Strategic Planning and Its Application

Debre Berhan University

College of Business and Economics
Department of Economics

February, 2023
Debre Berhan, Ethiopia
Strategic Planning and Its Application

 Introduction
 Strategic Approach
 Strategic Planning and Management Process

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Introduction

 The literature of strategic planning and management is a terminological

minefield.
 Different organizations use the same terms to describe different things, or
different terms to describe the same thing. So what are the differences if
any, between strategic management and strategic planning?
 Strategic planning concentrates on long-term purpose and direction on
the key issues which face the organization in the longer term.
 Strategic management on the other hand tends to cover like analyzing
the environment, making choices about direction and Implementation

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The Strategic Approach

The strategic approach or mentality consists of four main elements:

1. It is Future Oriented
 It recognizes that the environment will change and tries to get ahead events
rather than simply react as they occur. The strategic approach leads the
official to ask:
 Where his commission/bureau want to be after a certain period;
 What it will need to get where it wants;
 How to develop strategies and the means to get there, and;
 Finally, how to mange those strategies, to achieve the goals and objectives.
 Strategic approach recognizes that the future cannot be controlled. But
argues that by anticipating the future the commission or bureau can help to
shape and modify the impact of environmental change.
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2. It has an External Emphasis

 It takes into account several components of the external environment
(Political, Economic, Social and Technological or PEST); and recognizes
that each of these can either constrain or facilitate the commission or Bureau
as it seeks to implement policy.
 Politics - determine the policies that are to be implemented;
 Economics - determine the commissions and Bureau’s level of resources;
 Social factors - determine who the commission’s or Bureau’s beneficiaries will be;
 Technological factors might affect the commission’s or Bureau’s early warning
capacity.

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3. The Commission or Bureau is Not Free to do Anything

they Decide
 The commission and bureau must be sensitive to the needs of and respond
to demands, which constituents over whom they have little or no control.
Among those constituents, political actors are perhaps the most important.
 It recognizes that to maintain a chose fit with the environment, the different
elements of the commission or bureau will need to be continuously
reassessed and modified as the environment evolves.

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4. The Strategic Approach is a Process

 It is continues and recognizes the need to be open to changing goals and
activities in light of shifting circumstances within the environment.
 The strategic approach is a process that requires monitoring and review
mechanisms capable of feeding information to managers continuously.

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The Strategic Planning and Management Process

1. Get Organized
 The first step in Strategic Planning Management is to get organized i.e. deciding whether to
develop a strategic plan. Before investing considerable effort in Strategic Planning Management,
it is advisable to pause for a moment and consider why the bureaus are planning and have
Strategic Planning Management.
 First, you should consider the benefits or payoffs you anticipate from the planning. This is
because strategic planning takes time and requires resources.
 Second, after deciding to develop a strategic plan, you have to get the commitment of the
leaders of the commission or bureau particularly the commissioner, deputy commissioner or
Bureau heads. Don’t begin without it. The commitment of department heads and key staffs is also
important.
 Third issue in organizing your planning is deciding on whether you need help to complete the
plan. Several resources are available: Consultants, books or articles on strategic planning, courses
and seminars, and learning from other organizations with good planning systems.
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2. Form a Planning Team

 Most organizations use teams to do much of their planning. The team is
usually composed of 5-8 people but may be as small as 3 or as large as 12
or more.
 The size of the planning team will depend on the size of the commission’s or
Bureau’s staff who can qualify to participate in the process.
 Generally, the larger the team, the more structure is required in team
meetings and may not be manageable and efficient.

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3. Vision and Mission

 The third step in Strategic Planning Management is defining your vision and
mission. A vision statement details where the organization aspires to
go. The following quotations explain what a vision is:
 “Where there is no vision the people perish”
 “Whatever, the mind of man can conceive and believe it can achieve”
 “A man becomes what he thinks about most of the tie”.
 “Belief creates the actual fact”
 “Your imagination is your preview of life’s coming attractions”
 “What ever you want, wants you:”
 Mission is used to indicate the continuing broad general purpose for
which the commission or bureau exists.
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4. Identifying Stakeholders
 Stakeholders are those individuals, groups, and organizations who believe,
rightly or wrongly those they have a stake in the commissions or bureau’s
future. The power of stakeholders to affect the commission or bureau can
be split in to four categories:
 Those who have direct power over resources (donors, government)
 Those who have power or political influence (council of ministers, parliament,
regional councils and executive committee members)
 Those who have power over service, people on whom the commission or Bureau
depends to provide the service the community, beneficiaries)
 Those who have power over the environment.
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5. External Environment Analysis

 What the commission or Bureau wants to be in the future is highly influenced by
the environment which is external to the commission or Bureau. The external
environments of the commission/Bureau may be favorable or highly uncertain
and hostile.
 If the environment of the commission/Bureau is favorable less management time is
required and if the commission’s/Bureaus environment is uncertain and hostile,
then much more management time and attention is required. In analyzing the
external environnemental conditions, techniques like :
 Customers/clients needs analysis;
 Competitors and allies analysis;
 PEST (political, economic, societal and technological) analysis must be conducted.
 Threats and opportunities should be critically examined.
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6. Internal Environment analysis

 The “Getting there” of the commission/Bureau, will also be affected by its
internal factors. Internal environment analysis focuses on strength and
weaknesses in relation to structures systems, processes and people within the
commission/Bureau.
 It provides the answer to the question “what are the things about ourselves
which are likely to help us or hinder us in our attempts to be what we
want to be.
 Two techniques could be employed to analyze the internal environment of the
commission or Bureau.
 Benchmarking and;
 The 7-S framework;
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i. Benchmarking
 The idea is the commission or Bureau is able to compare its own
performance with the best institution in its sector being defined to ensue that
the comparisons are between commissions or Bureaus which deal with
similar types of activities and work load.
 The key steps in setting up a bench marking process are:
1. What are we going to benchmark?
2. Who are we going to benchmark against?
3. How will we get information?
4. How will we analyze the information?
5. How will we use the information?
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ii. The 7-S Framework

 The 7-S framework is an example of a checklist technique. The main assumption is that,
successful implementation of strategy. There must be a match of the seven elements in the
framework.
 The 7-S represents:
 Skill,
 Structure,
 Systems,
 Shared values,
 Staff,
 Style and
 Strategy
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7. SWOT (Strength, Weakness, Opportunity and Threat)

Analysis
 After conducting external and internal analysis, the planners should also
conduct a matching analysis, i.e. the internal strengths and weakness of the
commissions or Bureaus must be analyzed in relation to the opportunities
and threats from the external environment.
 This matching analysis will show us the position of the commission/Bureaus
and the type of intervention needed.

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8. Identification of critical issues for the future

 The final element of the analysis stage (which ever techniques have been used) in the
identification of critical (strategic issues) some issues may emerge directly from the
external analysis, some from the internal environmental analysis.
 However, most strategic issues may well emerge from putting the internal and external
environment analysis together. The strategic issues that may emerge from this analysis
might be fundamental policy choices affecting the commission’s or Bureau’s:
 Vision;
 Mission;
 Values;
 Services;
 Beneficiaries;
 Financing;
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 Organization or management
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9. Developing a strategic
 After identifying strategic (Critical) issues, the commission/ Bureau can
select a planning approach that will enable the planning team to identify
alternative strategies for the commission /Bureau/. Basically there are three
methods or approaches for formulating an organizations strategy for the
future. These are:
 Scenario approach
 Critical issue approach
 Goal approach
 These approaches may be used individually or in combination. It is
recommended that you begin developing your strategy by selecting one of the
approaches around which to organize your planning.
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i. Scenario approach: With scenario approach you develop several

alternative pictures of what the commission/Bureaus might look like
in the future. You then pick the best scenario and refine it.
ii. Critical issues approach: A second method of developing your
strategy for the future is the critical issue approach that involves the
planning team sequences critical issues in some logical order with a
list possible solutions/sound strategies to each issue.
iii. Goal Approach: A third way to develop a strategy is to set several
major goals or targets for the commission/Bureaus in the coming
years, and then determine the best strategy to reach each goal.

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10.Draft and refine the plan

 Your major tasks after developing the strategy is to get a first draft of the plan
on paper refine it then adopt the plan. Common activities in this include:
 Agree on a format for the plan;
 Develop a first draft;
 Refine the plan;
 Adopt the plan;

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11.Implement the plan (Strategic Management)

 A common misconceptions is when your strategic plan is approved your
planning is complete. A better view is when your plan is approved, a new
phase of planning have begun.
 Remember that implementing the plan, monitoring progress; making mid
course corrections and updating your plan are all part of the strategic
planning and management process.
 Make sure that the directions and strategies in your strategic plan are
incorporated in to the coming year’s objectives and budget. A good plan
needs good implementation action. Review progress toward the plan at six-
month intervals.
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 Thank You!!!
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