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Thursday, December 10, 2009

Strategic Planning

Strategic Planning - An analysis from view points of Mintzberg and King

1. The way strategic planning originates: Mintzburg states that strategies can originate as specific intentions of the leaders, as deliberate strategies which take a linear path. King, on the other hand states that strategic planning originates from the need to identify best ways to respond to organization’s vibrant environments, and are thus non-linear in nature. She is of the argument that sound exercise of organizational leadership cannot be considered as strategic planning.

I think both of their views might fall true or false in various situations of a non-profit or for-profit sector. For example, a for-profit organization like Microsoft can have strong impacts from its leader, in the way its strategy is built. The main reason behind this is the fact that the leader himself can bring about vibrancy in the current IT ecosystem. Whereas, in the case of, say, Mc Donalds, another for –profit, if the leadership decides to lay out strategic plan to popularize veggie sandwiches, it might not work out, even if it’s eco-friendly. Mintzburg’s view point seems not to hold in the case of non profits, since there is collective knowledge and expertise at the leadership level that calls for staying abreast of changes, as King points out.

2. Future Aspect: Mintzburg articulates strategic planning as what leaders plan to do in future without an emphasis on existing constraints. He assumes that the existing environment is more or less favorable. King on the other hand announces that strategic planning doesn’t attempt to make future decisions. Decisions are made in the present to select the best alternative to cope up with the changes.

Reflecting on the second key difference, Mintzberg’s view on future aspect of strategic planning can be seen in for-profit as well as non-profit organizations. For example, a non-profit organization such as the Open Source foundation may set a strategic plan such that all future applications are web service oriented and on demand based. In the case of a for-profit organization such as Coca-Cola, it cannot make future decisions about its product since the market is highly competitive and constantly changing.

Does nonprofit organizations with larger budgets, and for-profit organizations tend to do more strategic planning?

I don’t think so this statement is correct. I tend to be more supportive, though, of King’s approach that strategic planning arises from the need to face constantly changing business environments. The idea is that, the business needs to opt best alternative in a particular situation. Considering the service orientedness and voluntary nature of nonprofits, they are required to keep up with the changes to deliver what they believe is their mission. This is true for any organization whether it has a large or small budget. Seeing the excellent outcome of efforts put by nonprofits such as Red Cross, UNICEF and various other social service-oriented organizations, its hard to agree that they do not perform strategic planning. For-profit firms tend to do strategic planning more since they are compettitive in terms of making more profit. Even then, all of them do not necessarily do strategic planning in the right way.

1. King K.N.. (1998). Nonprofit World. How are nonprofits using strategic planning [and is it worth their while]?. Copyright Society for Nonprofit Organizations.
2. Mintzberg, H. and Waters, J.,(1985) "Of Strategies, Deliberate and Emergent," Strategic Management Journal, Vol. 6, 257-252

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