficulties in making the comparisons, corporate strategic planning does benefit businesses in terms of increasing the probability of improved performance. Studies in some other sectors and for smaller businesses confirm these findings.
The benefits of strategic planning - magic bullet or waste of time?
Still a few see strategic planning as an empty or symbolic ritual, that makes little or no contribution to corporate performance. Others see strategic planning as a magic bullet that almost guarantees improved performance.
Obviously improved performance is a desirable result. However, employing formal strategic planning does not guarantee improved results. This may make us more confident to recommend corporate strategic planning, as an aid to improving organizational performance; however, we must accept that the situation is so inherently complex that we cannot guarantee that strategic planning always improves performance.
I simply assert that one of the potential benefits of corporate planning is improved performance of the organization. It contributes to improved performance by enabling and enhancing a range of other things in the organization that contribute to performance improvements.The long term planning will only work when your short term plan works.
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The strategic plan will be a guiding document that is reviewed and updated regularly. How To Set Long-Term Goals in Business Business Success how to set goals, long term goals, strategic planning process Your ability to set long-term goals and constantly be thinking about the future of your business has an inordinate impact on the success and profitability of your enterprise.
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