Advantages and disadvantages of strategic planning
1 Introduction
You will not be asked simply to reproduce the advantages and disadvantages of strategic planning but you might be asked to criticise an organisation’s approach or to try to convince them to adopt a different approach to planning. The following points can then be very useful.
2 The advantages of strategic planning
The main advantages of strategic planning are as follows:
It establishes long-term objectives to the organisation and plans how those objectives can be achieved. Most organisations, and particularly the people working in them, like to know what’s expected of them. Well-established objectives can be very motivating.
The organisation is much better coordinated. If there were no planning, then production and sales and distribution could all be for different volumes. For the people working in an organisation there is a feeling of satisfaction and safety if you believe that there is a rational mind behind it and that it is well coordinated.
Strategic planning usually means long-term planning and there are many developments which inevitably take a long time to realise. If people are always concentrating on their short-term objectives then it can be difficult for them to attend to long-term projects. A long-term plan can help people to be patient.
Management shouldn’t simply be passive. If they see something unfavourable happening then they should try to change that. For example, a proposed new law might be susceptible to political lobbying, or something happening in the marketplace could perhaps be changed by clever advertising. If you don’t look into the future you will always be reactive. If you do look into the future you have the opportunity to be proactive.
The organisation is forced to look ahead. Not every development will be properly anticipated but surely making some effort to look ahead is better than stumbling forward with your eyes closed, being constantly surprised.
3 Potential disadvantages of strategic planning
The potential disadvantages of strategic planning are, perhaps not absolute disadvantages of planning, but more a result of how the planning processes is actually implemented.
Too much time can be spent planning and not enough time to spend on action. This is paralysis by analysis. Remember nobody makes profits out of planning; profits only come from action. Some people postpone making decisions (and so exposing themselves to risk) by wanting more and more information and planning.
Unwillingness to adapt. Some people stick to a plan no matter what. This is plainly ridiculous. No plan will remain appropriate over a time horizon of something like five years. It is essential that people are prepared to abandon parts of a plan which become inappropriate and to take on new opportunities as it become available. Retaining the capacity to be flexible should be part of planning.
Planning has a real costs and time and money. 10 people sitting in a planning meeting for a day, represents 2 person weeks. That sort of resource allocation soon becomes material.
Remember, planning is a means to an end, not an end in itself.