Do Managers Need to Always Engage in Strategic Planning?

Do Managers Need to Always Engage in Strategic Planning to Ensure Successful Achievement of Organisational Goals?

The strategic management discipline is an evolving discipline that originated in the military context in the post-World-War II era. (Hanson, Hitt, Ireland, & Hokisson, 2017). The globalisation and technological advancement that has taken place over the last three decades have contributed to the widespread development and adoptions of strategic management concepts and tools, and they are now widely used in the business world (Johnson, Scholes, & Whittington, 2015). Particularly, the strategic planning process, which is regarded as the first step in the strategic management process has been helping organisations to achieve new milestones. The strategic planning process involves creating an organisation’s mission and the long-term goals that the organisation should be pursued as the basis of its strategic objectives, which leads to the detail internal and external analysis that highlights an organization’s strengths, weaknesses, opportunities, and threats. Thus, the information is compiled to serve as the basis of planning business strategies in which analyst match the strengths of the organisation with the opportunities confronting an organisation (Hanson, Hitt, Ireland, & Hokisson, 2017). The performance of an organization is maximized by adopting flexible planning systems in a complex environment (Dibrell, Craig, & Neubaum, 2014). However, unlike the process, Mintzberg (1994) argues that strategic planning is an oxymoron. It means that strategy could not be planned, mainly because planning is about analysis and strategy is mainly concerned with synthesis. This aims to critically investigate: Do managers always need to engage in strategic planning to ensure successful achievement of organisational goals, taking Huawei Technologies as an example.

Huawei Technologies, which is the world’s second largest Smartphone manufacturer and has been engaged in the strategic planning process (Huawei Technologies, 2017). The organisation has been using the process as it has been helping the organisation in the identification of opportunities emerging within the industry, resulting in the better realisation of the firm’s long-term goals and objectives (Euromonitor International, 2017). Using the strategic management process, the enterprise has formulated its vision and mission. Huawei mission is ‘to satisfy customer’s needs by providing excellent ICT solutions and services in order to consistently create maximum value for our customer’ (Market Line, 2017). In turn it leads to the formulation of long-term goals and objectives of the organisation. The long-term goals of the firm are to occupy the market leadership position within the global smartphone industry (Huawei Technologies, 2017). Once the company formulates its objectives, the strategists within the organisation carry out the external and internal analysis of the organisation (Hanson et al., 2017). Through external analysis, the management of the firm identifies various opportunities and threats that the firm confronting in the market. In addition, the firm conducts the process of internal analysis to determine the unique resources and core competencies of the firm (Johnson, Scholes and Whittington, 2015). The management of the firm then analyses whether it has the desired resources and competencies to capture the emerging opportunities and threats emerging within the market (Market Line, 2017). The strategic planning processes mostly are messy and complex, but it is imperative that leaders understand the importance of strategic planning and decision making for the success of the organization (Klag and Langley, 2014).

The strategic planning process within Huawei Technologies enables the firm to identify opportunities ahead of the rivals and make concentric efforts to capture such opportunities (Hanson et al., 2017).  For example, although the company’s core business is network solutions and smartphones, the company currently earns about 37% of its total revenues through cloud-based services and enterprise solutions (Huawei Technologies, 2017). The firm diversifies into these areas through the process of successful strategic planning, where the firm seeks emerging opportunities within the segment and by establishing its core competencies and unique capabilities, the two market sectors now accounts for a growing portion of the total revenues held by the business enterprise. Furthermore, through the process of strategy formulation and implementation, the enterprise has been able to identify the area in which the company could excel in the year ahead. For example, the company was once using the cost advantage as the means of effective realisation of its long-term goals and objectives. However, due to the cut-throat competition in the market, as the market is being of more price and innovation conscious, the company has been pursuing low-cost innovation as a source of competitive advantage and the better implementation of the firm’s long-term goals and objectives (Cremer, 2018).

However, Mintzberg (1994) believes that the strategic planning process holds less validity, because organisations like Huawei is consistently experiencing an uncertain environment. As the purpose of strategy formulation increases, the strategic planning process makes less sense. Resultantly, managers would rather follow a perfect rationality model than use the process of satisficing. ‘Satisficing’ is the process where the management takes full advantage of the situations (Mintzberg and Waters, 1985). Mintzberg (1994) stresses those strategists at organisations like Huawei must rethink the process by which strategies are created, which in turn means that the way an organization operates its vision should be reconsidered. Accordingly, following the mentioned process, not only might the management waste considerable time and resources, but also in certain cases, the strategic planning process may lead to failure (Mintzberg, Alstrand and Lampel, 2009). Therefore, there are three major fallacies that Huawei strategists could experience while relying on the strategic planning process, which decreased the significance of the strategic planning process. The discontinuities could be predicted, strategies could be detached, and a formalised strategic process could be implemented. In consideration of these three fallacies, Mintzberg (1994) believes that the strategic planning process implemented by organisations is not as effective. Instead, he stressed that organisations like Huawei should adopt the five 5 Ps of strategies include plan, ploy, pattern, position, and perspective, which could help in the better formulation of strategies (Mintzberg, 2000).

Based on the discussions presented in the essay, it could be argued that Mintzberg (1994) has pointed to some of the major weaknesses that strategist in organisations like Huawei Technologies could experience while carrying out the strategic planning process. Although the criticism is effective to a certain extent, it could not take place the strategic planning process. The strategic planning process is still valid, as organisations like Huawei Technologies are using the process to set their long-term directions of the firm and using the strategic planning process to realise the goals that they have thus devised. In addition, as in the strategic planning process, the strategists could take into consideration of the internal and external factors that could contribute to the organisation to achieve goals or could identify the possible challenges to better realisation of the firm’s long-term goals and objectives. 

Reference:

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