This would necessitate a change in strategy so that as the capital and human resources evolve with in an organization, the resources within the organization are fully utilized. Research has indicated that organizational performance, age, and the culture instituted by the founder of the organization has a great influence on the prevalence of the founding strategy and hence also impact the possibility for strategic change (Boeker, 1989)
He claims that planning is a 'generic activity' the success of which is often independent of the area in which it is applied, and also planning that planning is more of an art than science and the premises of 'judgment, intuition, and creativity' are all crucial to the success of the plan. (Cartwright, 1987) Based on a research comparison conducted in large and small firms, Robinson and Pearce contend that formal strategic planning is a theoretical concept, which would suit only the larger firms and often has generally little or no impact on the financial performance of small business units
would definitely offer the organization an advantageous position of a pioneer in the field. (Gannon, Smith & Grimm, 1992)
Strategic planning enables a renewed focus to the vision and goals of the organization and brings about an added zeal within members of the organization thereby would act as a catalyst for increased efficiency and productivity. Organizations that are closed to strategic changes often become more 'stagnant', as they limit the creativity and beneficial involvement of its members (Grimm & Smith, 1991)
And finally in the role of the public relations, strategic planning which is formal would help the organization to impress or influence outsiders. (Langley, 1988) Roach and Allen recognizes that the process of strategic planning elicits the most knowledgeable and influential minds both inside and outside the corporation and hence would offer considerable benefits to the organisation
This would mean the business would run out of profitability, at least in the initial years. The process of implementation of a strategy also would demand huge capital outlays (Miles & (Snow, 1978)
Sinha also observes that the quality of planning is decisive in making it effective to enhance performance. (Sinha, 1990) There are essentially three reasons that cause top managers to initiate and implement changes in strategy (Parnell, 1994)
Low performers may plan; they just may not plan effectively. (Ramanujam and Venkatraman, 1987) In 1993, Schwenk and Shrader examined the effect of formal strategic planning on performance in small firms by meta- analysing the studies conducted on fourteen small firms
The process would play a crucial role in the performance of the organization as it deliberates on the future consequence of the decisions currently implemented, amends the plans to the changing business conditions, adopt to rational means of managing the business and coordinates with and controls multiple and complex enterprises by way of a more practical, and pragmatic management system. (Roach & Allen, 1983)
(Cartwright, 1987) Based on a research comparison conducted in large and small firms, Robinson and Pearce contend that formal strategic planning is a theoretical concept, which would suit only the larger firms and often has generally little or no impact on the financial performance of small business units. (Robinson and Pearce,1984) Robinson and Pearce was supported by Cartwright, Ramanujam and Venkatraman et al
The advantages they associated with strategic planning in organizations are that strategic planning encourages long-range and prospective thinking and often gives managers a structural framework for adopting and analysing strategic alternatives. (Schwenk and Shrader, 1993) It was Sinha who seems to have established the linkage between planning and performance with the backing of empirical data
Sinha also observes that the quality of planning is decisive in making it effective to enhance performance. (Sinha, 1990) There are essentially three reasons that cause top managers to initiate and implement changes in strategy (Parnell, 1994)
As rightly prescribed by Thompson and Strickland (2003), 'A strategic vision indicates management's aspirations for the organization, providing a panoramic view of "what businesses we want to be in, where we are headed, and the kind of company we are trying to create." (Thompson and Strickland, 2003) Strategic Planning - Through the Years Corporate planning has advanced through phases, since its widespread inception in the 1960s
In implementing a strategic plan, managers are often challenged by the apparent risks as they are solely responsible for the development of a 'new formula for success' that is suitable to address the key change in organizational and environmental, factors. (Yoshihara, 1990)