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Introduction
Strategic planning is critical to the success of any business. Unlike classical entrepreneurial planning, strategic diversity includes vision, mission, and thinking outside the box. This process allows determining the current position of the organization, its success, strengths, and weaknesses, as well as optimal development ways. At the same time, the basis of business management is only just the development of a tactical path but also its adaptation to the specifics of the companys activities. A strategy is aimed at strengthening the market position of the organization and ensuring the coordination of activities with the ability to successfully compete in the market, attract customers, and achieve the goals set. For my municipality, Saint Johns County, strategic planning is a crucial concept that affects not only revenues (taxes), but also market position because the abilities to meet the expectations of the citizens and create economic demand are valuable factors in our segment. For example, St Johns County School district has been #1 in the State of Florida in Public Education since 2010 (www.stjohns.k12.fl.us). In addition, St Johns County has been the Healthiest population in the State since 2011. My municipality set about to achieve a long-term strategic plan in 2012, which I helped form, that included education, economic development, health, public safety, and infrastructure as its priorities. In developing that, we were concerned with both what needed to be changed for successful change and how the organization could function in a specific context with an appropriate base to demonstrate sustainable growth and achieve recognition.
This plan was aimed at identifying the specific features of strategic planning and its main elements within the framework of both the public sector and the construction industry as we knew that growth was inevitable. This process was associated with a number of positive changes and a convenient mechanism to shape a scheme for disciplined change within the team and ensure sustainable performance from all perspectives, including legislative, executive, judicial, and others. A viable and inclusive strategic plan is at the root of our land development code, and when planning for growth, this type of plan is highly valued and designed to benefit not only our organization but also our citizens.
History of Strategic Management and Theoretical Concepts
Strategic management, as a broad concept that appeared in the 20th century, took a long time to acquire its modern form. This practice of controlling and managing resources can be assessed on the example of the American market. The rapid development of the US economy after World War II, when the demand for products was great and economic development was natural, was replaced by the post-industrial era, and this period continues to this day (Stiglitz, 2016). According to Kapp (2016), the characteristic features of the post-industrial era were the acceleration of the growth rates of scientific and technological progress and the new level of well-being achieved by society. An increase in the share of services in GDP, a high degree of differentiation of products, increased attention to negative forms of progress, such as environmental pollution, inflation, monopoly, consumer manipulation, an increase in the factor of individual satisfaction from the work performed, and a high pace of economic processes generated a change in the structure of the economy and its ideology. In parallel with these trends, the management thought also developed. The economic situation became more complicated, and in this regard, new approaches to managing organizations were required.
Depending on the priority of the approaches used and the reaction to external changes in the development of the management thought, Kushner (2021) considers the following stages:
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Budgetary and financial control.
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Extrapolation-based management.
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Anticipating changes.
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Management based on flexible emergency solutions.
The first three phases lasted most of the 20th century; however, beginning in the 1980s, flexible emergency management took precedence over other practices. This principle assumed that many important tasks arose rapidly, and this was impossible to foresee all of them immediately (Kushner, 2021). As a result, companies had to work in such an environment and introduce new principles of management. One can highlight the following distinctive features of this control system:
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The focus is on the implementation of strategic decisions and the integration of management actions.
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The decentralization and democratization of governance.
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The growing importance of intuition and the strengthening of the qualitative approach in assessments.
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The consideration of an enterprise as a subject of active influence on the environment.
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The use of strategies as the main tools for managing enterprise development.
The third stage of management development is also called strategic planning, and the fourth strategic management in real time. The difference between the concepts of strategic planning and long-term planning lies in the different interpretations of the future. Based on long-term planning, the future is determined based on the extrapolation of past trends (Stiglitz, 2016). Strategic planning does not consider the future to be explored by extrapolation and implies taking the necessary steps to change the operating environment.
In addition, in strategic planning, in comparison with the long-term variant, the space of the companys activities becomes more voluminous. As Stiglitz (2016) notes, it includes both the main elements of the internal environment of an economic organization and external aspects social and political factors, tastes and needs of buyers, actions of competitors, and some other criteria. Moreover, the long-term goals of the firm in strategic planning cease to be a simple reflection of the conditions of current activities. They turn out to be the result of the analysis of changes in the external and internal environment of the firm. The difference between strategic and long-term planning also implies the criterion of variability, which means the development of alternative versions of the companys future development.
The following factors have become the prerequisites that determine the relevance of the development of strategic management:
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Integration processes that have led to the formation of financial and industrial groups.
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Business globalization. Global firms see the world as a whole in which national differences and preferences are erased, and consumption is standardized. The onslaught of global firms can only be resisted by analogous methods by developing a strategy in a competitive environment.
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The role of the top echelon of management has increased, while the set of management skills developed before World War II has become less consistent with the conditions for solving emerging problems.
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The instability of the external environment has grown, which, in turn, has increased the likelihood of sudden changes and their unpredictability.
All these factors have led to the fact that control over business processes and resource bases has acquired the form that many modern companies adhere to and promote through their development plans. Nevertheless, many concepts and approaches to strategic management were formulated long before the globalization of the market and other phenomena characteristic of todays entrepreneurship. One of these concepts is Henri Fayols theory that includes the principles of effective strategic management developed as the mechanisms of effective control and resource allocation.
Henry Fayols Principles of Strategic Management
Henry Fayol was a management theorist and practitioner, the founder of the administrative school of management. According to Edwards (2018), in his concept, the theorist formulated 14 principles of management, which have retained their value to this day and are often referred to when discussing the issues of strategic management. The main focus of Fayols principles was on leaders and those who sought to show their leadership inclinations. These 14 rules are critical factors to take into account when applying to a strategic type of business control.
Labor Division
The main goal of labor division is to concentrate an employee on fewer goals and objectives. By directing attention and all ones strengths, a specialist works more efficiently and can control ones time and energy, thereby achieving productivity without experiencing a serious burden. This targeted form of work meets the principle of strategic management and contributes to resolving potential conflicts based on the workload. When taking two teams, with and without labor division, all other things being equal, the former will perform a larger volume of tasks and will do it better than the latter.
Authority and Responsibility
The one who is endowed with power should be responsible for the decisions made and the orders given. A leader or manager is a person in charge and has the right to coordinate the work process, but the degree of responsibility differs among managers and performers. The higher the rank and authority of an employee, the higher the likelihood that his or her supervisory liabilities are strict.
Discipline
Employees are to respect and abide by the rules of their organizations. There should also be leaders who will monitor the obedience of company members and punish them in case of the violation of accepted agreements. Failure to comply with work discipline is a frequent article of dismissal, and no form of strategic management can be associated with subordinates indifference in relation to their immediate responsibilities.
Unity of Command
In an organizational environment, every employee should have only one immediate supervisor who has the power to give instructions and control the work process. The division of supervisory responsibilities among a number of people is fraught with the lack of agreement in control and distinctive approaches to personnel management. This, in turn, does not allow building a holistic work strategy that meets specific organizational interests and helps achieve high operational results.
Unity of Action
All organizational groups operating under the same goal should have a single action plan and one leader to supervise the work process. Otherwise, companies may face a risk of inconsistency in actions and the inability for different leaders to coordinate colleagues activities adequately. An effective strategy cannot involve multiple principles of work due to limited resources and a prearranged plan, which explains the value of teamwork.
Subordination of Personal Interests
The personal interests of an employee or a group of employees should not be placed above the interests of their companies. Any organizational issue is solved effectively only if the staff is ready to make every effort to realize their professional potential to the full extent. A productive workflow is built on dedication and self-commitment as the integral components of a sustainable and dynamic work regime.
Staff Remuneration
Employees should receive a worthy and well-deserved reward that will motivate them to continue their work and follow the terms of a strategic plan. Regular rewards also build subordinates loyalty to their organizations and the desire to do even better. The lack of remuneration, in turn, is a negative incentive to perform immediate tasks irresponsibly since motivation is lost, and there is no effective mechanism for assessing employees work and achievements.
Centralization
A governing center is as necessary as labor division, and this system of vertical power should be observed to build a sustainable operations flow. The degree of centralization and its proportion with decentralization depends on specific conditions and are determined for each organization individually. If companies do not have one supervising board, the reporting regime is violated, and performance gaps are observed due to disparate employees actions.
Hierarchy
In any company, there should be a hierarchy from the lowest level manager to the general manager. This is necessary for the normal functioning of the whole organization structure. At the same time, the hierarchical ladder should be as small as possible to avoid the confusion of management approaches and practices. The absence of a vertical of power is fraught with the ineffective performance of operational tasks caused by weak oversight.
Order
This principle of effective management is important as a factor demonstrating the level of the organization of the work process. Each employee should have ones own workplace and immediate tasks. Being able to operate sustainably with enough resources and without critical issues is a valuable prerequisite for high productivity. Failure to provide subordinates with such conditions reflects the incompetence of management and limited funds for employees normal operation.
Justice
This principle implies combining the aspects of equality and benevolence. Managers to treat their subordinates fairly and with respect. Any manifestation of cultural, racial, gender, or any other form of bias is indicative of the violation of employees labor rights and hinders the effective performance of direct duties. Moreover, productivity falls if managers support discrimination and violate labor code principles. Injustice is a negative incentive that complicates communication and does not allow building effective operational strategies.
Stability of the Workforce
High staff turnover is a consequence of poor management and ineffective human resource policies. This aspect weakens companies performance and lowers organizations positions in the market. According to Edwards (2018), Fayol believes that a mediocre leader who holds on to his or her job is better than a talented but unreliable and quick-going manager. Therefore, effective control over such an indicator as staff turnover is an essential criterion for productivity.
Initiative
All employees, without exception, should have an opportunity to take the initiative, express their ideas, and suggest ways to improve their companys performance. This approach to strategic management gives organizations strength and energy and emphasizes the role of each employee in the work process, which contributes to their dedication and self-commitment. Ignoring subordinates participation in decision-making, conversely, weakens interaction and affects employees initiative negatively, thereby reducing productivity.
Corporate Spirit
A favorable atmosphere in the team is largely achieved due to a high corporate spirit supported by managers. Team leaders promote support and understanding as meaningful values to maintain at the workplace. Bringing subordinates together allows ensuring a productive work process and building a team in which union and synergy are sustainable characteristics. Failure to address such a management principle is fraught with conflicts and misunderstandings and, therefore, impaired performance.
These principles of effective management have not lost their relevance and are the basis for productive control and leadership in organizations. At the same time, in addition to Fayols ideas, some other concepts can be viewed as a theoretical background that has shaped modern approaches. One of these theories is the scientific management model proposed by Frederick Taylor, which has become a common form of work organization.
Frederick Taylor Concept of Scientific Management
Taylors theory, developed in the late 19th century, was an important step towards the development of the same principles of resource and workforce management, which are applied in many modern companies. As Schachter (2018) notes, to solve the identified organizational problems, Frederick Taylor proposed new principles for organizing production. Given the provisions of the theory, under the old enterprise management system, success depended on the ability to get initiative from employees, which, in turn, was difficult to achieve. With the scientific organization of management, the initiative is implemented in the order of absolute uniformity and on a larger scale, which does not correspond to the principles of the old system. Moreover, in addition to this improvement related to employees, the management of the enterprise should also take on new responsibilities. Thus, for instance, the administration should take upon itself the responsibility of collecting the entire body of traditional knowledge and skills that its workers possess, as well as the tasks of classifying, tabulating, and converting all this knowledge into rules, laws, and formulas that provide workers with sufficient help in fulfilling their daily duties (Schachter, 2018). As a result, the concept of scientific management is based on the careful assessment of various operational indicators that determine labor efficiency and influence subordinates motivation.
All these new responsibilities of the directorate fall into the following four groups that Schachter (2018) describes as the updated principles of leadership in the transition to an advanced form of scientific management:
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The administration takes upon itself the development of a scientific management background, replacing the old traditional and crude-practical methods for each individual action in different types of labor used in the enterprise.
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The administration makes a careful selection of workers on the basis of scientifically established characteristics and then trains, educates, and develops each individual employee, while earlier, a worker chose ones own specialty and trained on ones own.
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The administration cooperates with employees to achieve the conformity of all individual branches of production with the scientific principles that it previously developed.
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An almost equal distribution of labor and responsibility is established between the administration of the enterprise and subordinates. The management engages in those branches of labor it is better adapted to, whereas earlier, almost all working activities were entirely assigned to employees.
This combination of employees initiative, supplemented with new types of functions carried out by the administration of the enterprise, makes the scientific management system superior in productivity to obsolete systems. According to Schachter (2018), three of the listed elements of new management functions are found in those control approaches that are based on the principles of initiative and reward. However, under this system, they are of negligible importance, while under a scientific organization, they constitute the essence of the entire system. The fourth of these elements, which implies the equal distribution of responsibility between the enterprise management and subordinates, requires further clarification.
The basic philosophy of the system of initiative and reward provides for the need for each employee to bear almost full responsibility both for the overall plan and for each individual part of ones work, as well as for the tools one uses. In addition to this, physical work lies entirely on an employee. To address such inequality, the provisions of the scientific organization of labor presuppose the development of numerous rules, laws, and formulas that replace the personal judgment of an individual worker and can be usefully applied only after systematic accounting, measurement, and other procedures determined by the labor code. Schachter (2018) mentions the equality of participation, which implies the legitimacy of using human labor and the inadmissibility of any form of bias. As a result, Taylors concept of scientific management implied restructuring obsolete manager-subordinate interactions by making these relationships equal in terms of the labor law.
Thus, all that elaboration of plans, which, under the old system, lied entirely with a worker and was based on his or her personal experience, should, under the rule of the new system, be completely carried out by the management of the enterprise in accordance with the laws of science. This is due to the fact that even if an employee were perfectly capable of developing and applying scientific data, it would be physically impossible for him or her to perform a wide range of different tasks. Therefore, the division of labor resources and creating as equal opportunities as possible corresponds to the modern principles of management promoted in different organizations, including the public sector.
The proposed concepts and theoretical aspects reflect the value of strategic management and adequate approaches to the allocation of available resources, including the workforce. However, in addition to the principles of control, additional organizational factors need to be taken into account to maintain a sustainable strategic planning system. Different working conditions require distinctive tools and steps to be taken to ensure the smooth implementation of change programs in companies. One of the crucial criteria to review is the organizational structure, which correlates directly with the quality and sustainability of strategic planning.
Organizational Structure and Its Importance to Strategic Planning
The organizational structure that provides the function of strategic management in a company is formed by the strategic planning department at the highest management level and a set of strategic business units, which include their own strategic planning services. Organizational structures that contribute to implementing the principles of strategic planning and management have evolved evolutionarily as the concept of strategic management developed. To strengthen the function of strategic management, groups of innovations, program-target approach, and matrix structures are utilized. Nevertheless, as Neis et al. (2017) state, the greatest attention should be paid to the use of the concept of strategic business units in the design of organizational structures for managing enterprises. It fully implements the principles of centralizing strategy development and decentralizing the process of its implementation, ensuring flexibility and adaptability of management, and involving a wide range of managers at all levels in the control process. This complex system allows allocating tasks and resources adequately to assign responsibilities and maintain an effective mechanism of strategic planning. Otherwise, the risks of the inconsistency of tasks with current capabilities are manifested due to the lack of a stable control system over changes and innovations at enterprises.
In practices, according to Neis et al. (2017), this is possible to create three types of strategic planning services.
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A strong central planning service that develops strategies for the entire organization and its divisions.
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A centralized planning service that performs strategic planning by providing methodological assistance and coordinating the activities of strategic business units and other divisions of the organization.
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A decentralized strategic planning service in which the authority and responsibility for the development of strategies is fully vested in the heads of strategic business units.
The choice of this or that structure of strategic planning is determined by many factors the complexity of the organizational structure of the enterprise, its specific properties, accumulated experience, planning traditions, and some other factors. A strategy and organizational structure are closely interrelated: firstly, a strategy is the main factor that determines an organizational structure, and secondly, an organizational structure needs to create the necessary conditions for the successful implementation of a strategy. Therefore, Fauzi et al. (2021) argue that when moving to the implementation of a new strategy, this is essential to check how the existing organizational structure corresponds to it and, if necessary, carry out appropriate organizational changes. The authors note that the choice of an organizational structure is influenced by various factors (Fauzi et al., 2021). The most significant of them are the size and nature of the organizations activities, its geographical location, the goals set, the technology used, the intensity and scale of innovations, the personnels qualifications, the values that leaders and employees adhere to, the dynamism of the external environment, as well as the strategy implemented. Thus, the aspects of organizational structure and planning overlap and provide a framework for conducting business activities aimed and maintaining change regimes and ensuring adequate resource allocation.
What are the Elements of a Viable Strategic Plan?
The strategic plan of any company is considered a set of missions, goals, and strategies for achieving them, formulated at various organizational levels by the responsible parties. The team involved in developing and implementing a viable plan includes not only managers but also ordinary employees engaged in creating a sustainable algorithm. Moreover, according to Bryson and Edwards (2017), strategic planning can be applied to organizations, collaborations, functions (e.g., transportation or health), and to places ranging from local to national to transnational (p. 1). This means that this business concept is multifunctional and has a number of implications and options to implement.
In its traditional form, a viable strategic plan includes several basic elements. Bryson and Edwards (2017) discuss the fundamental activities that shape the construction of this concept and form its framework. The authors focus on public sector organizations and note that this is not necessary to follow a strict order of all the activities presented, but the more elements are used, the higher is the likelihood of successful planning (Bryson & Edwards, 2017). As a result, a viable strategic plan consists of several elements that are to be observed by analytical teams.
Preparation Procedures
At this stage, the main elements to include in the proposed plan are discussed, and an approximate timeline and resource framework are discussed. The list of stakeholders is determined, and the interests of all participants are considered to identify the need for involvement in a specific project. This element of the plan is mandatory and standard for most strategies since any analysis requires estimating resources and time periods.
Organizational Objectives
Further, the main objectives are identified, which correspond to the organizations business specifics. Bryson and Edwards (2017) highlight mission, vision, values, and goals, as well as applicable legal statutes or mandates (p. 7). This element of a strategic plan is important in the public sector since the aforementioned lenses become the key determinants by which the target audience is guided and recognizes a particular company.
Analysis of Operating Environments
The following element, which is a SWOT analysis, is a valuable stage of a strategic plan. This framework is a helpful approach that may contribute to identifying the main weaknesses and strengths by evaluating the organizations internal capabilities and threats and development opportunities by determining the peculiarities of the external environment. Due to this analysis, stakeholders can highlight the features of a specific business, including its strengths and pitfalls.
Issues Analysis
While taking into account potential changes in the mode of operation, this element of a strategic plan is aimed at identifying additional challenges. In a dynamic work environment, different circumstances can affect the stability and rhythm of processes in organizations. Therefore, given various conventions and potential shifts in the direction of development, such an analysis complements the aforementioned SWOT framework and helps avoid undesirable outcomes.
Strategies Identification
This element of a viable strategic plan involves the direct formulation of strategies. When taking into account the identified challenges and potential obstacles, the range of problems is determined, and the preliminary development of a particular project is drawn up based on this information. In the future, certain aspects may change, but in general, at this stage, the basic strategic framework is compiled to work further.
Feasibility Assessment
After identifying the key strategies to apply, their feasibility needs to be verified. For this purpose, relevant criteria need to be taken into account, for instance, the specifics of the business, the available resource and financial bases, stakeholders preparedness, and other aspects. This element of the plan is important because it can help identify potential gaps or deficiencies. In addition, the final versions of the strategies to implement are obtained.
Plan Implementation
This stage is the process of implementing the defined elements of the plan. All resources are combined, and work is carried out in accordance with the tasks and the time required to complete all procedures. In case a strategic plan is based on a change process, each of the steps should be taken based on a clear sequence verified initially to avoid discrepancies and mistakes.
Evaluation Stage
This element is mandatory for a viable plan since it implies constant control over all stages of activities. Corresponding subtotals are summed up, and in case of undesirable changes, edits and modifications are made timely. Monitoring should be continuous to ensure the sustained implementation of all intended objectives and results; otherwise, there is a risk of inconsistency between the original goals and the final results.
Reassessment Process
Finally, the trailing element of the whole process is optional and can be omitted if no significant deficiencies appear during the activities performed. Nevertheless, a viable plan involves an additional assessment of the prepared plan to compare the results obtained with those predicted initially. This work can help correct certain gaps and prevent them in the future to make the mode of strategic planning smoother and less time-consuming.
The presented elements of a viable strategic plan reflect a clearly compiled algorithm of work, which covers different areas and includes not only practical tasks but also forecasting steps. By following such a program, this is easier to create a sustainable transition to the desired change or to strengthen certain aspects of the business. Moreover, the more carefully each of these elements is performed, the less are the risks of obtaining distinctive results from those planned in advance. Therefore, in its ideal form, a viable strategic plan should include the aforementioned stages.
The Need to Develop a Strategic Plan in the Public Sector
Strategic planning is a set of measures that can be adapted to the needs and interests of different stakeholders. Individual entrepreneurs can also benefit from this framework by creating a stable and credible environment for bui
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