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Importance of Strategic Planning in Business

Strategic planning refers to the process that provides guidance and direction for an organization's operations by determining its objectives, goals, and how to accomplish them. It is the first activity management undertakes when making important decisions that will impact the company's future. While some see planning as a waste of time, it is an important management function because it forces consideration of where the company is and where it wants to be, coordinates efforts toward common goals, and allows for monitoring results. Good planning also positions a company to respond quickly to changes and is a key factor in management's competence and ability to control the long-term future of the company.

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6 views1 page

Importance of Strategic Planning in Business

Strategic planning refers to the process that provides guidance and direction for an organization's operations by determining its objectives, goals, and how to accomplish them. It is the first activity management undertakes when making important decisions that will impact the company's future. While some see planning as a waste of time, it is an important management function because it forces consideration of where the company is and where it wants to be, coordinates efforts toward common goals, and allows for monitoring results. Good planning also positions a company to respond quickly to changes and is a key factor in management's competence and ability to control the long-term future of the company.

Uploaded by

Lama Al Hout
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

B.1.

Strategic Planning
Planning in general refers to the process that provides guidance and
direction regarding what an organiza- tion needs to do throughout its
operations. It determines the answers to the “who, what, when,
where, and how” questions of a business operation. Planning is the
first activity management must undertake when creating yearly
budgets and making other critical decisions that will affect the
company’s future. A com- pany’s plan serves as its guide or compass
for the activities and decisions made by individuals throughout the
entire organization. The planning process not only defines the
company’s objectives and goals, it sets the stage for prioritizing how to
develop, communicate and carry out accomplishing them.

Planning is usually not a popular activity. Many people think of


planning as a waste of time, because it takes time away from day-to-
day activities. Other people believe that the environment the company
oper- ates in changes too quickly for a plan to be useful, since soon
the situation will change, anyway. However, planning is an important
management function for several reasons.

The process of planning can be as important as the resulting plan,


because the process forces management to think about where the
company is and where the company wants to be. A plan brings about
better coordination of company efforts, since everyone is working
toward the same goals. And it provides clear performance standards,
enabling better monitoring and control of results. Furthermore, good
planning puts the company in a better position to anticipate and
respond quickly to sudden changes in its environment. And finally, one
of the primary success factors in a company is management’s
competence in planning and controlling the firm’s activities.
Management’s responsibility is to plan and control the long-range
destiny of the company through decisions that either create or seize a
positive opportunity or escape a decline.

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