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University of Papua New Guinea Lecture Outline

School of Business & Public Policy
3.10801 Principles of Strategy 1. Introduction
Semester 2, 2023 2. Origins of the Planning School
3. Basic Strategic Planning Model
4. Premises of the Planning School
Topic: Planning School
5. Fallacies of Planning School
Mr. A. Kona
(MPM (VUW, NZ), LLB, BBM Hons, BBM (UPNG)) 6. Conclusion
Lecturer

Objectives of our Lecture 1. Introduction

To identify Strategic Planning School’s Planning School views strategy formation
Origin as a “formal process”.
To identify and understand Strategic It emphasises that plans must be
Planning Model formalised
To identify and understand the premise of
the Planning School
To identify and understand fallacies of the
Planning School

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2. Origin of Planning School
In the 1970’s thousands of articles
(academic & business press) emphasized
on the importance of formal planning
Implanted in the minds of managers that
planning was imperative (a must) –
modern way of mg’t.
Emphasis was on formal procedures,
formal training, formal analysis etc…
Origin of Planning School
Influential book written by Igor Ansoff 1965
titled; “Corporate Strategy”.
Popularity not as Design Sch although it
grew to have enormous impact on
Strategic Mg’t practice in the 1970s.
Quantitatively, strategic planning literature
grew dramatically, but qualitatively, it
hardly grew.
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3. Basic Strategic Planning Model
See Strategic Planning School Model in
Mintzberge, Ahlstrand and Lampel 1998.
‘Strategy Safary’, Prentice Hall, Australia,
page 50, (Figure 3.1).
Basic Strategic Planning Model
Note that there are many different
strategic planning models. But most
reduce to same idea:
“take the SWOT model, divide it into steps &
articulate each of these with checklist and
techniques, set objectives at the front end
and budget and operating plans at the
back end”.
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Basic Strategic Planning Model
Main stages of George Steiner’s book
“Top Management Planning” (1969):
1. Objective setting stage
2. External Audit Stage – Threats and
Opportunities. Predict and prepare
3. Internal Audit Stage – Strengths &
Weaknesses
Basic Strategic Planning Model
4. Strategy evaluation stage – assuming you
have arrived to the strategies.
5. Strategy Operationalization Stage –
implementation. Strategies must be
broken down into sub-strategies for
successful implementation; Long term
plans (Corporate Strategies, Medium
term plans (Business Strategies),
Operating plans (Functional or yearly)
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Basic Strategic Planning Model
6. Scheduling the whole process
- Steps in the process and the time table by
which they will be carried out, has to be
programmed.
– There has to be timeline to follow in order
to carry out the strategic plan.
- Finance must also be allocated.
4. Premises of the Planning School
1. Strategies result from a controlled,
conscious process of formal planning,
decomposed in distinct steps, each
delineated by checklists and supported
by techniques
2. Responsibility for that overall process
rests with the chief executive in principle,
responsibility for execution rests with
staff planners in practice.
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Premises of the Planning School
3. Strategies appear from this process full-
blown, to be made explicit so they can
then be implemented through detailed
attention to objectives, budgets, programs,
and operating plans of various kind.
5. Fallacies of Strategic Planning
Seven deadly sins (fallacies) of strategic
planning (Wilson, I 1994, “Strategic
Planning Isn’t Dead – It Changed”).
1. Staff took over the process – there is
always tension (groupthink)
2. The process dominated staff – Staff
placed too much emphasis on analysis,
too little on true strategic insight.
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7 Fallacies of Planning School
3. Planning systems were virtually designed
to produce no results. Role of executives
whose mandate was to execute the
strategy was denied or diminished.
4. Planning focussed on the more exciting
game of mergers, acquisitions and
divestitures at the expense of core
business development.
5. Planning process failed to develop true
strategic choices
Fallacies of Strategic Planning
6. Planning neglected the org’al and cultural
requirements of strategy.
7. Single-point forecasting was an
inappropriate basis for planning in an era
of restructuring & uncertainty in the 1980s
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Conclusion
Planning Sch contributed to strategy
formulation process an important concept
“formalization”. However, its influence was
short lived unlike the design school.
Note that planning is only good for stable
environments. However, in unstable
environments like the changing
technology, planning can be a great
challenge.

References
Ansoff, H. I 1965. Corporate Strategy. McGraw-Hill, New York.
Lorange, P. “Formal Planning Systems: Their Role in Strategy Formulation
and Implementation’. In Schendel D. E and Hofer, C. W, eds., Strategic
Management: A New View of Business Policy and Planning (Boston: Little
Brown, 1979).
Steiner G. A 1979. Strategic Planning: What every Manager Must Know.
Free press New York, USA.
Steiner G. A 1969. Top Management Planning. Macmillan Publishers,
New York, USA.
Wilson, I. “Strategic Planning Isn’t Dead – It Changed”. Long Range
Planning (27, 4 (August) 1994:12-24.