Strategic Business Planning: Importance and Stages
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What is Planning?
Planning involves looking to the future and deciding in advance what you want to achieve and where you want to go. As organizations operate in changing and uncertain environments, planning seeks to adapt to these changes. Planning provides a coordinated effort and guides the work of subordinates and managers.
Importance of Planning
- Promotes company development.
- Minimizes risks.
- Maximizes the use of resources and time.
- Provides standards that facilitate and enable control. Administrative functions are critical because planning precedes others, such as organization, direction, and control.
Formal Stages of Strategic Planning
- Identify current strategies.
- Identification of potential strategic targets.
- Selection of strategic goals.
- Evaluation and implementation of strategies.
Characteristics of Planning
- Planning must be flexible, allowing adaptation to new circumstances, for example, by using corrective plans.
- It requires uniform measurement systems in its application.
- It must utilize the maximum available resources of all kinds (human, financial, material) in its preparation.
- Care must be taken in structuring a plan; every part holds relative importance and requires balance.
- The plan should be formulated in an understandable language, detailing all involved aspects.
Planning Stages
- Determine the Objective: Know exactly what you want to achieve or define your problem.
- Determine Activities to be Carried Out: With a clearly defined goal, draw up a list of necessary activities. Verify if all activities are considered, if any are missing, and check the correlation between these activities and other existing plans.
- Sort the Activities: Knowing the purpose and necessary activities, proceed to classify them based on their homology (activities of the same type).
- Formulate Assumptions (Premises): Premises are the foundation upon which plans are designed. They represent our truths or starting points, according to which ideas are developed.
- Formulate Alternative Plans: Based on the premises, formulate different ways to achieve the same purpose.
- Choose the Plan: Considering the pros and cons of each alternative plan and relating them to reality, choose the most convenient one. It is possible that none are chosen.