The need to use the principles of strategic planning and management was formulated in the middle of the 20th century, when managers began to pay more attention to external factors of enterprise development. From this moment, the company ceased to be considered as a closed system, the effectiveness of which depends entirely on internal premises. A novelty of strategic planning and strategic management of closed forms of company management has been the emphasis on situational behavior. This concept opened up wider opportunities for preventing external threats and developing mechanisms of protection against risks in the market environment.
Management Strategy
From the point of view of enterprise planning and management, a strategy at a basic level should be understood as a general direction of development or determining a course of activity. As we approach the disclosure of the essence of this concept, the differences between planning and management will become more evident. Therefore, to begin with, it is worth considering the strategy as something in common that determines the main goal of the company. Although such a representation may have different interpretations. For example, for the management of a particular company, a strategy is a program of actions aimed at achieving certain goals, taking into account specific conditions, resources and capabilities. But also strategy can be understood as a general business concept with a clear set of management principles universally suitable for all market participants.
One way or another, in the current conditions of competition, no enterprise can be effective without a formulated action plan and development tactics. What does the process of developing a business strategy include? This is also a series of organizational and managerial actions, the purpose of which is to create a viable model for the development of the enterprise or the concept of its existence in the market. If we talk about the general rules for the development of planning models, then their main types will include the following:
- The rules of relations between the company and the external environment, which determine the characteristics of the products, logistics, competitive advantages, etc. In accordance with such standards, in particular, the company's product and market strategic planning is implemented in the context of its development.
- Rules for everyday tasks. They are also called operational or manufacturing techniques.
- Rules for evaluating the results of the enterprise, thanks to which the management can make the necessary corrections and amendments.
- Rules establishing relations within the company. They form an organizational or corporate concept.
For the strategic plan, such characteristics as clarity, clarity and unambiguity are important, but do not consider the techniques of developing business models as a dry and mathematically accurate process. Especially now in the field of strategic planning there are many concepts in which not only conscious social, but also unconscious actions play a significant role. The principles of intuitive planning with the rejection of a formalized approach provide more opportunities for the disclosure of unformulated creative aspects of activity, which is also an advantage that reveals new qualities of the enterprise.
Strategic Vision and Mission
Vision in this case means a certain image of the future of the company in the long term of its development. To build an ideal figurative model, two elements will be important: an understanding of the organization’s purpose and an emotional appeal for employees, which motivates them to strive for the implementation of the task. However, the essence of strategic vision comes from a combination of components, among which are also intellectual and cognitive elements. Fundamental changes in the work of the company always require the definition of new ideas about a more advanced organizational model. In this vein, a less effective concept of enterprise development is being replaced by a more promising vision with the desired reality.
The vision of the future also comes into contact with the concept of enterprise mission in the eyes of the public. Mission in strategic planning and strategic management is formulated as the main goal of the organization, in one form or another reflecting its mission. As a rule, this is a statement of the management of the company, which affirms the intention, significant for society. But the addressee is not only the company and the target client audience, but also the employees themselves. Already in the mission declaration itself should contain inspirational and motivating accents. The main task of the formulated mission is to ensure the harmony of the external and internal environment as the organization moves towards strategic goals. This is achieved through the following functions:
- Increasing employee motivation.
- Support for corporate values, which can be expressed through encouraging employees to learn new skills and knowledge.
- Determining the direction of development of the enterprise, taking into account new technologies and market platforms.
- Ensuring the flexibility of the organization in terms of the concept of its purpose. Flexibility refers to the ability to change individual parameters or characteristics of a selected course in the context of changing conditions.
The concept of strategic planning
The combination of the principles of business planning and strategy allows us to formulate the vision and mission of the enterprise not in an abstract, but in a technological form. In a broad sense, planning technology is the development of methods and techniques by which company goals and means of achieving them are developed. That is, it is not just the ability of the management or project team to clearly formulate the mission and anticipate future difficulties at the stage of development of the organization. To a greater extent, the technology of strategic planning reflects the principles in accordance with which the model of the future company is being developed.
- The principle of unity. The structure of interaction of the totality of corporate elements, each of which is an entity and performs a specific task, is approved. At the same time, despite the difference in functions, the elements are guided by the same general goal in accordance with the mission.
- The participation of employees in the planning process. A necessary condition for successful planning, due to which a more elaborate technically and close to reality model is implemented.
- Continuity. The process of strategic planning and management of an organization does not stop within a single work cycle or stage of development. It is continuous, but this does not mean its immutability. It is in the transitions between cycles and stages that there may be a need to review or supplement the tasks and methods for solving them.
- Precision planning. For all the figurativeness and abstractness of some elements, it is desirable to strive to detail and concretize the model. At the stages of the implementation of the plan, this will reduce many costs and optimize work processes in the organization of the enterprise structure.
Classification of planning by time orientation
The principles of strategy and planning in most cases, by default, are oriented to the future, taking into account the promising possibilities of applying new technologies. According to this scheme, preactive planning works, in which a bet is made on the benefits of future changes. In this case, it is difficult to calculate the conditions of strategic planning with the prospect, since you have to guess the probabilities of changes in the market. Therefore, more often than not, proactive models do not set the goal of generating new profits, but of the survival and stable growth of the enterprise.
Often, planning is limited to the present time, where it is possible to fully correlate the tasks of the organization and the conditions for achieving the goals. Such models are called inactive. Their distinguishing feature is satisfaction with the present. To change the natural development of the enterprise according to this scheme, minimal resources are sufficient, which is caused by the possibility of more accurate forecasting. But even in this case, the competition is won by participants with certain advantages: the ability to understand the essence of what is happening, the number of connections, the presence of experience, etc.
The past can also be attractive for strategic planning. It makes it possible to see the problem of development not in a certain segment, but in its entire life cycle from the moment of its inception with the prerequisites to the peak of development at the current moment. As for the future, strategic planning and strategic management of this type (reactive) denies possible improvements in the future. Unlike inactive, in this case, a sufficiently high margin of organizational strength of the enterprise is ensured against the background of the negative influence of external factors. A disadvantage of a reactive development strategy is the exclusion of the probability of a “quick” breakthrough in the market under the same uncertainty.
Classification of planning by duration
The time horizon of planning can also be different depending on the tasks that need to be implemented at a particular stage. In particular, the following time periods are distinguished:
- 10-25 years old. Long-term planning (for the future), in which the emphasis is on achieving large goals, taking into account complex forecasts for the future. This type of planning has two fundamental differences: combining several strategies in one movement course and introducing innovations. In the framework of long-term planning, general general goals are set that reflect the industry objectives of the enterprise.
- 3-5 years. Mid-term planning. Smaller, but more detailed, in which the emphasis is on the distribution function. That is, in this case, we can talk about long-term planning at the enterprise, but on a smaller scale. The medium-term strategy object may mean production capacities, financial resources, technologies, products, investments, enterprise structure, human resources, etc.
- 1 year or less. Short-term (annual) planning. This is a form of current plans, logistics tasks or operational and production goals, which are part of a short-term agreement. Such planning may involve the conclusion of short contracts with suppliers and other partners.
As you can see, the planning horizon in many respects depends on the specific goals of the enterprise, although they may cover different time periods. At the same time, it is the strategic vision of the future enterprise to a greater extent that corresponds to long-term planning, within the framework of which investment projects, modernization, expansion of capacities, etc. are organized. It is another matter that long-term plans for many years may include small short-term and medium-term projects with local tasks, aimed at achieving general goals.
Company plan development
The development tactics of any modern enterprise are based on tasks and goals, which in turn are based on a formulated mission. Factors such as profitability, sales volumes, innovative activities, image component, potential risks, etc. should be used as initial data for the plan. Next, the issue of selecting a methodology will be used to develop a marketing plan taking into account the goals and stated interests enterprises. In the theoretical and methodological system of strategic planning there are several approaches:
- Functional. The elements of marketing and production optimization are combined, resulting in a strategy for effective competition from the basic source resources. Actually, the immediate tasks of the enterprise.
- Corporate. A plan is being developed for the effective organization of work within the company.
- Business. Development of a tactical and strategic plan that will allow the company to survive in harsh market conditions.
- Operating. Narrow and even point or situational planning for specific departments of the enterprise in short-term conditions.
Creating a plan is not complete without a feasibility study of the business, which includes a report on the financial structure of the enterprise. It is based on the analysis and assessment of the economic feasibility of implementing a specific project of the company. The main principle for developing this report is to compare the costs and results of the enterprise.
Strategic Planning Tools
Modern large companies use an extensive list of tools to optimize work processes to develop planning methods. One of the most effective instrumental groups of this type is SWOT analysis. On its basis, promising models of strategic positioning are based, but it is difficult to call them universal. At least each niche requires its own version of SWOT-tools with one or another list of adaptation systems. For example, financial planning in the organization's activity involves the assessment of external and internal factors. A wide array of input data will allow the analytical scheme to determine the current state of the organization, as well as its optimal model in the overall development structure. The technology of SWOT analysis, in particular, works with general, intra-industry and internal factors of company activity, reflecting not only production and market, but also sociocultural, political, legal and even stylistic nuances of management.
Concept of strategic management
Based on the organization’s development plan, a management model is created that should answer the following questions:
- What is the current state of the enterprise?
- What should be his condition after a certain time?
- What are the means to achieve the desired?
In each case, the basis of the strategy will be the personnel reserve. The reserve of managerial personnel, from the point of view of strategic management, is, first of all, people who are capable of changes, self-training and making non-standard decisions. This applies to all levels of management, and especially the upper echelon, as changes begin at the top.
Technologically strategic management involves the implementation of specific actions that can be aimed at operational control, modernization, and restructuring in accordance with changing environmental conditions. Unlike strategic planning in the management system, the control function is already performed at the project implementation stage and can take into account the finished results of the work done with the estimates. In addition, strategic decisions are made on the basis of external factors that are not directly related to the quality of the plan. Given market development characteristics and external factors, management can focus on proactive or responsive decisions.
Principles of Strategic Management
An efficiently functioning management model should be based on the following conceptual elements of management:
- Clearly defined goals. This is not about the general goals of the enterprise, but directly about the tasks of the personnel reserve. The reserve of managerial personnel can effectively achieve higher goals only if it also has a clear set of functions.
- Concentration. All units of the enterprise must be subordinate to the achievement of the main goals. In a broad sense, this means working on the parameters of the organization, which ultimately will stimulate the process of achieving the greatest results.
- Maneuverability. The company should have an adequate supply of various resources that will allow you to make adjustments in accordance with changing conditions with minimal losses.
- Coordination. The function of responsible leadership, which is ready for timely decisions and building strategies based on the rational use of resources.
Conclusion
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