Organizations carry out internal and external/environmental when creating a strategic plan. For growth and prosperity of an organization, its leadership should be able to appreciate in advance, take account of and take appropriate action with regards to environmental changes.
Decision makers have to determine whether objectives set out during planning are attainable and whether any review of objectives is required. Since environmental analysis provides both realistic and subjective information on the business environment, it can be used to determine strategic and premeditated action on the business environment.
Organizations collect information about the various factors through environmental scans, surveys, interviews and desktop research. Bryson gives general steps used when analyzing environmental factors. Initially one identifies the purpose, participants and time limitations. Scanning activities are then carried out.
Planners analyze and interpret the strategic importance of issues and trends. From this, issues and trends for further action should be collected. Finally, the results are reported and disseminated. There are also a number of tools available for gathering of this information such as SWOT (Strengths, weaknesses, opportunities and threats) analysis. Brainstorming sessions could also be extremely useful.
Examples of interior analysis include the determination of staff attitudes towards the organization, establishment of skills of the organizational workforce, evaluation of the financial position and also asset base of the organization. Examples of environmental analysis include market share evaluation, influence of media determination, political, legal and climatic factors which may affect the organization.
According to Henry (Mintzberg), a strategic plan has various components. These include SWOT, mission, values, vision, forecast, goals, objectives, action planning, implementation process, evaluation and measurement. The first component is a SWOT report which establishes where the organization is in terms of key strengths, weaknesses, strengths and opportunities.
A mission will describe the organization’s purpose. The values describe the organization’s culture and uniqueness. An organization’s vision talks about where the organization wants to be in the ultimate future. Definition of goals which have to be met in a specified period by the organization is important. Objectives are targets to be met in order to achieve the vision, mission and goals. Objectives have to be specific, measurable and also quantifiable.
Action planning involves creating a detailed action plan of how the organization goals should be met. It states the desired results, potential obstacles/barriers and support in terms of resources required for each objective. The implementation details the steps that must be taken and the people who will undertake different functions. Finally, evaluation and measurement will help determine successful meeting of objectives. A balanced scorecard may be one of the ways to do this.
Information system management is essential and should be used by everyone within the organization if they have need. Issues arise whereby the organization does not control access of that information leading to it falling in the wrong hands. Another issue is whereby information about the plan is not well shared with the plan executors. This may derail achievement of planning objectives.