The Challenge of Long-Term Strategic Planning in the Modern Business

The Challenge of Long-Term Strategic Planning in the Modern Business

Abstract

Experts and discipline intelligentsias continue to fill this field with views and ideologies some garnered from experience or newly developed or old recycled models. Unfortunately, no matter how well drafted the desired course in company operations is, it is subject to the business environment. The type of market, economic system and industry in which a firm plies, all play a crucial role in the formulation of a strategic plan. However, due to the high cost involved in formulation and implementation of strategic plans, it is becoming more necessary in the practical field to restrict planning in the short run due to the high rate of change in the business environment that necessitates constant change in plans.

Introduction

Strategic planning is a business concept and term that enjoys wide coverage and little understanding (Romwell 2004. He says that strategic planning is a continuous process that starts with the initial strategic business plan and goes on as long as the business is present. On the other hand he says that a strategic plan will only work if there is strategic management in the business. Macharais differentiates strategic management and strategic planning by saying that strategic planning is the foundation of strategic management. How is this? According to the Merriman-Webster’s online dictionary planning is “a proposed or intended course of action, or a formulated scheme setting out stages of procedure”. The oxford dictionary offers a relatively similar definition as “formulated or organized method by which a thing is to be done”. Strategy is on the other hand defined as the art and science of devising and employing plans to achieve goals and objectives.

Therefore, strategic planning is simply the art and science of using a proposed or intended course of action in a procedural manner to achieve defined goals and objectives. When the objectives are to be achieved in a period of usually less than five years, they area termed as short term while if they are set at more than five years, they are labeled as long term. Johnson & Scholes (2002) draw us to the importance of a strategic plan in business by saying that it is the heart and soul of any scheme, actions and moves in the marketplace that managers should take in order to improve the business financial performance, strengthen its long term competitive position, and gain a competitive edge over rivals. This can be thus doe in the long run or the short run though modern business academics and experts are challenging the applicability of long term strategic planning.

The declaration by Tom Peters that long term strategic planning is not realistic in the modern business environment contrasts a long held view that strategic planning and in this case for long term goals is the key to business success. Failure to plan according to de Gues (2002) is planning to fail. But does Tom Peters’ assertion that long term strategic planning in business in modern times only exists in theory hold? A closer look at the essentials of long term strategic planning and the modern business environments holds the key to this answer. Grant (2005, pg 18) says that “the evolution of business strategy has been driven more by the practical needs of business than by the development of theory”. As such, this paper will set to prove that long range strategic planning only remain in theory and its not suited in the modern contemporary business management.

Long Term Planning in Business

According to Stefano, (2006) long term planning in business is one of the most challenging responsibilities faced by the modern business executives. She says that the main obscurity amid this ideology in business planning is the attempt to foresee and predict market and industry trends that will take place several years to come. This is contrary to what Johnson & Scholes (2002) say of strategic planning as a continuous process. In their assertion of this, the authors say that changing market conditions and forces manipulate companies in making their decisions in order to remain relevant in business and so as to stand against competition in the market place. Selson (n.d.) advices that a strategic plan “has to be kept up to date reflecting changes in the PEST analysis and taking into account competitors strategies and tactics as they become known.”

A strategic plan therefore has to be updated in order to comply with changing market environment. But how does the business environment impact a company? Johnson & Scholes (2002) say there are two ways of looking at the environment and deducing how much influence the aspect ha on the company’s strategy. He divides business environment as intern