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Titled: STRATEGIC PLANNING IN ORGANISATIONS IS BECOMING DIFFICULT– an opinion report
STRATEGIC PLANNING IN ORGANISATIONS IS BECOMING DIFFICULT– an opinion report
Article Summary: I) INTRODUCTION
The Strategic Planning is referred to long term planning in a business organization.
As the first step, the General management of the organization keeping the Overall objective of the organization in mind derives the Business Strategic Plan
Then the General management derives Strategic Plans for the individual functional departments of the organization
Strategic Planni
STRATEGIC PLANNING IN ORGANISATIONS IS BECOMING DIFFICULT– an opinion report
I) INTRODUCTION
The Strategic Planning is referred to long term planning in a business organization.
As the first step, the General management of the organization keeping the Overall objective of the organization in mind derives the Business Strategic Plan
Then the General management derives Strategic Plans for the individual functional departments of the organization
Strategic Planning is considered as an important activity in Managing business entity.
This is more so in the case of large scale business organizations
Now a days the relevance of Business Strategic Planning is losing its importance due to rapid changes ( more than what is ideal ) that are taking place in the environment
Organizations need changes in the environment at an ideal rate which brings benefit to Self, Consumer, Society, Government and others but will not prefer changes at a very high rate more than its withstanding power
The author of this article wants to high light on the rapid changes that are taking place in the environment ( in terms of technology, nature, culture of the people, etc ) and how it is affecting the Business Strategic Planning activity of the business thus making the activity a difficult task.
Companies now a days consider Short term Planning activity as more meaningful activity than the Long term activity and hence prefer to prepare Short term Plans for the purposes of managing the departments rather than Long term Plans
The following paragraphs of the article describes how Managers employed in the business organization are finding difficult in performing the activity of Functional Strategic / Long Planning
II) PROBLEMS FACED BY THE FUNCTIONAL DEPARTMENT MANAGERS IN PERFORMING THE STRATEGIC PLANNING ACTIVITY
PRODUCTION MANAGER
The technology which is relevant to day becomes obsolete tomorrow
As we all know for the Production manager management means managing 5Ms is management ( Machine, Methods, Material, Men and Money required for production activity ). For managing the 5Ms Short term plan is sufficient. But in certain occasions along with the Short Term Plans for execution of his function of Production he is also expected to perform the activity of Long term Plans especially when company is planning for expansion / modernization / integration / diversification etc programs
The Production Manager is given the responsibility of selecting the appropriate machine for achieving the targeted production .For the same the Production Manager conducts an Technology Survey to find out the suitable technology for his organization’s present requirement and also for its future requirement. Based on the findings he decides the technology to be acquired for the organization. But to his disadvantage if the technology being practiced in the industry keeps changing at a very fast rate he will not be able to come out with proper findings. This uncertainty prevailing due to fast rate of change of technology putting him in an unpredictable situation and hence will lead him to take decision in ambiguity
In the present industrial scenario the technology being adopted by the industry in the areas of Logistics, Point of Production, Point of Distribution and Point of Consumption etc keeps changing at a very rapid rate. Sometimes the Managers are put in a situation of postponing their decisions until the technology in the industry settles. In such situations management considers Out Sourcing as a more feasible option with less risk involved
The rapid changing technology creates problem for the Merchandisers in identifying and retaining the component suppliers with the organization
The deriving Strategic Plan appears unclear in the environment of uncertainties
PURCHASE MANAGER / MERCHANDISER
The Purchase Managers using the Management concepts developed by experts in the field take all efforts in establishing effective Supply Chain system to ensure supply of right quality material, at right cost, required quantity, at minimum cost ,etc from the suppliers
The rapidly changing technology / production process being practiced in the industry and in the supplier industry leads to different requirement of materials and other materials thus making the management function of Supply Chain management more difficult.
The Purchase Manager is put in a dilemma situation whether the activity of Strategic Planing and implementation of establishing Supply Chain management becomes an ideal action plan and sometimes put him in the situation whether the plan is really worth doing
GOVERNMENT APPROVALS
The technology being adopted in the industry changes very fast. The requirement of the licenses / approvals to be obtained from the Government authorities also keeps changing with the changing technology being practiced in the organization.
This problem is considered as one of the major problems making the Strategic Planning exercise by the organizations more difficult.
HUMAN RESOURCE PLANNING
When the technology changes the requirement of the requirement of the skill of the man power employed changes
The efforts required to be taken by the HR Manager towards Training and Development changes. If the change is going to be very fast it will be difficult for the HR Manager to arrive at a Strategic Plan involving Training and Development program with the changes taking place
The question of Employee retention ( retaining the employee in the organization ) does not arise in the rapid changing environment. When the technology being adopted in the industry changes rapidly the employee of the organization becomes a ‘Dead log’ for the organization and the organization will find ways to replace the employee with the readily available skilled employee of the required technology, to cater to the market requirement. Any delay in the immediate switch over to the production process ( which is linked with the skilled man power ) will result in losing the market share of the organization
On the other hand the Employee loyalty concept is also not acceptable in the fast changing environment. The employee keeps changing job to make money to the extent possible in the shortest time possible before his acqired knowledge and skill becomes obsolete. He is increasing his earning capacity by switching over jobs frequently before the skill requirement which he possesses vanish in the industry
Hence the Strategic Panning of Human Resource Function of Man Power Planning activity, Training and Developing activity, etc losing its relevance in the very high rate of change of environment
BRAND EQUITY MANAGER
Due to more and more competition in the industry people are provided with many verities, many sizes, many brands, etc. By the time the customer starts using the product, the new brand / new variety with additional features enter the market making the customer unhappy of not having the latest product.
Thus the rapid change in the environment is putting the customer in a confused status thereby making him a unsatisfied person.
The fast changing culture of the people, purchasing power of the people, etc is putting the
Brand building manager difficult in arriving arrive at an appropriate Strategic Plan to suit the fast changing Customer preferences
PROJECT MANAGER
The Nature is also changing in an unpredictable fashion. The Project Manager is unable to arrive at a Strategic Plan containing the decisions on location, utilities required, etc
FINANCE MANAGER
The economy is changing rapidly after the invention of computers. The rate of development of under developed countries has gone up to a very high level after the acceptance of the computers in all the countries over the globe.
The task of Strategic Planning by the Finance Manager in terms mobilizing funds, budgeting, Investments, etc is becoming more and more difficult always making a doubt on the feasibility of the plan
III) CONCLUSION
All of us will agree change in the environment will lead to growth But at the same time this type of rapid change in the environment will not be welcomed by the business organizations because this situation may lead to more of uncertainties in the environment causing confusion affecting the decision making process.
The uncertainties prevailing in the environment caused due to very high rate of changes taking place more than the ideal rate makes the Planner’s job difficult. They are put in a situation where they ask whether there exists any purpose in performing the activity of Planning particularly when Long term plans are prepared
The experts in the business management field will accept that none of the management concepts ( used in the Planning process ) will work out in an environment where the changes happening are at very high rate very is much above the ideal rate
The world / country should have the required capabilities to with stand the high rate of changes that are taking place, otherwise the situation will lead to collapse of the entire environment
The author of this article has considered only a few examples for explaining the difficulties faced by the Planners while deriving at the Strategic Plans for their activities and also to explain the fading relevance of Strategic plans in the environment of uncertainties.
Article Source: http://www.upublish.info
About the Author:
V S RANGARAJAN
educational qualification B TECH, MBA, M PHIL, ( Ph D )
experience Industrial consultancy 18years
Industry 3 years
Teaching 5 years
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