The function of strategic planning is to position a company for long-term growth and expansion in a variety of markets by analyzing its strengths and weaknesses and examining current and potential opportunities. Based on this information, the company develops strategy for itself. That strategy then becomes the basis for supporting strategies for its various departments.
This is where all too many strategic plans go astray-at implementation. Recent business management surveys show that most $\text{CEOs}$ who have a strategic plan are concerned with the potential breakdown in the implementation of the plan. Unlike $1980s$ corporations that blindly followed their $5-$year plans, even when they were misguided, today’s corporations tend to second-guess.
Outsiders can help facilitate the process, but in the final analysis, if the company doesn’t make the plan, the company won’t follow the plan. This was one of the problems with strategic planning in the $1980s.$ In that era, it was an abstract, top-down process involving only a few top corporate officers and hired guns. Number crunching experts came into a company and generated tome-like volumes filled with a mixture of abstruse facts and grand theories which had little to do with the day-to-day realities of the company. Key middle managers were left out of planning sessions, resulting in lost opportunities and ruffled feelings.
However, more hands-on strategic planning can produce starting results. A recent survey queried more than a thousand small-to-medium sized businesses to compare companies with a strategic plan to companies without one. The survey found that companies with strategic plans had annual revenue growth of $6.2$ percent as opposed to $3.8$ percent fo the other companies.
Perhaps most important, a strategic plan helps companies anticipate-and survive-change. New technology and the mobility of capital mean that markets can shift faster than ever before. Some financial analysts wonder why they should bother planning two years ahead when market dynamics might be transformed by next quarter. The fact is that it’s the very pace of change that makes planning so crucial. Now, more than ever, companies have to stay alert to the marketplace. In an environment of continual and rapid change, long range planning expands options and organizational flexibility.
The author most likely mentions the result of the survey of $1000$ companies in order to.
- Put forth an opposing view on strategic plans so that she can then refute it.
- Illustrate that when strategic planning is "hands-on" it produces uninspiring results.
- Give a concrete example of why strategic planning did not work during the $1980'$s
- Support her contention that strategic planning when done correctly can be very successful.