What is intended to develop next is to formulate a set of concepts of what Business Planning is in order to then be able to enter Strategic Planning.
Planning is the process of setting goals and choosing the means to achieve those goals.
strategic-planning-2Planning is foreseeing and deciding today the actions that can take us from the present to a desirable future. It is not about making predictions about the future but about making the pertinent decisions so that that future occurs.
Strategic planning must be understood as a participatory process, which will not resolve all uncertainties, but which will allow to draw a line of purposes to act accordingly. The conviction that the desired future is possible allows the construction of a community of interests among all those involved in the change process, which turns out to be a basic requirement to achieve the proposed goals.
The planning process understood in this way must involve the majority of the members of an organization, since its legitimacy and the degree of adhesion that it attracts in the group of actors will largely depend on the level of participation with which it is implemented.
Planning we achieve the following:
- Establish the direction to be followed by the company and its business units Examine, analyze and discuss the different possible alternatives Planning facilitates subsequent decision-making It involves greater benefits and fewer risks
Decision making
It is the process of identifying and selecting a course of action to solve a specific problem.
RATIONAL MODEL TO MAKE DECISIONS
This model is very useful for making unscheduled decisions. No approach, used by a manager, is sure to guarantee the right decision. But those managers who resort to an intelligent systematic rational model are much more likely to provide high-quality solutions.
A.- Investigate the situation.
- Definition of the problem Diagnosing the causes Identifying the objectives of the decision. B.- Develop alternatives. Brainstorming.
C.- Evaluate the alternatives and choose the best among those available.
D.- Implement the decision and monitor it.
TYPES OF PLANNING
In general, companies are managed according to two types of plans:
STRATEGIC PLANNING: They are designed by senior managers and define the general goals of the company, generally they are long-term (time horizon). These plans affect a wide range of company activities (scope).
OPERATIONAL PLANNING: They contain the details to put into practice, or implement, the strategic plans in daily activities, they are short-term (time horizon). These plans have a narrower and more limited scope (scope).
The following graph, in the lower part, shows the difference that exists between strategic plans and operational plans, the SA company is taken as an example, whose strategic plan refers to the “Way in which the company will position its products and services before your competitors ”. It is important that both the strategic plan and the operating plan are designed with the purpose of achieving business goals.
STAGES IN THE TRADITIONAL PLANNING PROCESS
The process to formulate business plans is made up of six steps, which are different from the strategic planning process, which are detailed below:
Evaluate the present conditions. This assessment includes the company's resources, market trends, economic indicators, competitive factors, and other factors. This evaluation takes a panoramic view of the internal and external environments.
Determine objectives and goals: Establish general and specific objectives and goals prior to the situational analysis of the company.
Establish an action plan: The action plan are prescribed means of achieving the objectives and goals. These courses of action are made up of the strategies and tactics that must be developed to achieve the objectives.
Allocate resources: It is the budgeting of resources for each plan
Execution: It has to do with the delegation of tasks, assignment of people and responsibilities to carry out a plan.
Execution control: The company has to direct the activities of the work in progress to ensure that the objectives are met and in some cases they are readjusted to meet them.
STRATEGIC PLANNING
It is the process by which those who make decisions in a company obtain, process and analyze relevant internal and external information in order to evaluate the present situation of the company, as well as its level of competitiveness in order to anticipate and decide on the direction of the company into the future.
The concept of strategic planning refers mainly to the ability to observe and anticipate in the face of challenges and opportunities that are generated, both from the conditions external to an organization, and from its internal reality. As both sources of change are dynamic, this process is also dynamic.
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