General Strategic Planning

Strategic planning is the process of formulating and implementing decisions about an organization's future direction. This has been shown in Figure 2-1. This process is vital to every organization's survival because it is the process by which the organization adapts to its ever-changing environment, and the process is applicable to all management levels and all types of organizations.

Let's look at the first step in strategic planning: the formulation process is the process of deciding where you want to go, what decisions must be made, and when they must be made in order to get there. It is the process of defining and understanding the business you are in and how to remain competitive within that business. The outcome of successful formulation results in the organization doing the right thing in the right way (i.e., it results in project management) by producing goods or services for which there is a demand or need in the external or internal environment. When this occurs, we say the organization has been effective as measured by market response, such as sales and market shares or internal customer acceptance. A good project management methodology can provide better customer satisfaction and a greater likelihood of repeat business. All organizations must be effective and responsive to their environments to survive in the long run.

The formulation process is performed at the top levels of the organization. Here, top management values provide the ultimate decision template for directing the course of the firm. Formulation:

• Scans the external environment and industry environment for changing conditions.

• Interprets the changing environment in terms of opportunities or threats.

• Analyzes the firm's resource base for asset strengths and weaknesses.

• Defines the mission of the business by matching environmental opportunities and threats with resource strengths and weaknesses.

• Sets goals for pursuing the mission based on top management values and sense of responsibility.

The second step in strategic planning, implementation, translates the formulated plan into policies and procedures for achieving the grand decision. Implementation involves all levels of management in moving the organization toward its mission. The process seeks to create a fit between the organization's formulated goal and its ongoing activities. Because implentation involves all levels of the organization, it results in the integration of all aspects of the firm's functioning. Integration management is a vital core competency of project management. Middle- and lower-level managers spend most of their time on implementation activities. Effective implementation results in stated objectives, action plans, timetables, policies and procedures, and results in the organization moving efficiently toward fulfillment of its mission.

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