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Bryson (1995) believes that strategic planning considers the many divergent beliefs and values within an organization and encourages communication and participation amongst the different factions to promote more reasonable and analytical solutions and decisions. According to Hughes (1997), a strategic plan is the means by which organizations can establish long-term common values, purpose, direction and action. Strategic planning is synonymous with strategic management and means a process, by which the organization plans, operates, controls or monitors and finally evaluates an on-going basis for all its activities and functions.
Strategic planning or strategy formation has been contributed more and more efforts to by managers and academic researchers, rather than strategy implementation (Aaltonen & Ikävalko, 2002), since strategy formation refers to the interpretation and analysis of the changed business environment, threaten from competitors' advantages, the rapid changings and wide diversity of customers' needs and others including government's regulation and law. Furthermore, strategic planning contains the most popular and widely analyzed tool of strategic management (Rigby 1999; Mintzberg, 1994).
The topic of strategic planning, introduced in the early 1960s, made most practitioners and academic researchers shift from how to conduct strategic planning to formulating strategy to criticizing its effectiveness and impact on organizational performance. In a way the cyclical development of strategic planning as a topic can also be seen in environmental changes: the development of turbulent and fast-moving market conditions, and the resulting issues of different management styles. In terms of Bryson (1988), strategic planning was developed to help organizations anticipate and respond effectively to their dramatically changing environments.
According to a McKinsey survey (Dye 2006), fewer than half of the respondents claimed to be satisfied with their company's approach to strategic planning. However, 23% of respondents of the same survey attributed strategic decision making to the formal strategic planning process, and reported that it had a major influence on overall corporate strategy. Moreover, respondents attributed the following key themes to the responsibility of the corporate strategy group: Developing content for strategic plans (78%), managing the process of developing strategy (71%), acting as internal consultants (67%), and identifying key strategic issues for senior management (79%).
The Learning School
The Learning School is strategy development which Mintzberg articulates to be an emergent process, developed over time through experience. Mintzberg (1994) argued that the Learning School was considered as the process of so-called emergent strategies. In this approach, senior management continuously pays attention to the development of the organization, thereby learning about processes that work and those that fail over time. It is with this learning experience that strategy should be derived and strategic planning practices follow directly from it. In addition, the learning approach allows strategists to deal with complex and turbulent environments.
Under the circumstance of the "Learning School", strategic planning could be called strategic programming and promoted as a process to formalize, the consequences of strategies already developed, for instance, provide analysis of what has gone on and prepare scenarios for the future. Strategic planning cannot go hand in hand with synthesis or the creative aspect of generating new ideas (Mintzberg, 1994). Mintzberg suggests the use of an observational approach in planning, whereby it is useful to assess the situation over objective, factual and realistic information and devise a means to obtain the end with an articulation of the intended result. This definition describes intentions rather than ultimate outcomes which in Mintzberg's opinion could involve even more operational consideration. There is a need to isolate the formal procedures that actually gets converted into action, thus interpreting planning to be programming.
The significant question of the idea developed and described by the Learning School is to seek and research the process of how to formulate strategy within the context of organization.
The Learning School views the world as too complex to allow strategies to be developed at once as clear plans or visions. Therefore, strategies must emerge in small incremental steps, as an organization learns.
The Environmental School
The proponents of the Environmental School believe strategy to be a reactive process in which the initiative lies outside of the organization in the external context and not internally.
The Environmental School is a unique theory as it is based on a reactive process. Due largely to circumstances out of one's own control, uncertainty promotes strategy development around contingency. Firms that derive strategy from the environment seek to provide stability for their firm. Nevertheless, they may face times of both uncertainty and periods of calm. Since firms exist within populations of competitors or alternatives, strategy may be formed out of fully understanding own strength and role of their business, firms must be in a position to respond to either positive or negative conditions or face being eliminated. A great deal of emphasis is placed on the leadership within an organization to seek, measure and guide the organization through turbulent times otherwise if this direction is misguided, serious consequences may occur. In terms of the perspective of the Environment School, an event which triggers the firm to use a rational and planned approach to developing strategy, may the crisis be over money, marketing or management. The strategy formulation shifted from an emergent to a more planned approach over time with the degree of planning depending on the personality of the entrepreneur and experience of crisis. Compared to firms in a dynamic environment which has a vast range of possible outcomes; firms that exist in stable markets typically have a limited number of potential outcomes when looking across the planning horizon. Dynamic environments create challenges in planning having a reasonable amount of sound information available to make decisions. When the system is changing, it must readapt and not rely on historical references. Decisions must be made in dynamic situations when feedback is swift and certain.
The Comparison between the Learning School and the Environmental School
This section will concentrate on two significant dimensions including the commons and differences between the Learning School and the Environmental School. Referring to the commons between these two schools, there are two important commons c
The learning school and the environmental school have been concerned less with prescribing ideal strategic behavior than with describing how strategies are made (Mintzberg, Ahlstrand & Lampel, 1998).
Informal planning may be referred to as incremental and adaptive learning. The ends are rarely recorded in a formal document and often go unsaid. However, if announced they are likely to be broad in nature and unspecific in detail. The means develop and evolve over time based on the interaction with the environment. Informal planning has a greater association with uncertainty and unstable environments where less formalization and more flexibility are required.
Strategic planning is described as be at the core of any organization and coping with its challenges is not always easy.