IMPORTANCE OF COMPANY PLANNING

Strategic Planning and Its Importance

Strategic planning is the process of determining the mission, major objectives, strategies, and policies that govern the acquisition and allocation of resources to achieve organizational aims. Strategic planning is a process that generates specific actions that are required to carry out a particular strategy (Thompson & Strickland, 2001).

By definition, thus, the strategic planning process begins subsequent to the adoption of a strategy. The entire strategic process within an organization, however, is a set of highly interrelated components, which function within a dynamic environment. Thus, in the so-called real world, strategic planning will often precede strategy development, because of the cyclical character of the strategic process (Hax & Majluf, 2001).

It is difficult to overstate the importance of strategic planning to companies, because the strategic plan leads the organization in the directions of either success or failure. The problematic issue, however, is the attempt to related strategic planning in a company to specific levels or trends in financial performance. Assessments of the relationship between strategic planning and financial performance tend

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trategy toward a heavy reliance on business-class customers to both pay for the contract and return United Airlines to profitability. The bottom began to fall out of the air transportation market just a year later, when the dot.com collapse began and businesses generally began tightening their collective belts. As Nasser at Ford was to do later, Goodwin and the strategic planning process at United Airlines were inflexible. Goodwin decided to stick with his plan and ride out the rough spot. The rough spot got rougher, however, and then came the terrorist attacks on the World Trade Towers in New York and the Pentagon in Washington, DC. The air transportation industry slumped and United Airlines went into a financial and operational crash dive. Goodwin warned of bankruptcy for United Airlines and the company fired him ("A To-Do List for United's Mr. Fix-It," 2001). There are five generally recognized elements of the strategic cycle. These elements are as follows: (1) organizational considerations, which are concerned primarily with the organizational structure; (2) resource requirements, (3) strategic control, which is concerned primarily with the organization's internal environment; (4) strategic planning, which is concerned
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Approximate Pages = 6 (250 words per page)