Planning is of great importance to a business if it is to maintain a competitive edge over its

rivals and if it is to survive in the harsh economic and business environment. The aim of this
essay is to ascertain the importance of strategic planning in business to mangers. The writer
will first define the key terms (planning, strategy, manager and strategic planning), outline the
process of strategic planning and then proceed to discuss the importance of strategic
planning for business managers from a Zimbabwean perspective, after which a concluding
statement shall be given, to sum up the discussion.
Definition of key terms
Planning- it is a continuous process of thinking and deciding for the future, in advance, taking
into consideration facts, projections and estimates, so as to achieve the desired results.
Koontz and ODonnell (1972) concur, as they define planning as an intellectual process,
conscious determination of course of action and the basing of decisions on purpose, facts and
considered estimates. Planning involves defining the organizations goals, establishing
strategies for achieving those goals, and developing plans to integrate and coordinate work
activities. Its concerned with both ends (what) and means (how).
Strategy- Is a predetermined course of action, taken, with the desire to reach set targets.
Thompson et al (2005) opine that strategy defines how the organization will do what it is in
business to do, how it will compete successfully, and how it will attract and satisfy its
customers in order to achieve its set goals.
Manager- is a person who is responsible for co-coordinating the organizations resources and
the actions of others, for the achievement of set goals. Robbins and Coulter (2012) state that
a manager is one who coordinates and oversees the work of other people so that
organizational goals can be accomplished
Strategic Planning- is an organization's process of defining its purpose, its goals and its
direction and its strategy to achieve those goals, and making decisions on the allocation of its
resources in pursuit of this strategy. Goldstein & Pfeiffer (1993) also define strategic planning
as a process by which the guiding members of an organization envision its future and develop
the necessary procedures and operations to achieve that future. Olsen and Eadie (1982) add
that it is a disciplined effort to produce fundamental decisions and actions that shape and
guide what an organization is, what it does, and why it acts as it does and it involves widescale information gathering, formulation and exploration of optional courses of action, and
emphasis on the future implications of near-term decisions while Nolan et al (1993), suggest
that it includes envisioning and developing procedures to achieve the future and it is part of

the strategic management process (Ansoff, 1965). Strategic planning involves the alignment
of the opportunities in the organisations external environment and use of the organizations
strengths to capitalize on the environment, according to the organizations capabilities.
The Strategic Planning Process
Strategic planning is a six-step process (Robbins & Coulter; 2012), that involves planning,
implementation, and evaluation. Although the first four steps describe the planning that must
take place, implementation and evaluation are just as important! Even the best strategies can
fail if management doesnt implement or evaluate them properly. It is therefore imperative that
great care and expertise is taken during the planning process, as the success or failure of the
organisation is dependent upon the resolutions that will emanate from the planning process.
The following diagram summarizes the strategic planning process.

Step 1: Identifying Vision and Mission: Every organization needs a Vision. It is a statement
of its purpose, defining what it is that the organisation seeks to achieve. The organizations
vision is a birds eye view of the objectives of the organization and gives direction to and acts
as a guideline for the organisation activities. The Mission statement then translates the
Organizations vision into a reality, by stating how the organisation is going to achieve its
vision.
Step 2: Formulation of Goals & Objectives: The nuts and bolts of the strategic planning
process are expressed in measurable goals. Management decides on the targets they want
the organization to achieve and these should be specific, realistic and concrete, expressed in
terms of quantities and timelines. This is important in that it allows management to evaluate
progress and pace of developments.

Step 3: Undertaking of Environmental Scanning: Management needs to stay alert for

changes in its organizations environment. Environmental scanning is undertaken by way of a
SWOT analysis, where management looks at the strengths and weaknesses of the
organization (Internal environment), as well as the opportunities and threats in the external
environment. The organizations strengths are used to exploit the opportunities in the external
environment, while improvements are done to the organizations weaknesses in order to
combat the threats to the business.
Step 4: Formulation of Strategies: Managers formulate strategies, based on the results of
the SWOT analysis, (considering the realities of the external environment and the
organizations available resources and capabilities), linking the strengths to the opportunities
at the same time working on its weaknesses to eliminate the threats and thus help the
organization move forward and achieve its goals. The three main types of strategies
managers will formulate include corporate, competitive, and functional strategies.
Step 5: Implementation of Strategies: Once strategies have been formulated, they must be
implemented. No matter how effectively an organization has planned its strategies,
performance will suffer if the strategies arent implemented properly. If strategies are to
succeed it may require hiring of new employees with different skills, transferring some
employees to new positions and even laying off some and also, new machinery might need to
be acquired in order to meet the demands of the strategies that would have been agreed
upon. Top management support is necessary in terms financial support if success is to be
achieved.
Step 6: Monitoring and Evaluation: The final step in the strategic management process is to
monitor the progress and evaluating the results from the implemented strategies. Here, the
management looks at how effective the strategies have been at helping the organization
reach its goals and if there are any necessary adjustments to be made. If the results are not
satisfactory or not in line with the expectations, adjustments will be made so as to align the
activities with the goals, vision and mission of the organisation.
Importance of Strategic Planning
Planning is one of the most important and crucial functions of management. According to
Koontz and ODonnell (1972), Without planning business becomes random in nature and
decisions become meaningless and impromptu choices. George R. Terry (1973) posits that
Planning is the foundation of most successful actions of any enterprise. Strategic planning,
therefore, becomes important and necessary due to the following reasons:

Aids in Goal Setting:

Goals are desired outcomes or targets and these drive organizations. The whole process of
strategic planning is to come up with a set of goals that are deemed desirable by the owners
and the management of an organization. When management undertake strategic planning,
they take into consideration a lot a variables from within the organisation and also from
without, and finally come up with decisions that affect the functioning of the organisation. By
devising a vision and a mission statement for the organisation, a clear direction as to what the
organisation sets out to achieve can be seen. From the Vision and Mission, specific goals and
realistic targets can be derived. The goals will then serve as the driving force, as they would in
turn dictate how the management and employees would work, if the vision and mission are to
become a reality.
Gives general direction:
Strategic planning gives management a sense of direction that enables them to clearly see
where the organization is headed and where the future will lead it and also provide
management and the organisation with a vision and a plan for how to reach predetermined
goals. It also includes smaller milestones (objectives) that need to be achieved before the
larger goals can come to fruition. When explicit plans are clearly laid down, a clear route or
course of action to be followed appears. This then helps managers to plan for the day to day
activities of the organisation, taking into consideration the available resources and the broad
objectives that would have been agreed upon by the organization. Without a sense of
direction, an organization will spend its time moving around in circles and reacting to
problems, thus, taking hurried and uninformed decisions that may be very costly.
Facilitates Management By Objectives:
Management by objectives refers to the use of mutually agreed goals and objectives as a
basis of evaluating employee performance (Romani: 1997; Schrader & Seward; 1989). As
strategic planning helps in the determination of objectives, it highlights the purposes for which
various activities are to be undertaken and helps in focusing the attention of employees on the
objectives and broad goals of the organisation. Since the major focus is on goal and objective
achievement, employees are evaluated on how well they accomplish these specific goals that
have been agreed upon. For the manager, this has the advantage of making sure that
everyone works and puts the maximum possible effort towards achieving the set goals rather
than on other activities that do not contribute to the success of the organization.
Helps in Resource allocation:

When clear and concise plans are laid down, the management will be able to know what
resources and how much resources are needed to carry out certain tasks in the organization.
Resources are paramount in the achievement of organizational goals and objectives. Without
the right and adequate resources, organizational projects and programmes will suffer and not
yield the required and expected results. When strategic planning as been done, tasks and
activities can be graded according to their needs and importance and as such resources will
be allocated to the various activities accordingly. This has the advantage of making sure that
no activity is starved of the necessary equipment, resources and personnel and therefore
optimum resource utilization will be achieved.
Reduces/Eliminates unnecessary wastages:
When resources are allocated in a way that allows for optimum utilization, little or no
wastages are incurred. Strategic Planning helps in knowing and determining what resources
and how much resources are to be allocated to a certain department and towards a certain
activity. This therefore, leads to best possible utilization of resources, thus improving on
quality of production and reducing possible and unnecessary wastages across the whole
organization, were possibly the wrong resources would be allocated, or more than the needed
(surplus) resources are allocated towards a certain activity. Wastage of resources is also
eliminated by selecting the most appropriate use that will contribute positively to the objective
of organization. When wastages are eliminated or reduced, the organization saves on
resources and thus leading to profitability.
Helps in awareness of the business environment:
For an organisation to thrive, managers have to and must be aware of both the internal and
external environment of their organisation. These affect the organisation in its daily execution
of its strategy and thus should be given due consideration. By undertaking the environmental
scanning stage of the strategic planning process, managers become aware of and establish
to what extent and how the general environment has an impact on the activities of the
organisation. External factors like legislation, competition, economic policies, politics, social
behaviour, technological changes and the likes all affect the business, whether directly or
indirectly, and managers should be aware of their impact on the business. Moreover,
managers must be aware of internal factors like staff, skills, finance systems, ethics,
organisational culture and products, to cite a few. These also affect the organisation and
managers should be well aware of the impact they have on the daily activities of the business.
Strategic planning brings these to the forefront and when SWOT analysis has been carried
out, managers will have a clear idea of how to deal with them before they can adversely
impact the organisation.

Gives Competitive edge:

Strategic Planning gives the organization a competitive edge over its competitors and rivals.
This is because during the strategic planning process, decisions to change production
techniques, work methods, product/service quality, quantity, designs, staffing and personnel
changes and extension of work can be adopted and even the redefining of goals and
objectives, etc. With the help of forecasting not only does the organisation secure its future, it
is also able to predict and estimate the future moves of its competitors and the general trends
in the industry and economy in which it operates, thus the organisation can counteract and
beat the competition and the industry, and have contingency plans in place which will help in
facing future challenges should there be changes in the external and internal environment
alike..
Helps in budgeting:
A budget is a numerical plan for allocating resources to specific activities (Russell & Taylor;
1995), thus budgeting is planning for resource allocation. Budgeting is one of the most critical
elements in the day to day running of an organization as it has a direct bearing on the results
of the organizations plans. It is imperative that the management gets the budgets right as
resource allocation stems out from the budget. When strategic planning has been carried out
effectively, managers will have correct and concise figures regarding to the funds and
resources that would be needed to carry out the organisations strategic plan. If they get it
wrong in the budgeting phase, it is likely that the organisation will face challenges in pursuit of
their goals and objectives.
Hiring and staffing is made easy:
During the environmental scanning stage of the strategic planning process, an internal skills
audit is conducted. This is where the management look at all its human resources (personnel)
and try to match each employees skills against the work and duties that arise as a result of
the new strategies that will have to be adopted by organisation, so as to determine the right
job/work and duties of each and every employee. For strategies to be effective, management
will have to match each employee to their right duties according to their expertise and
experience. Sometimes, it becomes necessary for other employees to be retrenched if they
are deemed surplus to requirements or if they do not meet certain required standards and at
times it would also be necessary to hire new employees who possess certain skills that would
be required in order to achieve the set targets, objectives and goals.
Facilitates Coordination and active participation:

Strategic Planning revolves around attainment of organizational goals. Good plans unify the
interdepartmental activity and clearly lay down the area of freedom in the development of
various sub-plans. Various departments work in accordance with the overall plans of the
organisation. Thus, there is harmony in the organisation, and since all activities are directed
towards the achievement of common goals, this leads to an integrated effort throughout the
organizations various departments. This in turn helps avoid duplication of efforts and conflict
of jurisdiction, leading to better co-ordination and productivity and profitability. Strategic
planning also helps managers find out problems of work performance and aims at rectifying
the same.
Reduction of Uncertainty
The future is always full of uncertainties. A business organisation has to function in these
uncertainties. It can operate successfully if it is able to predict the uncertainties. Some of the
uncertainties can be predicted by undertaking systematic forecasting. Thus, strategic planning
helps managers in foreseeing uncertainties which may be caused by changes in the business
environment, be it changes in technology, fashion and taste of people, government rules and
regulations, legislature, economic changes etc.
Allows for innovation:
During the planning process, managers come up with new, innovative and creative ideas of
doing things and going about day-to-day business. This improves the overall functioning of
systems within the organisation, thus saving time and valuable resources. When new ways of
conducting business are discovered, the organisation attains a competitive edge over its rivals
and competitors. This creates a forward-looking attitude among the managers and spurs and
propels the organisation forward towards goal achievement.
Critique of Strategic planning
Strategic planning has been used as a tool for revitalizing and transforming organizations, be
it multi-national corporations, government agencies, nonprofits and small to medium
organizations. However, there has been a rise in skepticism about planning. Since strategic
planning targets the long term, many factors come into play to render such ineffective, and
these include:
Uncertainty: Political and economic uncertainty is the norm and order of the day. One day,
the political and economic climates are favorable, and on the other, things change. These
changes in the landscape happen on a daily basis and it is difficult to keep pace with these,

such that management plans can be adversely affected by these rapid changes, and as such
the organization may fail to attain it goals and objectives.
The world is not static: The assumption that the world will hold still while a plan is being
developed and then stay on the predicted course while that plan is being implemented is a
misleading notion (Evans; 2007). In fact, the environment within which all organizations
operate, far from being predictable and static, keeps changing at an ever-faster rate, meaning
that plans can quickly end up out of date or irrelevant. This risks reification the tendency for
a plan to become an end in itself that must be pursued even when unexpected changes in the
environment invalidate the assumptions on which it was based. Following the blueprint
becomes a substitute for addressing the realities facing the institution.
Plans cant be developed for a dynamic environment: Technological and social change
have accelerated to unimaginable speeds. There is some disillusionment with planning efforts
that cant keep pace with the rapid change in technological advancements. Because of these
advancements, new and better ways of doing things arise everyday and these cannot be
predicted, planned and budgeted for. It therefore makes it difficult and makes less sense to
plan, considering that tomorrow the environment might be different from what it is today.
Formal plans cant replace intuition and creativity: Another fallacy of strategic planning is
the assumption that structural systems and a rational sequence, (from analysis through to
administrative procedure to eventual implementation), are superior to human judgment,
intuition and creativity. In practice, however, formalized procedures almost never forecast
discontinuities or create novel strategies (Mintzberg; 1994). Rather, they incline planners to
concentrate on means rather than ends, on how to do things rather than on why to do things
and on better ways of pursuing current objectives rather than reconsidering which objectives
should be pursued
In conclusion, planning is important, in that it sets out a road map for an organization and
gives it focus and goals to target. It is important that an organisation has a purpose for
existence; otherwise, all activities will be meaningless. Also, strategic planning gives the
modern day manager the tools for control and for leading his subordinates. By setting out
goals and objectives, all within the organisation have targets and that is to attain the set goals,
thus managers will have a basis for control and assessment of the effectiveness of their
employees and methods.

Moreover, strategic planning provides a base from which progress can be measured and
establish a mechanism for informed change when needed. Finally, as the old saying goes,
failing to plan is planning to fail, if managers fail to plan, it would be difficult to tackle and take
on the everyday challenges in the business world, since they would not be anticipated, but if
strategic planning has been done, the manager can easily anticipate these challenges and
thereby have counter measures for such problems as he faces them on a day to day basis.
On the other hand, strategic planning has its weaknesses, in that, since the world is dynamic,
it is difficult to plan for and predict the future. Although strategic planning is not without
criticism, the positives that are realized by undertaking strategic planning far outweigh its
negatives and the not having a plan of action at all.
It is the writers feeling that, despite the dynamics of the business environment, managers
should plan for the future and in the process leaving enough room and allowance to
maneuver in relation to those changes. Plans therefore should not be rigid, but rather they
should be fluid, so as to accommodate the unforeseeables as business continues.

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