Performance Management &

Strategic Planning

Chapter-2

Dr. M Abdur rahman

Strategy !!!
Purpose of strategies & Setting goal
 Strategic Planning

Strategic planning is the art of creating specific

business strategies, implementing them, and evaluating the
results of executing the plan, in regard to a company’s
overall long-term goals or desires. It is a concept that
focuses on integrating various departments such as
accounting & finance, marketing, and human resources
within a company to accomplish its strategic goals. The
term strategic planning is essentially synonymous with
strategic management.
Chandler’s Strategy-Structure
Relationship

Organizational
New strategy New administrative
performance
Is formulated problems emerge
declines

Organizational
New organizational
performance
structure is established
improves
 Chandler’s Strategy-
Structure Relationship
 Strategic planning process

The strategic planning process requires considerable

thought and planning on the part of a company’s upper-
level management. Before settling on a plan of action and
then determining how to strategically implement it,
executives may consider many possible options. In the end,
a company’s management always set and established on a
strategy that is most likely to produce positive results
(usually defined as improving the company’s bottom line)
and that can be executed in a cost-efficient manner with a
high likelihood of success, while avoiding undue financial
risk.
 Strategic planning process
• Strategy Formulation
In the process of formulating a strategy, a company will
first assess its current situation by performing an internal
and external audit. The purpose of this is to help identify
the organization’s strengths and weaknesses, as well as
opportunities and threats (SWOT Analysis). As a result of
the analysis, managers decide on which plans or markets
they should focus on or abandon, how to best allocate the
company’s resources, and whether to take actions such as
expanding operations through a joint venture or merger.
Business strategies have long-term effects on organizational
success. Only upper management executives are usually
authorized to assign the resources necessary for their
implementation.
 Strategic planning process
• Strategy Implementation
After a strategy is formulated, the company needs to
establish specific targets or goals related to putting the
strategy into action, and allocate resources for the strategy’s
execution. The success of the implementation stage is often
determined by how good a job upper management does in
regard to clearly communicating the chosen strategy
throughout the company and getting all of its employees to
“buy into” the desire to put the strategy into action.
Effective strategy implementation involves developing a solid
structure, or framework, for implementing the strategy,
maximizing the utilization of relevant resources, and
redirecting marketing efforts in line with the strategy’s goals
and objectives.
 Strategic planning process
• Strategy Evaluation
A business person knows that success today does not guarantee success
tomorrow. As such, it is important for managers to evaluate the
performance of a chosen strategy after the implementation phase.
Strategy evaluation involves three crucial activities: reviewing the internal
and external factors affecting the implementation of the strategy,
measuring performance, and taking corrective steps to make the strategy
more effective. For example, after implementing a strategy to improve
customer service, a company may discover that it needs to adopt a new
customer relationship management (CRM) software program in order to
attain the desired improvements in customer relations.
All three steps in strategic planning occur within three hierarchical levels:
upper management, middle management, and operational levels. Thus, it
is imperative to foster communication and interaction among employees
and managers at all levels, so as to help the firm to operate as a more
functional and effective team.
How should plan!
Mission statement & Strategy
Mission statement & Strategy
Vision statement & Strategy
Individual performance & Strategy
HR Role & Strategy
 Strategic planning process
benefits
• Benefits of Strategic Planning
The volatility of the business environment causes many
firms to adopt reactive strategies rather than proactive
ones. However, reactive strategies are typically only viable
for the short-term, even though they may require spending
a significant amount of resources and time to execute.
Strategic planning helps firms prepare proactively and
address issues with a more long-term view. They enable a
company to initiate influence instead of just responding to
situations.
 Strategic planning process
Benefits
• Helps formulate better strategies using
a logical, systematic approach
This is often the most important benefit.
Some studies show that the strategic planning
process itself makes a significant contribution
to improving a company’s overall
performance, regardless of the success of a
specific strategy.
 Strategic planning process
Benefits
• Enhanced communication between
employers and employees
Communication is crucial to the success of the strategic planning
process. It is initiated through participation and dialogue among the
managers and employees, which shows their commitment to
achieving organizational goals.
Strategic planning also helps managers and employees show
commitment to the organization’s goals. This is because they know
what the company is doing and the reasons behind it. Strategic
planning makes organizational goals and objectives real, and
employees can more readily understand the relationship between
their performance, the company’s success, and compensation. As a
result, both employees and managers tend to become more
innovative and creative, which fosters further growth of the
company.
 Strategic planning process
Benefits
• Empowers individuals working in the
organization
The increased dialogue and communication across all stages of
the process strengthens employees’ sense of effectiveness
and importance in the company’s overall success. For this
reason, it is important for companies to decentralize the
strategic planning process by involving lower-level managers
and employees throughout the organization. A good example
is that of the Walt Disney Co. which dissolved its separate
strategic planning department, in favor of assigning the
planning roles to individual Disney business divisions.
 Strategic planning process
Benefits
• Wrap Up
An increasing number of companies use strategic planning to
formulate and implement effective decisions. While planning
requires a significant amount of time, effort, and money, a
well-thought-out strategic plan efficiently fosters company
growth, goal achievement, and employee satisfaction.
Additional Resources
• Auditing
• Broad Factors Analysis
• Scalability
• Systems Thinking
 Goal of Strategic planning

Strategic planning is an organizational

management activity that is used to set
priorities, focus energy and resources,
strengthen operations, ensure that employees
and other stakeholders are working toward
common goals, establish agreement around
intended outcomes/results, and assess and
adjust the organization's.
 Goal of Strategic planning
What Strategic plan ?

A strategic plan is a
document used to
communicate with the
organization the
organizations goals,
the actions needed to
achieve those goals
and all of the other
critical elements
developed during the
planning exercise. 
Goal of Strategic planning

What is strategy map?

A strategy map is a simple graphic that shows a
logical, cause-and-effect connection between
strategic objectives (shown as ovals on the map). It
is one of the most powerful elements associated
with the balanced scorecard methodology, as it is
used to quickly communicate how value is created
by the organization. Strategy mapping can vastly
improve any strategy communication effort. 
What is strategy map?
Five steps in human resource
planning
The five steps are preparing a human resource
inventory of the organization's employees,
•Preparing a job analysis
•Assessing future demand
•Assessing future supply
•Establishing a plan for recruiting,
•Hiring, educating, appraising, compensating, and
scheduling employees.
 Human resource Strategy
planning
• Human resource planning is a process that identifies current and
future HR needs for an organization to achieve its goals. Human
resource planning should serve as a link between human resource
management and the overall strategic plan of an organization.
Ageing workers population in most western countries and growing
demands for qualified workers in developing economies have
underscored the importance of effective human resource planning.

• Human resource planning includes creating an employer brand,

retention strategy, absence management strategy, flexibility
strategy, (talent management) strategy, (recruitment) and selection
strategy
 What is strategic business
management?
Strategic management is an essential component of
businesses. It refers to the formulation and implementation of
the goals and initiatives involved in the strategies, laid out by
the stakeholders of an organization. In simpler words, to ensure
wise decision-making processes, it is important that strategies
are in place to support the business functions and operations.
Strategic management therefore entails evaluating business
goals, the organization's vision and objectives as well as the
future plans. In addition, a strategic management process is
employed to ensure that the business runs effectively and
efficiently. Communicating this strategy internally and externally
is crucial for success, in order for both staff and the organization
to understand the purpose and direction along with external
parties understanding what you as an organisation stands for.
 Strategy Development
Is a process of defining ‘where an organization is going’ in
the future; 
•Provides an organization with an opportunity to critically
examine its vision and assess how it is progressing towards
that vision; and 
•Challenges the organization to make trade-offs in
competing initiatives – to choose what to do and what not
to do. It also requires the organization create a 'fit' among
activities. An effective strategic planning process will result
in the creation of a meaningful and realistic strategic plan
geared toward achieving results, and the creation of the
environment necessary to encourage and support
stakeholder commitment and sustain long-lasting change.
 The role of strategic business
management
Strategic management is a broad term that includes
innovative thinking, a strategic planning process and
operational strategising. Strategic business management,
more specifically, relies largely on research. It is imperative
that for a business strategy to be successful, customers’
opinions, employees’ contribution and the industry’s best
practices are all taken into account. A common way to
encourage strategic business management, is to incorporate
a lot of planning into board meetings, have trustees with
valued and varied experience, and to carefully consider the
impacts of decisions on each business function within the
organisation. It is important to be flexible and adapt to
changing environments and demands.
 The Strategy Engagement

Our business strategy engagements are delivered either

self-paced, virtual/ live, instructor-led, or a combination
that fits your needs. Programs typically include:
•Assessment 
•Pre-work
•Live or virtual learning  sessions
•Digital business simulation
•Application tools
•Measurement and impact studies
Strategy-Formulation Analytical
Framework
SWOT Matrix

SPACE Matrix

Stage 2:
The Matching Stage BCG Matrix

IE Matrix

Grand Strategy Matrix

SWOT Matrix

Four Types of Strategies

Strengths-Opportunities (SO)
Weaknesses-Opportunities (WO)
Strengths-Threats (ST)
Weaknesses-Threats (WT)
The Six steps to develop a
strategic plan
• Target
• Align
• Assess
• Map
• Execute
• Monitor
 How the HR function
contribute strategic plan
& Success ?
THE END