The world is advancing continuously into the technological era, this has become apparent as there are many challenges that organisations are faced with. There has been a growing need to respond timeously to various changes. A crucial aspect that organizations (leaders) faced with. The business environment is ever changing and organizations are required to adapt to the idea of changes, as this d
distinguishes between a thriving business and bankruptcy. How well the organisation adjusts to the external changes and it copes with change, will compel the organisations management to take a systems view to the business.
Changes are likely to continue globally at the cutting-edge course of increase, the future of worldwide business environment will require an even more through ability to have a look at the forces of exchange and anticipate viable answers to potential problems.
A widely recognised technique for dealing with future adjustments in organisations has been strategic planning. Business’s should adapt and address change, it has no longer proven its capacity to inform business leaders about massive political, environmental, economic and societal changes. An effective approach has emerged in scenario planning, scenario planners propose different scenarios that can cover particle occurrences. Scenario planning has the ability to anticipate future occurrence and can be a powerful tool if used effectively.
This technique opens the organisations eyes to future landscape. The focus on lengthy and short-term stories are used to determine the future. Organisations (planners) keep in mind paradigms that project current thinking. Scenario planning encourages organisations (leaders) to assume the unthinkable, it has been identified that scenario planning is a beneficial way to conduct strategic organisational planning.
2 Problem statement and purpose of the study
“Scenario’s offer future pictures of certain subject’s development where these pictures are built by qualitative and quantitative elements and interlinking between them” (Foster; 1993).
This study offers the idea of scenario planning. A detailed process of scenario planning will be discussed based on a mythological platform. It will introduce multiple styles of scenario’s which might be respected due to the improvement of the entrepreneurial environment will be discussed.
The study pertains to expand the use of scenario planning. A large number of organisation make use scenario planning. The questions that will attempt answering are: How efficiently is scenario planning being used within organisations and is there any limitations to scenario planning?
In this study, scenario planning will be investigated e.g. the strategies or techniques that are currently being utilised. Are the existing and methods or techniques by used efficiently by policy making bodies? In this study scenario planning will be investigated and how can we use scenario planning effectively and effienctly from a strategic management perspective
3 Literature review
The initial step in strategic management is a proper vision statement formulation. An effective formula for strategic management is consistency, dedication and time for any organisation to thrive.
Rational planning horizon is centre termed, it is decided mostly by the character of the core business. Strategic goals are derived collectively with a fundamental approach represent the strategic base, this could be in the form of a basic scenario.
The basic scenario describes the shift of the organisation in the direction of the finish position on the basis of notable records, stakeholders attitude and recourse disposal. The simple scenario design which has been explained as certainty and different situations are not taken into account. The managerial practice is to foresee risk decision making. The development in future may also vary from the contemporary view of that nature, this should be taken into consideration.
3.1 Definition of strategic management
“Strategic management is the process where managers establish an organisations long-term direction, set the specific performance objectives and develop strategies to achieve these objectives in the light of all the relevant internal and external circumstances and undertake to execute the chosen action plans “(Louw; Venter 2013).
The steps in strategic management:
• Specify an organisation’s objectives.
• Developing policies and plans to achieve objectives.
• Allocate resources to implement policies.
Strategic management is a mixture of strategy implementation and strategy formulation. Strategic management gives overall direction to an organisation.
Strategy formulation and Strategy implementation involves:
• Performing a situation analysis both internally and externally.
• Goal setting and evaluation, including strategic business objectives, crafting a vision statement, tactical objectives and corporate objectives.
• Develop a strategic plan in order to achieve the objectives.
• Sufficient resources are required to be allocated (time, financial,
• Establishing a chain of command.
• Specific processes or tasks need to be assigned to specific individual or groups who are responsible for the tasks assigned.
• The process must be managed efficiently and effectively, these results are monitored and compared to benchmarks set by the organisation.
Components of strategic management
There are five main components in strategic management that will be discussed.
? Defining the business
The organisation’s business and development of a strategic mission is required to be defined.A mix of organisational activities and the scope of an organisation should be well thought. The organisation should consider what markets they believe they can be in and which target group the organisation can serve.
? Establishing strategic objectives
An organisation’s, specific performance targets need to be set at all levels of management and required to be incorporated into the organisation’s structure to determine the success of an organisation. Formal objectives are established to direct the organisation is heading towards and also guards against confusion of what needs to be accomplished.
? Formulating strategy
Strategic management reveals how focused the targeted results will be accomplished e.g. General electric opinion on the issue “a statement of what resources are going to be used to take advantage of which threats to produce a desired result” (Wulf, 2010).
? Strategy implantation and execution
Getting individuals and organisations sub-units to execute their task efficiently is the next step in strategic management. Strategy needs to be put in place. It stimulates individuals to achieve their goals, have commitment and pride in the organisation.
? Evaluation of strategic performance and making corrective adjustments
Strategy implementation and formulation is a once for all time undertaking corrective adjustment under certain circumstances is necessary. New ideas and study should be tested i.e. ‘what works and what doesn’t ‘is through a trial and error basis.
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The definition of strategic management has been discussed in this section above. Strategic thinking would be advantageous in terms of strategic management. These five points should be kept in mind:
• The questions that an organisation should ask: ‘what we are trying to do and what are we going to achieve’.
• How the organisation does responds to change; the opportunities and perilous tendencies.
• What purpose does it give management in the organisation to complete requests for funding capital and new staff?
• The strategy co-ordinated; relating choice making achieved through managers throughout the organisation.
• The proactive preference in accordance to reactive positive that it gives the organisation.