needed some planning in order to increase the revenues. After the changes that he
made through new products and methods in producing the products themselves as well
some ongoing research about the consumers’ preference and awareness, he did some
appropriate response to it such as spending $300,000 on television advertising for two
months due to consumers’ unawareness that their product contains no artificial colouring
and flavouring which one of the way to attract most health conscious consumers. This
resulted in the increase of revenues from $1.5 million to $15 million in 2000-2001
periods, as well as the market share that had risen from 2 per cent to 25 per cent. In this
context, Sunrise Confectionary uses their organizational planning to give them direction
as well as set standards in accordance to its competitors (Robbins et al 2003).
In general terms, planning can be referred to in two ways: formal and informal. Formal
planning means concentrating on the achievement of the goals. Simple thing such as
setting a period of time to achieve that goal and writing down a list can be shared by
throughout the organizational structure so everyone knows what they have to do, where
they have to go also have something to refer back to while they are at it.
Informal planning is the reverse of the formal planning which is usually present in a
small business or organization. Informal planning is not as well organized because it is
not written and there is limited sharing among individuals due to an abstract form of it.
This shows that formal planning is addressed for a bigger organizational structure that
want to achieve their future organizational purpose positively because it assists them in
formalizing and systemizing all the processes being made.
There are various types of organizational plans. However, this essay will only discuss
the three major types of planning in an organization: budget planning, project planning,
and strategic planning. The best way to categorise each of the organisational plans is
via its breadth, time-frame, specificity and frequency of use.
In specific terms, a budget is a plan of action matched by resources required to
implement the plan (Hussey 1998). In other words, a budget is a plan. Budgets generally
divide between two broad categories: the operating budget, sometimes known as the
“expense” budget and the capital budget. Budget in simpler terms mean a sum of money
allocated for a particular purpose (Webster’s New World College Dictionary 2001).
Budget is in everyone’s life, be it a small or a big one. Budget is a tool which helps in
controlling and planning the functions of an organization. It is a formalized statement of
the goals of an organization stated in financial terms and accomplishes several
important functions for managers. It states future projections of revenues, expenses and
expected profits. Planning, evaluating performance, co-ordinating activities,
implementing plans, communicating, motivating and authorising actions are the main
functions of a budget. The budget period depends upon the action plan; it might be for a
short or long duration. A budget compels the managers to think ahead by formalizing
their responsibilities for planning, and is best framework for judging subsequent
performance and aids managers in coordinating their efforts, so that the plans of an
organization meets the objectives of the organization as a whole (Hussey 1998).
To plan a project a team should have a goal and should work as one unit to achieve
certain objectives. In project planning, team members should implement inventive ideas
that would serve their goal in a resourceful way. Each individual on a team should take
part in the planning process, because the diversity of team members and their different
perspectives can create more than one approach to initiate a project. Project planning
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can be explained as determining the goals and objectives of a project through a
coordination of procedures and determination of courses of action before initiating a
project. Project planning is a rational determination of how to initiate, sustain, and
finalize a project. There are many steps to be taken when planning a project within a
team. To have a successful plan when working with a team, set a role of conduct for the
team members (Free Management Library 2007). Define what each individual’s
responsibility is and what to be expected from them. Each project should be broken
down into specific tasks; it is important to find ways to divide the work into manageable
parts. All projects encounter problems and conflicts. In order to have an early resolution
to those problems, team members should discuss each potential problem that they
might face (Free Management Library 2007). Team members should have a logical
approach to problem solving. All problems must be predefined. Also, a deadline for the
project is essential. If time to get done with the project is not controlled then the project
itself can not be controlled (Free Management Library). Team members have to
prioritize and work on a certain pace. They might also have a set schedule on when
each task within the project should be done. Another important point in project planning
is communication. Team members should always give each other a feedback on the
progress of their tasks or roles and what have they accomplished. The process of
communication and its result helps diminish the conflict of change (Free Management
Library 2007). Discussing ideas within team members is a process where each
individual should contribute in. Having different ideas will make the project unique and
will create more than one method to reach the project’s goal.
Strategic plans are plans that apply to the entire organisation, establish the
organisation’s overall goals, and seek to position the organisation in terms of its
environment. Strategic plans tend to cover a longer time frame. Long-term plans can be
defined as those with a time frame of more than three years (Robbins et al 2003). They
also cover a broader view of the organisation. Strategic plans also include the
formulation of goals (McNamara 2007). There are a variety of perspectives, models and
approaches used in strategic planning. The way that a strategic plan is developed
depends on the nature of the organization's leadership, culture of the organization,
complexity of the organization's environment, size of the organization, expertise of
planners and et cetera. For example, there are a variety of strategic planning models,
including goals-based, issues-based, organic, scenario and so on. Goals-based
planning is probably the most common and starts with focus on the organization's
mission, goals to work toward the mission, strategies to achieve the goals, and action
planning. Issues-based strategic planning often starts by examining issues facing the
organization, strategies to address those issues, and action plans. Organic strategic
planning might start by articulating the organization's vision and values and then action
plans to achieve the vision while adhering to those values. Some planners prefer a
particular approach to planning (McNamara 2007).
There is a link between planning and strategic management process. Planning is one
part, though small, of the strategic management process. This can be shown using the
roles of corporate managers. One of the four major roles of a manager is to plan. This
planning plays a crucial part in determining the success of an organisation as mentioned
earlier. But first, we have to ask: What is “strategic management process?” and “What
are the steps in the process”.
There is not just one definition of the phrase “strategic management process”. The
definition, though similar, differs in accordance with people’s personal opinions. For
example, Johnson views it as a six-step process. On the other hand, Viljoen & Dann see
it as a five-step process. However, in my opinion, I agree most with Robbins’s view on
the process. Robbins et al analyses strategic management process as an eight-step
process that consists of strategic planning, implementation and evaluation. Although the
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first six steps describe the planning that must take place, implementation and evaluation
are just as important. Even the finest strategies can fall short if management does not
put into practice or assess them properly.
The first step in strategic management process is identifying the organisation’s current
mission, objective and strategies (Robbins et al 2003). Every organisation requires a
statement of the purpose of the organisation, also called a mission. The mission verifies
the reason for which the company is in the business. To do this, managers must
vigilantly recognize the range of its products and services. It is also vital for managers to
identify the goals and strategies currently being pursued in the company. Goals are a
foundation of planning which provide the measurable performance targets that the
organisation as a whole strives to reach. By being aware of current goals allows
managers to decide whether or not these current goals need to be changed. This can
also be applied to strategies currently in place.
The second step is analysing the environment (Robbins et al 2003). Analysing the
environment is a critical step in the strategy process. Robbins describes the external
environment as a significant basis on a manager’s actions. To outline a successful
strategy, it must be supported well by the environment. In this step, managers need to
know what is going on outside the organisation. Information such as what the
competitors are doing, what on-going laws might affect the organisation and what
degree of labour supply is available around the area where the company is located.
Aside from analysing the external environment, managers must also examine specific
and general environments to observe and be conscious of the trends and changes
which are occurring. This step of the process can be considered complete when the
manager has an accurate understanding of what is occurring in the external
environment and the developments which could possibly affect the organisation.
Following this, managers need to evaluate the results they have achieved in step 2 and
determine the opportunities which the company can utilize and threats it encounters.
This is all part of the SWOT analysis. Robbins defines opportunities as a positive
development in the external environment and threats as negative trends.
After identifying threats and opportunities, managers must now look inside the
organisation by analysing the organisation’s resources and capabilities (Robbins et al
2003). This includes employees’ skills, the organisation’s resources, success at
innovating products, quality of products, the organisation’s financial status, and the way
customers distinguish the organisation. All of these show that no matter how large or
how small an organisation is, the organisation is bound to the availability of resources
and capabilities. This analysis of the internal environment allows managers to recognize
specific capabilities and resources. When these capabilities and resources are
outstandingly unique, they can be used as competitive weapons. This key valuegenerating
skill is referred to as core competencies (Robbins et al 2003).
From the previous step, the organisation should now have a comprehensible appraisal
of its internal resources as well as its capabilities in executing various practical activities.
Strengths are any strong capabilities the organisation possesses or unique resource
materials (Robbins et al 2003). Weaknesses are the activities which the organisation
does not perform well or the lack of resources which they need. Robbins states that
different strengths and drawbacks have different outcomes on the strategy being
pursued. An organisation’s culture is its personality or characteristics. It is a sign of the
organisation’s mutual beliefs and values. When an organisation has a strong culture, it
becomes more straight-forward for managers to convey the organisation’s core
competencies and strengths to new employees. However, strong cultures are difficult to
change. It then becomes a barrier to acknowledging any alterations in the organisation’s
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strategies. “Successful organisations with strong cultures may become prisoners of their
own success” (Robbins et al 2003).
Strategies need to be formulated in all levels of an organisation, be it a corporate,
business or functional level. This follows a decision-making process. Strategic
alternatives must first be assessed. Managers must select strategies which harmonize
with each other and bring out the best of the organisation in terms of its strengths and
environmental opportunities. A successful strategy would be one that puts the
organisation at a relative advantage over its competitors and the most favourable
aggressive edge (Robbins et al 2003). The organisation must try and maintain this
advantage to call the strategy a victory.
As mentioned earlier, the first six steps are the planning of strategies. After an
organisation comes up with strategies, they must apply it. The same efforts put into
planning the strategies must be put into implementing it. No matter how effective the
strategies are, if the organisation fails to apply it properly, these strategies will be
deemed useless (Robbins et al 2003). Implementing strategies efficiently often means
that the organisation has to hire new people with different skills, relocating a portion of
current employees to new positions, or in the worst case, make redundant some
employees. Most organisations nowadays run their management using teams.
Therefore, building and managing effective teams is ability in implementing strategies
efficiently. Top-management leadership is equally as important. So is a motivated group
of middle and lower-managers who perform the organisation’s specific strategy needs.
The final step in the strategic management process is evaluating the results of the
strategies in terms of effectiveness, and adjustments that need to be made to improve
the success of strategies. As a real-life example, Anne Mulcahy who is the president of
Xerox Corporation made strategic modifications to develop her company’s
competitiveness in the information services industry. These strategic actions were made
after assessing the results of previous strategies and coming to a conclusion that
changed were needed (Robbins et al 2003).
In conclusion, the four key factors for success when implementing change within an
organisation are: pressure for change; a clear, shared vision; capacity for change; and
action. The various types of organisational plans as well as the implementation of
strategic management process play a significant role in planning and managing change.
Change management entails thoughtful planning and sensitive implementation, and
above all, consultation with, and involvement of, the people affected by the changes.
The four key factors for success when implementing change within an organisation are:
pressure for change; a clear, shared vision; capacity for change; and action.
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Hussey, D 1998, ‘The Making of Strategy’, Strategic Management: from theory to
implementation, 4th edn, Butterworth-Heinemann, Oxford, pp. 161-508.
Kaufman, R 1988, ‘Where to go and why get there: goals, objectives, needs, and roles’,
Planning for Organisational Success: a Practical Guide, 2nd edn, Social Impacts
Publications, Australia, pp. 1-20.
McNamara, C 2007, Strategic Planning: in non-profit or for-profit organisations, Free
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Robbins, SP, Bergman, R, Stagg, I, Coulter, M 2003, ‘Planning’, Management, 3rd edn,
Pearson Education Australia, New South Wales, pp. 171-270.
Viljoen, J & Dann, S 2000, ‘Process of Strategic Management’, Strategic Management:
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