Not all companies engage in strategic planning, some of them view it as an unnecessary distraction from day-to-day activities. This type of unplanned strategy is called ’emergent strategy’. Most companies recognise the benefits of strategic planning, so what are they?
1. Risk Identification
Strategic planning helps organisations identify risks. When risks are identified, they can be managed.
2. Better Control
Strategic planning forces management to set targets, which then can be used to used to help management control.
3. Consistency
Without strategic planning, short term, medium term and long term goals could be inconsistent. For example, the organisation may make decisions which would benefit it in the short term, but damage it in the long term. By formally planning the strategy of the organisation, these goals can be harmonised and kept consistent.
4. Clarify Objectives
Strategic planning forces management to define their objectives, which helps clarify them.
5. Decision Making
Some managers prefer not to make decisions. When they go through a formal strategic planning process, they are forced to make decisions about the future of the business. The strategic plan helps forecast the future areas the company could be involved in, and decisions must be made in relation to which ones to pursue.