Strategic Planning

Most organizations today engage in some strategic planning activities. Higher education institutions and departments almost universally have some sort of goal setting process embedded into the culture. However, strategic plans and the formal processes that lead to their development are a relatively contemporary exercise. Earlier this year, researchers Carola Wolf and Steven Floyd conducted a review of literature related to strategic planning since the 1980s, when the practice gained traction. What they discovered from their analysis was that studies on strategic planning general fell into two separate eras: prior to 1994, when strategic planning research was at its peak, and after 1994, during a steady decline of research in this area.  

In their article for the journal Strategic Planning Research, Wolf and Floyd hypothesized the reasons behind this decline and advocated for both a new emphasis on and different avenues for strategic planning research. They contended that researchers must address the inconsistency of the popularity of strategic planning and the decline of strategic planning research by better understanding why strategic planning is widely practiced and what successful strategic planning is. Their findings and commentary are relevant for those working in an environment that employs strategic planning as a customary way of conducting our work.Strategic Planning 

Strategic planning plays an important role in strategy development, coordination, integration, and in both centralizing and decentralizing organizational decision making. However, Wolf and Floyd reported there is little research connecting strategic planning to overall organization performance. Much of pre-1994 research focused on the correlation between strategic planning and financial performance. As a result, early research had a limited influence on nonprofit sectors such as higher education. The acceptance of those findings, combined with a landmark work by Henry Mintzberg in 1994, The Rise and Fall of Strategic Planning, which suggested that strategic planning resulted in little real strategy, led to a decline in research on the topic. 

In their review of post-1994 scholarship, Wolf and Floyd expanded their scope to include journals where the target audience included not just academics but also practicing managers. The authors defined strategic planning as a formalized, periodic process that provides a structured approach to strategy creation, implementation, and control. Based on this definition, they refined their literature review to exclude other uses of strategy such as in marketing. While analyzing the articles, they developed a framework that illustrated the trends in the research. 

Early research pointed to positive effects on financial performance, but the authors point out that the range of findings is ambiguous and likely related to differences in methodology among the 65 articles they examined. The consensus that strategic planning and financial performance correlated moved the focus of research on to the intermediate effects of strategic planning on decision making, change, and renewal.  

Researchers began to study how strategic planning should be designed to fit organizations’ specific external and internal environments. This led to a new focus on the formality of planning based on organizations’ unique environmental position. External environments, like the complexity, stability, maturity, and/or hostility of an organization’s industry all influence how complex an organization’s strategic planning needs to be. Firms in more volatile external environments use more comprehensive long-term strategic plans. Internally, the size, age, complexity, capital intensity, and stage of growth all influence strategic planning as well. 

As the research focus on formality grew, more studies used surveys distributions to determine whether certain steps had been accomplished by organizations during their strategic planning, such as formulating a mission statement, developing short- and long-term goals, etc. Most researchers used a contingency-theory based framework for their investigation, which focused on firms working through anticipated scenarios in their particular market. 

This led to MIntzberg’s 1994 critique of this research, which emphasized three misconceptions. First was the fallacy of pre-determination, the idea strategic planning was not always effective because firms were unable to anticipate and forecast accurately at all times. Second was the fallacy of detachment, that strategic planning by organizations was limited by their inability to make plans in a stoic-detached way (as was recommended at the time) and yet still create goals and direction that worked for front-line staff. Last was the fallacy of formalization, which criticized strategic planning theory by contending that real managers do not build strategy by constantly participating in formal planning exercises, as was common practice at that time. After this critique was published, research on strategic planning appears less and less in the academic journals that previously covered it. 

However, other investigators were busy redefining the research strategic planning. These researchers brought more socialized and realistic models to the fore, including strategizing as a social practice. For instance, Mintzberg and James Waters developed a theory in 1985 that decision making and action were a result partially of planning but also of the influence of emergent forces, defined as actions within the organization that were not anticipated by the strategic plan. While senior staff controlled planning, emergent forces accounted for the influence of the decisions made by middle- and operational-level managers, who rarely had a voice in strategic planning. This research led to increases in the role of middle managers in strategic planning, as well as a shift from the “what” of strategic planning formulation to the “how” of implementation across organizations. 

Strategic planning departments within organizations also evolved. By the early 2000s, leaders were moving toward facilitating communications about strategic planning across an entire organization, similar to the role many higher education administrators responsible for planning undertake the process today. Modern research also focuses on the mix of formality and flexibility within planning processes and how the relationship among entities in a given process affects the outcomes.  

After analyzing the state of strategic planning research to present, Wolf and Floyd advocated directions for future research. First, that more research be conducted on strategic planning outside of typical corporations, where the majority of previous research occurred. Since strategic planning has become a part of many types of institutions, including higher education, expanding research across industries will broaden the social context of strategic planning. The researchers also consider whether strategic planning roles have been professionalized and if so, what influence this professionalization might have on the process. They hypothesize that large institutions may continue to adopt strategic planning practices despite low satisfaction among managers because these practices have been institutionalized in ways that are similar to religious ritual. They also call for further research connections between the embeddedness of strategic planning within an organization, the legitimacy of their planning practices, and the legitimacy of actions that come from that planning. Furthermore, the authors advocate for a focus on more observational methods of data collection compared to previous works’ common use of secondary data collections such as interviews or surveys. They believe that observational data will shed more light on the social context of strategic planning compared to self-reported data. 

Overall, Wolf and Floyd’s conceptual framework should inspire future research directions. While the article clearly targets business and economic researchers, there are plenty of parallels to new directions for higher education research. Research on strategic planning within higher education has followed a similar evolutionary path, if slightly behind that of business and economics journals. Strategic planning is a common enough practice in student affairs that professionals should begin to consider the utility of a dedicated strategic planning staff (as exists at most university and within some student affairs divisions), or whether and how middle managers should be involved in planning to increase overall effectiveness. Higher education professionals should also examine social contexts within our institutions and how they affect planning practices and outcomes. 

Reference: 

Wolf, C., & Floyd, S.W. (2017). Strategic planning research: Toward a theory-driven agenda. Journal of Management, 43(6), 1754–1788).

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