![]() ![]() However, the thought processes in undertaking planning (as described in the opening paragraph) are essentially the same whether the organization is large or small. Our focus in this article is on formal planning processes in such complex organizations. Because many managers must be involved in decisions requiring coordinated action, informal planning is almost impossible. Most of them use the product/market division form of organizational structure to permit decentralized decision making involving many responsibility-center managers. Large, diversified corporations, however, offer a different setting for planning. The number of key executives involved in such decisions is usually small, and they are located close enough for frequent, casual get-togethers. Even in relatively large but undiversified corporations, the functional structure permits executives to evaluate strategic alternatives and their action implications on an ad hoc basis. They need no elaborate, formalized planning system. The president and his handful of managers get together frequently to resolve strategic issues and outline their next steps. In smaller companies, strategic planning is a less formal, almost continuous process. To begin implementing the selected strategy (or continue a revalidated one), management fleshes it out in terms of the actions to be taken in the near future. Management may draw up several alternative strategic scenarios and appraise them against the long-term objectives of the organization. The widely accepted theory of corporate strategic planning is simple: using a time horizon of several years, top management reassesses its current strategy by looking for opportunities and threats in the environment and by analyzing the company’s resources to identify its strengths and weaknesses. ![]()
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