Strategic planning cycle

As you can see the planning process depicted is composed of two interlinked cycles. The cycle on the left of the diagram focuses on the determination of corporate objectives and keeping them under review while the cycle on the right concerns the determination of strategy and keeping that under review.

The cycles are linked by an arrow in one direction only, indicating that a strategy is selected only after the objectives have been decided. A strategy is valid only to the extent that it achieves the objectives. Objectives are not influenced by strategic decisions. This approach to describing the strategic planning cycle or process is somewhat different from most of the charts that others have devised.

· Corporate objectives are in a different logical category to management objectives and may be determined by people who are not managers after consideration of factors that may be different from the factors taken into account in the management decisions.

· The sole justification for any given strategy is that it will achieve the corporate objectives and that, if it does not achieve the objectives it is the strategy that is changed, not the objectives. If no strategy can be devised be achieve corporate objectives then the organization itself has failed; because the organizational objectives are corporate, and the organization will be disbanded.

The diagram also suggests that corporate objectives are not affected by results or by a manager’s confidence in his plans. It also suggests that objectives cannot be determined until some of the environmental factors have been examined, i.e. those factors that affect the selection of objectives have to be examined before the objectives can be selected, but those that affect strategic decisions may be examined before, during or after the determination of objectives, the diagram is neutral on that point. It does show that strategic decisions cannot be taken until both the objectives and the factors affecting strategic decisions have been determined.

What we are really saying is that the strategic planning cycle is not a thing unto itself. The planning cycle is subject to the setting of corporate objectives. These are the province of corporate governance rather than corporate management. The objectives consist of two parts.

· First and foremost, the governing body approves targets for corporate performance in achievement of the fundamental purpose of the organization, and

· Secondly, policies determined by the corporate governing body that regulate the behavior of the organization while in pursuit of its overall performance objective,

Дата добавления: 2015-11-16