Problem:
Please answer the following question based on the information posted below and incorporate it into your response.
Question: What are the steps in the planning process? Which step is the most crucial? Why?
Information:
Management: Theory, Practice, & Application
This week we will define the planning function of management, compare and contrast the types of management plans, analyze the factors that influence strategic planning, discuss the relationship between the managerial planning process and the strategic planning process, and examine the relationship among environmental considerations, social considerations, and management planning.
The process of planning is defined as "the process of establishing objectives and specifying how they are to be accomplished in an uncertain future" (Coffey, Cook, & Hunsaker, 1994, p.444). In other words, it is proactive thinking. Planning allows us to look ahead and anticipate the direction we will take in the future. Thus, we are not "flying by the seat of our pants."
For instance, when planning a trip, one would expect that a goal would be set. An example of a goal would be "to see the Grand Canyon." Next, decisions would need to be made regarding the mode of transportation, the time available for the trip, and the financing required to make it possible. Then, the actual details, the route, the hotels, the rental car, meals, etc. would need to be established. Thus, in the process of planning a vacation to the Grand Canyon, one would have developed "Tactical" and "Operational" plans (Management: Leading and Collaborating in a Competitive World, 2007).
Business planning works in much the same way. When working for the hospital, planning at some level of the organization is a daily event. For instance, a goal for the radiology department might have been to provide Magnetic Resonance Imaging (MRI) services. This goal might fit into a larger Strategic Plan for the organization of increasing market share by developing new imaging services. The planning to achieve the goal would likely include a Tactical Plan and an Operational Plan. The Tactical Plan would be developed at the middle management (director) level and would involve the details of finding vendors and assessing sites and equipment.
Assuming the plan was feasible, the department manager would then develop the Operational Plans of scheduling personnel, maintaining supplies, and other day-to-day activities necessary to maintain an efficient operation. Standing Plans such as policies and procedures would also need to be developed by the department manager. In order to function properly, these goals and plans must be "aligned - that is, they must be consistent, mutually supportive, and focused on achieving the common purpose and direction" (Management: Leading and Collaborating in a Competitive World, 2007).
Strategic planning is "the process by which managers choose a set of strategies for the enterprise" (Hill & Jones, 1998, p. 4). Strategic plans should originate from the organization's mission and goals. If the mission for the organization is to provide excellent healthcare services to the residents of a certain area, then the Strategic Planning should support the fulfillment of that mission. A Strategic Plan outlines the "decisions about the organization's long-term goals and strategies" (Management: Leading and Collaborating in a Competitive World, 2007). In other words, the organization determines its mission, creates strategic goals based on that mission, and then develops a plan for reaching those goals.
An important part of the strategic planning process is the strengths, weaknesses, opportunities, and threats (SWOT) analysis. The SWOT is used to determine the organization's external opportunities and threats as well as the internal strengths and weaknesses. For example, for a rural hospital an opportunity might exist to expand into other locations or provide mobile health services. A threat might be competitors in the area with the same services or possible decreases in insurance reimbursement for a service. A strength might be the organization's reputation as a health care facility, whereas a weakness could be a lack of cash to fund new projects.
The SWOT helps managers identify the forces that will impact on the strategic planning process. Continuous monitoring of the external and internal environment of the organization is crucial for managers involved in planning. As stated in our text, "the strategy managers then formulate will build on the SWOT analysis to take advantage of available opportunities by capitalizing on the organization's strengths, neutralizing its weakness, and countering potential threats" (Management: Leading and Collaborating in a Competitive World, 2007). This "environmental scanning" (Management: Leading and Collaborating in a Competitive World, 2007) of economic trends, the competition, politics, social trends, and technological trends provides information for the SWOT and is vital to the success of any strategic planning.
Organizations may also use "benchmarking" in determining a strategic plan (Management: Leading and Collaborating in a Competitive World, 2007). Benchmarking is a process that allows a business to learn from the successes of others. For instance, when working in the hospital, we determined that there was a hospital in Florida that set the "gold standard" for customer service. We then used that facility as a benchmark for our plan of improving customer service. As defined by our text, benchmarking is "the process of comparing an organization's practices and technologies with those of other companies" (Management: Leading and Collaborating in a Competitive World, 2007).
The late Sam Walton was a firm believer in environmental scanning and benchmarking. He believed that his people should not search for what their competitors were doing wrong but rather, what they were doing right. The goal then was to copy what the competitors were doing right. If Wal-Mart is any indication, environmental scanning and benchmarking can pay big dividends for any business.
In summary, there is a strong relationship between managerial planning and strategic planning. Both require the manager to know where his business is today and where he wants it to be in the future. This involves setting goals based on a mission and developing a plan for achieving those goals. While there are many ways to develop a strategic plan, the analysis of the external and internal environments of the company is a critical step in the planning process.
Regardless of whether that analysis leads to a SWOT, or some other form of analysis, the manager cannot afford to wear blinders. Managers that plan without the necessary information regarding competitors, social and regulatory issues, budgets, etc. are rolling the dice, whereas the successful manager will consider all of the available information, keep a watchful eye on the competitors, and avoid any temptation to "fly by the seat of his or her pants" when it comes to planning.
References:
Coffey, R.E., Cook, C.W., & Hunsaker, P.L., (1994). Management and organizational behavior. Illinois: Austen Press.
Hill, C.W.L., & Jones, G.R., (1998). Strategic management: an integrated approach. Boston: Houghton Mifflin Company.