STRATEGIC PLAN]

 Strategic plans are plans designed to ensure that the organisation

as a whole is aligned with the changing external environment.
These plans are formulated by top management and focus on the
entire organisation.
 Planning at strategic level includes:
 ■ Creating a vision (dream) of the future for the entire organisation
 ■ Translating the vision into a realistic mission statement
 ■ Translating the mission statement into measurable long-term
goals
 ■ Choosing a strategy/strategies to attain the above
 Strategic planning reflects the following characteristics:
 ■ Strategic plans have an extended time frame, often more than
five years. However, the time frame depends on the type of industry
and may be longer or shorter than five years. In the fashion industry
strategic planning will cover a period of only a few months whereas
strategic planning in the forestry industry may cover periods of thirty
or forty years.
 ■ They focus on the entire organisation and not just certain
departments in the organisation.
 3 ■ Strategic plans look at reconciling the organisation’s resources
with threats and opportunities in the external environment.
 ■ They focus on creating and maintaining a competitive advantage
for the organisation.
 ■ These plans also take synergy into consideration. Where synergy
between an organisation’s strategic business units cannot be
optimised, top management may 132 management principles plan
 to close down some of the business units or sell them. BCHANGES
IN THE ENVIRONMENT necessary for Structuring the organisation
Determining what kind of people we need Plans (goals)
Determining how we should lead them Furnishing standards of
control Figure 5.1 Importance of planning Strategies do not attempt
to outline in depth and in detail how an organisation is to
accomplish its goals. Tactical and operational plans are therefore
needed to implement the strategies at middle and lower
management levels. The balanced scorecard (BSC) is a tool that
can be used at strategic, tactical and operational level to ensure
that all divisions and individuals in the organisation focus on the
same key performance areas.
 5.3.2 Tactical plans Whereas strategic plans focus on the entire
organisation and its interaction with the external environment,
tactical planning deals primarily with people and action to
implement the strategic plans. The focus could be on the functional
areas in an organisation, such as the marketing, finance,
operations, human resources, purchasing, research and
development, and other functions. A tactical goal of the marketing
manager for a chain of bookstores could be to increase its brand
recognition amongst university students to 30 per cent within the
next three years. In the same chain of bookstores the operations
manager may have a goal to redesign the layout of each bookstore
within the planning 133 same period. The financial manager in this
chain may have a tactical goal to earn at least ten per cent on
excess cash over the following two years. Table 5.1 explains how
tactical plans differ from strategic plans. Table 5.1 The difference
between strategic and tactical plans Type of plan Focus Time frame
Specificity Information required Strategic Entire organisation Long
term Directional, broad Difficult to gather information Tactical
Functional areas Medium term More specific Information more
focused on specific issues Of importance in formulating tactical
plans for the different functional areas is the issue of synergy. All of

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 these plans should be congruent – that is, they should contribute to
the attainment of the organisation’s overall goals. This could mean
that some of the tactical plans – and goals – will have to be
reformulated to accommodate the plans from other functional
areas.
 5.3.3 Operational plans Operational plans are developed by lower
level managers. In some industries, such as the mining industry,
lower level managers are called supervisors. These plans focus on
carrying out tactical plans to achieve operational goals. Operational
plans are narrowly focused and have relatively short time horizons
(monthly, weekly, and day to day). For instance, the supervisor at a
mine may formulate an operational plan to ensure that all work
shifts for the next week are properly staffed. An airline pilot will
complete a flight plan for each flight to ensure a safe and
comfortable flight for the crew and passengers. There are two basic
forms of operational plan, namely single-use plans and standing
plans. Single-use plans are used for non-recurring activities, such
as the refurbishment of some of the City Lodge hotels in the
Western Cape. Plans that remain roughly the same for long periods
of time are called ‘standing plans’. Specific types of single-use and
standing plan are illustrated in Figure 5.2. A programme is a single-
use plan for a large set of activities. The upgrading of all national
and international airports in South Africa by Airports Company
South Africa (Acsa) before a specified date is an example of such a
programme. A programme manager manages a portfolio of projects
and is responsible for the programme meeting its deadlines. A
programme manager will have project managers working under him
or her. A programme can consist of different projects. The
upgrading of all nine airports in South Africa can be seen as nine
separate projects, each with its own project manager. A project
plan guides each project and should state clearly the scope of the
project, time, cost, risk and quality issues relating to the specific
project. 134 management principles A project goes through the

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 following phases:4 1. Initiating 2. Planning 3. Executing 4.
Controlling 5. Closing (see Figure 5.2). Project management and
general management share many similarities but also have
differences. General management focuses on the long-term
survival of an organisation; project management has a definite
beginning and end. A project is also a unique, onceoff undertaking
whereas general management is an ongoing process. Planning
Executing I