le.
As the description of the strategic cycle indicates, strategic planning is closely associated with an organization's external environment. It is, thus, necessary for the strategic planner to (1) know of what the external environment of an organization consists, and (2) understand how an organization's external environment affects the strategic planning process.
In the late 1970s, Henry Mintzberg (1979, p. 39) identified an external coalition as a description of an organization's external environment. Included in this external coalition were (1) owners, assuming that the organization is a publicly held company, (2) suppliers, (3) unions, and (4) the general public. While retaining this general concept, William Glueck (1988, p. 110) expanded the definition of an organization's external environment substantially. This expanded definition of the external environment included economic factors, governmental and legal factors, market and competitive factors, supplier and technological factors, geographic factors, social factors and other factors.
A firm's external environment, thus, is composed of an incredibly complex and diverse array of factors. Unfortunately, all of these factors have a dynamic characteristic. The one thing that strategic planners can count on is that the inputs on which they rely will not remain stable for very long; over the short term, perhaps, but over the long term, certainly not.
Many researchers contend that a firm's strategic planning must necessarily begin with the firm's objectives. The general contention is that, only when objectives have been established and goals set for the accomplishment of these objectives, can strategy planning be effective.
Michael McCaskey (1974, pp. 281 291) challenged the assumption that objectives and goals must be set before strategy planning can be effective. He contended that the dynamic character of the environmental factors dictated against strateg...