Public Management and Administration - Owen E.hughes

134 Public Management and Administration
is an improvement in that it includes multi-year projections of future sales. This
made some sense in the immediate post-war period with ‘high market growth,
fairly predictable trends, firms with essentially a single dominant business, and
relatively low degree of rivalry among competitors’ (Hax and Majluf, 1984,
p. 11), but is limited if these conditions are not met. Long-range planning does
not work if there is change in the external environment or strong competition,
as the projections are not likely to be met.
There are three forms of strategic planning identified by Hax and Majluf and
these have some points in common. All identify an organizational mission, perform
some environmental scan, specify a set of objectives and produce a strategic
plan to achieve these objectives.
The first kind of strategic planning is business strategic planning. This began
in the 1960s, and is where the concepts of mission and environmental scan or
analysis first appear. These can be explained briefly.
The mission of the business includes a clear definition of current and
expected business scope, products, markets and expectation over a period of
a few years. The mission involves consideration of what business the organization
is in.
The environmental scan involves the detailed assessment of the organization’s
internal strengths, weaknesses, opportunities and threats. This would
include items inside the organization: the skills of workers, managerial capabilities,
type of plant, financial structures, the constraints of government and
the like. However, the real advance is the undertaking of a dispassionate analysis
of the external environment, including: market structures and trends, including
other countries; the extent of technological change; threats from similar
products or substitution; the capabilities of competitors; anything which affects
the very existence of the organization.
Objectives are more specific aims resulting from the mission and environmental
scan. Elements of strategy at a higher managerial level become objectives
at a lower one, as Ansoff argues (1988, p. 54):
Objectives are a management tool with many potential uses. In the operating problem
they can be used for establishing performance standards and objectives for all organizational
levels, for appraisal of performance, and for control decisions. In the administrative
problem they can be used to diagnose deficiencies in the organizational structure. In
our main area of interest, the strategic problem, objectives are used as yardsticks for decisions
on changes, deletions, and additions to the firm’s product-market posture.
From the mission, environmental scan, and specified objectives, a business
strategy plan is derived for both the short and longer term, combined with
resource allocation and performance measures.
The second form of strategic planning is corporate strategic planning. This
emerged in the 1970s due to ‘increased international competition, changing
societal values, military and political uncertainties, discriminating buyers, and
economic slowdown’ (Toft, 1989, p. 6). Corporate strategic planning is more