Ludwigshafen University of Business and Society

MBA Internationale Betriebswirtschaftslehre

– International Business Management

Master’s thesis

Thesis title

Strategic Planning as a Complex Managerial Tool

Submitted by: Marwa Labcir

632973
C2 21
68159 Mannheim

Submission date: 15.06.2020

First Supervisor: Prof. Dr. Rainer Busch

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Sworn declaration/ Blocking notice

Sworn declaration

Name: Marwa Labcir

Student ID Number: 632973
Submission Date: 15.06.2020

“I hereby affirm that I have completed this Master’s thesis ‘Strategic Planning as a
Complex Managerial Tool’ on my own, without receiving prohibited assistance, and I
have used no other materials or resources other than those cited here. I have clearly
marked all places where language or ideas have been taken directly or indirectly from
other sources. This thesis has not yet been submitted to an examination authority in
the same or similar form.”

________________________ __________________________

Place, Date Signature Student

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Table of Contents
Sworn declaration/ Blocking notice ........................................................................... 1

List of figures ............................................................................................................. III

List of tables .............................................................................................................. IV

List of Abbreviations.................................................................................................. V

Dedication.................................................................................................................. VI

Acknowledgment...................................................................................................... VII

Abstract ................................................................................................................... VIII

1 Introduction ...................................................................................................... 9

1.1 Research Problem ........................................................................................... 9

1.2 Research Questions....................................................................................... 12

1.3 Research Design ........................................................................................... 15

1.4 Structure of the Thesis ................................................................................... 16

2 Literature Review ........................................................................................... 17

2.1 Concepts of strategic management ................................................................ 19

2.2 Strategic planning as a complex managerial tool ........................................... 26

2.3 Evaluation of a strategic planning process ..................................................... 34

2.3.1 Factors of strategic planning process efficiency ................................... 34
2.3.2 Barriers to the strategic planning formation process ............................ 37

2.4 Strategic Planning Formation Process ............................................................ 49

2.5 Strategic planning and Innovation ................................................................... 60

2.6 Design thinking towards a better strategy ....................................................... 62

2.7 Economic growth for organizations ................................................................. 65

2.7.1 General concepts of economic growth ................................................. 65

2.7.2 Measuring economic growth ................................................................ 67
2.7.3 Economic growth and small businesses .............................................. 68
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2.7.4 Growth of small businesses .................................................................. 69

2.8 Linkage between strategic planning and economic growth.............................. 72

2.9 Impact of strategic planning on organizational performance............................ 73

2.9.1 Impact of strategic planning on the financial performance..................... 74
2.9.2 Impact of strategic planning on competitive advantage ......................... 75

3 Empirical study............................................................................................... 78

3.1 Research Setting ........................................................................................... 78

3.2 Methodological Framework ............................................................................ 79

3.3 Data collection ............................................................................................... 79

3.4 Data Analysis ................................................................................................. 85

3.5 Main findings ................................................................................................. 86

4 Practical Implications..................................................................................... 94

5 Conclusion ...................................................................................................... 98

List of Cited Literature ............................................................................................ 101

Appendix.................................................................................................................. 115

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List of figures
Figure 1:The impact of strategic planning on organizational performance ................... 17
Figure 2: Components of strategic management ....................................................... 115
Figure 3: Key concepts of the strategic management process ................................... 115
Figure 4: SWOT analysis........................................................................................... 116
Figure 5: PESTEL analysis........................................................................................ 116
Figure 6: The five stages of organizational growth .................................................... 117

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List of tables

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List of Abbreviations

SWOT Strengths, weaknesses, opportunities, treats.

SPFP Strategic planning formation process.

GDP Gross domestic product.

SME Small- Medium Enterprises.

R&D Research and Development.

GEM Global Entrepreneurship Monitor.

VC Venture Capital.

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Dedication
To my dear mom:

An inexhaustible source of tenderness, patience and sacrifice. Your prayers and

your Blessing have always been of great help to me throughout my life.

To my dear dad:

During all these long years, you believed in me. You have always been by my side
to listen to me, support me, comfort me, and encourage me.

To my dear brother Hamza:

No word can describe how proud I am of you. You have always been my idol.
Thank you for always pushing me to be the best version of myself.

Dear parents, dear beloved brother:

No dedication can express all the respect and the love I have for you.

This work is only the fruit of many sacrifices you have made for me.

May Almighty God preserve you and grant you health, long life and

Happiness.

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Acknowledgment

First and foremost, I would like to express my sincere thanks to, Prof. Dr. Said Youssef,
the exchange program manager, as well as the Director of the National School of Busi-
ness and Management of Casablanca, Mr. Smail Kabbaj, for giving us the opportunity
to benefice from this double degree exchange program as part of the partnership with
Ludwigshafen University of Business and Society, and supporting us during all our dif-
ficulties.

I would like to thank in particular, Prof. Dr. Rainer Busch, and the entire pedagogical
team at the National School of Business and Management and Ludwigshafen Univer-
sity of Business and Society for all the quality education, the effective support as well
as their availability they provide us with, that contributed in the realization of this work.

Many special thanks to Prof. Dr. Karim Gassemi, who introduced us to the Strategic
Management. I wouldn’t develop any passion for this field, what pushed me to choose
“Strategic Planning as a Complex Managerial Tool “as topic for my master’s thesis,
without attending his course.

Finally, I would like to express my thanks to Mrs. Eva Nefen, who was always available
to answer all our questions.

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Abstract

Strategic planning is becoming more crucial to enterprises in their management

process. However, in the ongoing generation of innovative knowledge, especially
with the rapid changes and significant fluctuations of the market conditions,
managers and executives should invest more in this process to set an effective
strategic plan. This research aims to investigate the strategic planning first as a
complex managerial tool, and then study its effect on the overall performance of an
organization. Therefore, the case study of an Egyptian start-up operating the
renewable energy industry was conducted in order to test the hypotheses extracted
from current researches regarding this topic. Results showed that strategic planning
is very beneficial to organizations. It enables firms to achieve satisfying results, and
competitiveness over their rivals. However, it is very important to make it flexible and
adaptive to realize the desired outcomes. Strategic planning should be aligned with
environmental fluctuations as well as innovation, which is also vital for companies in
order to perform and survive, especially when it comes to small and medium sized
enterprises.

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1 Introduction

1.1 Research Problem

Strategic planning is a basic framework and reasoning for deciding an organization's
focus; it also sets out the criteria by which each company can better determine what to
do and how to do it. Otherwise stated, it is a method for developing and explaining in
tangible terms a better future and choosing the best means to achieve the desired
results. Bryson et al. (2018, p. 317) define strategic planning as a calculated, well-
designed and well-organized effort that aims to produce fundamental decisions and
actions that form and guide what an organization is, what it does, why and how it does
it. Bryson et al. add that strategic planning can be and often constitute a part of the wider
practice of strategic management that associates planning with implementation of the
strategy on the current situation basis.

Changes in business environments would always push businesses to continually review

their performance strategies. Therefore, using an effective strategic management is a
must for organizations in order to remain competitive over their competitors, and ensure
their survival. According to Wauters (2017, p. 13), strategic management is the ongoing
planning, tracking, review and assessment of all requirements that an organization needs
to achieve its goals and priorities. In the same lines, Poister (2010, p. 247) defines
strategic management as a global image approach that combines futuristic and
innovative thinking, objective investigation and subjective assessment of ethics and
principles, aims and objectives, as well as an organization’s priorities, in order to plan a
future destination and sequences of action that aim to ensure the strength, efficiency and
capability to enhance the produced added-value. According to him, strategic
management is concerned with guaranteeing that strategy is well-implemented and
encouraging strategic learning, thinking and acting on an actual condition base.

Measuring success has also a major impact in promoting the accomplishment of the
goals of an organization and the efficacy and efficiency of the strategic planning process.
According to Richard et al. (2009, p. 719), measuring performance is indispensable in
permitting investigators and executives to evaluate and asses the specific actions of
organizations and managers, where they are positioned regarding their competitors, and
how they progress and perform over time. In order to determine a corporate body's level

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of success, the existing strategic strategies has to be formulated in relation to the

company's performance on all fronts of operations.

One of the crucial components of the strategic management process, is strategic

planning. Strategic planning aims to standardize the goal framework, situation analysis,
alternative evaluation, execution and assessment processes, which allow an
organization to achieve its objectives and goals. A very inclusive definition is “strategic
planning attempts to structure the processes that enable an organization to attain its
goals and objectives” (Tapinos et. al. 2005, p. 371). The strong link between strategic
planning and success improvements was claimed to be very advantageous for
organizations. Stockwell (2016, p. 35) stressed in his investigation, further attention to
the need for organizations to match their approaches with their success monitoring
systems. He claims that strategic planning is, at its core, a complex tool that can be used
by organizations in order to control where they are (current situation), where they want
to be (desired destination), and how to get there (actions to be undertaken). It is the main
instrument used to achieve objectives and remain successful, high-performing and
competitive. Managers who disregard strategic planning endure the risk of not matching
their expected and desired ends.

Strategic planning process is considered to be the first stage of strategic management

and creates the basis for the other stages. According to Hunitie (2018, p. 324), strategic
planning is a cooperating procedure between executives, leaders and followers with the
goal of achieving common objectives. Likewise, Betz (2016, p. 96) sees strategic
planning as an elementary competence that is very important to leader’s success. It was
regarded as essential for leaders. This skill raises the forecast of organization’s future
and take actions that allow to realize the planned goal. Expressed as hypothesis:

The more the organization plans strategically (e.g.” when the firm defines its mission,
vision and goals”), the more it achieves its objectives and goals (e.g.” increase sales,
market share, profitability, etc..”).

"Without a strategy, an organization resembles a ship without a rudder, going around in

circles. It resembles a tramp; it has no place to go."- Joel Ross and Michael Kami
(Shashanka, 2018, p. 102). These statements underline the significance and the need
for thorough, systematic and innovative strategic planning for each organization seeking
to sustain competition in the ever-changing global competitive market climate. In terms
of the link between strategic planning and competitive advantage, Hunitie (2018, p. 322)
states that strategic planning enhances organizational sustainable competitive

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advantage through not only its strategy but also its vision, values, culture, climate,
leadership, structure, and systems.

The degree of competitiveness of an organization is related to the formulation of their

business strategy. An understanding of factors that make the organization more
competitive is therefore essential in order to develop and set an efficient strategy. Every
organization must identify and evaluate the environment in which it competes before it
can set strategy. As indicated by De Lorenzi Concellier et al. (2014, p. 612), vital
management refers to an arrangement of administrative decisions and activities that
decide the long-haul performance of an organization. It includes environmental filtering
(both outside and inside), strategy definition (vital or long-range arranging), strategy
implementation, and evaluation and control. They emphasize the breaking down and
assessing of outside circumstances and threats in terms of an organization's qualities
and shortcomings.

Regarding the relationship between aspects of the strategic planning process

(formulation, implementation and evaluation) and the organizational financial
performance, divergent interpretations appeal to exist (Chinyamurind et al., 2018, p. 3).
A stream of researches proposes that strategic planning process’ aspects are connected
to performance metrics within an organization (Arabzad et al. 2014, p. 803). Within
another context, Efendioglu and Karabulut (2010, p. 6) found a positive link between
strategic planning (the occurrence of missions, and the participation of top executives)
and the organizational financial performance. However, other researchers state a
negative or absente correlation to occur between aspects of the strategic planning
process and financial performance. For instance, according to Owolabi & Makinde (2012,
p. 32), a proper use of the strategic plan process does not automatically outcome in
superior performance, though, they claim that organizations that realize better
performance are more expected to adopt strategic planning. In addition to that, they state
that even though strategic planning process helps the organizations to identify the
needed opportunity to examine environment factors more properly and therefore firms
become able to plan for any eventuality that may affect the plans, some events can
negatively impact the performance of the organization and therefore it can’t be claimed
that strategic planning automatically enhance the financial performance. This can be
expressed as many hypotheses:

The more the organization is financially performant (e.g.” realize high profitability,
increase in the income, etc..”), the more it is expected to plan strategically (e.g.” planning
on the basis of collected information from environment assessment”).

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While these assertions are generally accurate, Mufudza (2018, p. 3) ascertains the
existence of a positive link between environmental scanning and organizational financial
performance. Yet, analyzing the environment is not considered sufficient to ensure this
performance, the information collected from the scanning must be aligned with the
strategy and the strategic planning process. Sometimes, unusual circumstances occur
when certain firms gain not because they had any policy in place but because they only
benefited from certain unexpected external environment conditions. Nevertheless, and
consistent with the need to adapt and continually revisit strategy, it is important to
remember that if a sound plan is not adequately executed, it will not automatically
translate into desired performance targets. To produce successful results, both plan and
execution have to be good and timely. In other words:

The more the strategy is adapted to the environment (e.g.” when the organization takes
in consideration the data gathered from scanning the environment and take corrective
actions”), the more the organization grows (e.g.” the firm gains competitive advantage
and generate important profit”).

The main objective of this research is to provide a better understanding of strategic

planning, as a complex managerial tool, and how it can impact the business-unit
performance. This master’s thesis will focus more on the impact of strategic planning on
the performance of start-ups. Such managerial basic concepts are fundamentally valid
for all industries globally and, as predicted, management is no less subject to the
complexities of those tendencies. Strategic planning, like other business-focused
management strategies, can be adapted given the disparities between profit and non-
profit organizations, small and large companies.

1.2 Research Questions

Executives and managers are faced to many challenges regarding turbulence of
environments where their organizations are operations. While most of public
management theories are based on certainty, predictability, and constancy of the
environment. The environment is becoming progressively more complex and
unpredictable and uncertain day by day. Products, markets, business processes, and
the entire industry business environment is changed and influenced by new
technologies. The traditional approaches of strategic management repose on analyzing,
predicting and controlling complex behaviors by executives; but today’s world managers
is changing, uncertain, unpredictable and even uncontrollable. In other terms, while

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traditional science is focused on analysis, prevention and control, modern science

focuses on disorder and complexity (Khashei and Ashofteh, 2016, p. 2612).

The aim of this research is to investigate the impact of strategic planning, as a complex
managerial tool, on the organizational performance. To this end, this work will shed the
light on the problematic of the use of strategic planning in organizational top
management, considering it as a procedure in the decision-making process that leads to
match companies’ expectations with their achievements, and effects the organizational
performance in a whole. This thesis will be explaining not only on the impact of strategic
planning on the organizational performance, but also a profound description of an
effective and modern strategic planning process and its components, that keeps
companies growing and progressing.

According to Maleka (2014, p. 22), strategic planning is considered as a prerequisite for

sustainable competitive advantage on organizations He added that competitive
advantage is the reason behind great organizations keep ahead of their rivals.
Organizations that remain having a competitive advantage, achieve better financial
performance in comparison with other businesses in the same industry or at least better
than the industry average. However, there may some organizations that are able to
realize it without setting a systematic strategic plan, but for most of the players out there
it is very important to plan strategically, by analyzing, creating, implementing and
monitoring, and repeat this process continuously. It is not certain that businesses will
ever attain competitive advantage conducting strategic planning, but it is an
indispensable process for organizations. The strategic planning process can assist to
see things from wider viewpoint. Johnson et al. (2008, p. 12) claim that businesses are
independent from their finances, marketing or other operations functional areas in order
to achieve a competitive advantage, because the supervisors of each department usually
try to see things only from their particular position, which can be very narrow angle for
the whole organization to rely upon. Only the executives and CEOs that are qualified as
strategic planners who can make a whole image of the company and its surrounding
environments, can take the strategic decisions that make the competitive advantage
achievable.

Therefore, the following research question can be generated:

Does strategic planning contribute in achieving a competitive advantage for

organizations?

Expressed as a hypothesis:

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The more the organization plan strategically (e.g.” the firm sets strategic plans and
making well-designed decisions”), the more likely it is to attain a competitive advantage
(e.g.” when the company is well positioned and more competitive than rivals”).

From another point of view, Khoshtaria (2018, p. 87) states that businesses that
concentrate on a strategy that is based on a formal strategic planning and analytical
techniques, realize better indicators in terms of overall performance, than those less
focusing on this type of strategy. Khoshtaria adds that a formal strategic planning refers
to a balanced and complete strategic planning process, clearly formulated, that consists
on the following elements: identification of the goal, formulation of the strategy and its
evaluation. Accordingly, executives should be engaged in strategic planning process in
order to be performant. Thus, the following research question appears:

To what extent the clarity and the formality of the strategic plan influence the
performance of the organization?

Expressed as hypothesis:

The more formal and clearer is the strategic plan (e.g.” formulating a balanced and
formal strategic planning process”), the more performant is the organization (e.g.”
realize financial performance and gain competitive advantage”).

According to Arend et Al. (2015, p. 1742), the literature about whether strategic planning
damages or enhance the innovation of employees, shows a tension existing. A
communal statement says that a trade-off rises when a company performs a strategic
planning process: the organization enhance its performance but mislays the innovative
spirit due to the inflexibilities of the planification process, and this is what makes strategic
planning a complex managerial tool. A counter statement claims that planning
strategically contribute in increasing flexibility in many contexts, by making the business
more responsive, through proficiencies formed in associated processes. Therefore, the
positive or the negative effect of a bureaucratic process like strategic planning on
creativity depends on how employees understand the process; whether an enabling or
a forced tool. A research question is derived from the cited statements:

Does the strategic planning process impede or enhance the innovation?

Expressed as hypothesis:

The more the organization plan strategically (e.g.” when the company applies a rigid and
strict plan to follow”), the less innovative it becomes (e.g.” a decrease in the number of
new ideas produced within an organization”).

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Strategic planning as part of strategic management process, in the context of complex

organizational environments, does not follow the traditional logical process of developing
a strategic plan and then executing it. Making decisions and their application is these
contexts are constantly influenced by non-linearity and uncertainty (Meyer Junior,
Pascucci, & Murphy, 2012, p. 23). According to them, the interpretation of the reality,
creativeness and innovation are most crucial factors for creating an efficient strategy in
the context of complex environments. Khashei and Ashofteh (2016, p. 2617) add that in
more complex environments, strategic management struggles to, in one hand adapt the
creativity and the innovation with the limit of chaos, and on the other hand maintain the
smoothness of the execution of the strategic plans. Managers therefore should focus on
the creating a flexible strategy that allows creativity of managers, provides a domestic
atmosphere that is based on mutual cooperation between managers and senior
executives, make the decision-making process decentralized, and thus, to better adapt
to changes before the environment forces the organization to change accordingly, the
following research question can be derived:

What are the factors that make a strategic plan efficient?

In other terms:

The more flexible and adaptive is the strategic plan (e.g.” the pre-determined plans can
change in function of the current situation”), the more efficient it is (e.g.” the strategic
plan allows the organization to achieve its goals and objectives”).

1.3 Research Design

For this master’s thesis which is designed to investigate the relationship between
strategic planning, as a complex managerial tool, and the performance of the
organization, a qualitative approach has been chosen, therefore, the case of an Egyptian
start-up will be studied.

According to Yin (2014, p. 6), the qualitative approach permits to conduct an in-depth
study about a wide-ranging selection of topics. He adds that qualitative researches have
become nowadays a mainstream method of research in many diverse theoretical and
professional arenas. Qualitative research method represents an attractive, fruitful and
productive way of doing research.

The qualitative case study approach is a method of research that eases the investigation
of a phenomenon within its context by using a diversity of data collection sources. This
guarantees that the research problem is not explored through only one angle, but rather

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a wide range of lenses which provides the revelation and understanding of multiple facets
of the phenomenon (Baxter and Jack, 2010, p. 544).

A single case study method is a research methodology in the social and life sciences
which involves an up-close, in-depth, and thorough analysis of a particular case. A single
case study is a method that reposes on presenting one case, through meticulously
observing, exploring and measuring variables and the links between them, and in some
cases by analytically deploying certain variables and measuring the effect on other
variables. The aim of the research is to be able to attain truthful conclusions regarding
the relations among variables (Nock; Michel; Photos, 2007 p. 339). The researcher
through a single case study approach, can interrogate old theoretical relationships and
explore new ones. This also make the researcher to get a deeper comprehension of the
issue.

1.4 Structure of the Thesis

In order to answer to the previously defined research questions, this master’s thesis will
be divided to 4 main chapters. After defining the research problem and research
questions, describing the research design and presenting the structure of the thesis
through this introduction which represents the first chapter of this study, the second
chapter “literature review “ will represents a discussion of the literature along the streams
of research, previous researches’ findings and debates, as well as a better
understanding of the basic concepts relevant to strategic planning. A research model
that reflects the relationship between the strategic planning process and the
organizational performance will be designed. In the third chapter, “empirical Study”, the
methodology of work chosen for this study will be explained as well as an interpretation
of the results obtained and the main findings. The last chapter “practical implications”,
will be dedicated to practical transfer, some examples and case illustrations will be given
in order to conclude managerial consequences and implications.

As last part, this thesis will finish by a conclusion in which there will be an opening to
future researches and conclude with some recommendations and suggestions for a
rational use of strategic planning.

By the end of the report, the references used in the whole work will be presented in the
bibliography, and the tables and figures will appear in the appendix.

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2 Literature Review
This chapter is dedicated to analyzing literature related to the concept of strategic
planning and how it was used to affect business-unit performance. Here, the effect of
strategic planning on results is put in the context of current literature and the relationship
is established between each work and the others under consideration.

The model below reflects a holistic approach of how organizations can use strategic
planning in their management process to gain competitive advantage and perform
financially in today’s complex environments.

Figure 1:The impact of strategic planning on organizational performance

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Because of its importance, the expression "strategy" has always been synonymous with
and prevalent in any debate about an organization's subject of management, that is what
made corporate strategy a topic of main academic significance and practitioner
importance in nowadays business environment (Feldman, 2020, p. 179).

Strategy is a term with many definitions and meanings, and all of these are relevant and
important to those who are in charge of the set of their firms, companies or organizations
strategies. Researches related to the concepts are fundamentally concerned with
understanding what permits organizations to achieve performance and sustainable
advantages over their rivals. One of the most significant discussions in this field
appeared between academics rooted in the tradition of industrial organization economics
and researchers involved in the development of the resource-based view of the firm
(Feldman, 2020, p. 182).

The term strategy derives from the Greek word strategos and is related to the generality
of the military and, combines the two terms: stratos that refers to the army and ago that
means the lead. The origins of strategic planning derive from the military (David, 2011,
p: 21). Since both organizations and military strategy have a common main goal which
is to gain competitive advantage over their competitors, David adds that the military and
the business strategists are similar in terms of using their own strengths to exploit rivals’
weaknesses. Therefore, performance and the competitive advantage achieved by an
organization is he fruit of following the military strategy (a strategic plan), and rarely a
random or accidental strategy. Rather, an achieved performance is the result of both
continuous focus on the external and internal environments factors change, and the
formulation and execution of insightful adaptations to those conditions. Expressed as
hypothesis:

The more the organization sets strategic plans (e.g.” the organization determines actions
that should be undertaken to achieve the strategic goals”), the more it achieves
performance and gain competitive advantage (e.g.” high profits, notoriety, market share,
etc..”).

According to Nickols (2016, p. 2), strategy is the determination of a company's critical

long-term goals and objectives, the implementation of action courses, and the allocation
of the necessary resources for the achievement of such objectives. Strategy is crucial
and important because, the company faces the constraint of the limited availability of
resources, and in order to achieve the strategic goals, the organization is in obligation to
employ those limited inputs rationally and obtain the best outputs possible. Nickols adds
that strategy is generally about defining goals, setting actions plans to achieve strategic

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objectives, while looking forward to mobilizing the necessary resources in an optimal way
to execute the actions. A strategy therefore defines how the ends (goals) will be attained
by which means (resources). Strategy can be intended or can emerge as a design of
activity as the organization adapts to its environment or contests. Two hypotheses can
be generated from what has been cited:

The more the organization uses strategy (e.g.” identifying the resources and taking
actions that aim to achieve the goals”), the more optimized is the utilization of the
resources designed to achieve the objectives (e.g.” optimal mobilization of the necessary
resources destinated to realize the best results”).

The better the company adapts its strategic plans to the environment (e.g.” setting plans
and taking actions that take in consideration internal and external factors”), the better it
is designed (e.g.” the firm adopts an efficient strategic plan”).

2.1 Concepts of strategic management

Strategic management refers to the process of evaluation, planning, and implementation
that is considered to preserve or enhance the competitive advantage of an organization
(Bonnici, 2015, p.1). The evaluation phase of this process encompasses the assessment
of the external and internal factors. The stage of planning includes the creation of
business models, strategic plans, competitive tactics, collaborative methods, foreign
policies, procurement and joint behavior. Leadership is required in the phase of
implementation, in order to develop an adequate structure of the organization, build a
strong management culture, manage the strategic processes and direct the organization
through corporate governance (see Figure 2).

Firms usually use two different perspectives when going through the strategic
management process of analysis: planning and implementation (Bonnici, 2015, p. 1):
• Resource-based view: This viewpoint indicates the basic determinant of strategic
success is a company's specific internal capital. When the resources of an
organization are special, hard to imitate, and without close substitutes that
competitors can adopt, the organization gain competitive advantage. Other the
time, if these conditions are maintained, the firm’s resources will make the basics
for sustainable long-term competitive advantage.

• Industrial organization: The second perspective states that the outside world
dictates the strategic steps that an organization can take. The corollary of this

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principle is that a firm should recognize and seek to operate in environments that
allow strategic activity creating competitiveness and profitability.

Strategic management is the creation and implementation phase of strategies that

promote the organization's goals and objectives. When organizational priorities and
objectives change, the strategic management process continues and evolves.
Organizations conduct strategic management in order to ensure their adaptation to
developments and external changes, including globalization (Maleka, 2014, p. 12).

Dess, Lumpkin and Taylor (2004, p. 7) Indicate that the organization’s strategic
management process entails three ongoing processes: analysis, decisions, and
actions. Strategic management is concerned with evaluating strategic goals (vision,
mission and strategic objectives) and assessing the organization's external and internal
climate. Strategic management is basically a process of that relies on examination of
the environment, then adapt its actions and decisions undertaken with an aim to
achieving and maintaining competitive benefits. In essence, strategic management is
positioned around businesses world and answers to the questions of “where do you
want your business to go?” (goals), “how is your business going to get there?”
(strategy) and “how will you know when you get there?” (evaluation) (Maleka, 2014, p.
13).

A strategic management is like deciding to take a trip during your holiday, you first choose
where you want to go – your destination. Then you develop a strategy of in what way to
get there – which Airline you will take, in which highways you will drive, etc. This will be
influenced by the financial funds you have, time and other resources you have available.
Then you monitor your journey to see if your strategy takes you to your end point and
how your strategy worked (missed flights, poor road conditions, etc.). Therefore,
Strategic management consists of a wide range of ongoing activities and processes used
to coordinate and align the resources and activities systematically with the organization's
mission, vision and strategy. Strategic Management actions turns the plan into a
framework that offers strategic guidance on decision making and helps the plan to adapt
and to develop as needs and other circumstances change.

In a nutshell the strategic management can defined as the art and science of framing,
implementing and assessing cross-functional choices that make an organization able to
reach its objectives and leads it to achieve its goals, (Kabeyi ,2019, p. 27). It is also an
integrative management field that combines analysis, formulation, and implementation
in the quest for competitive advantage. According to Hitt et Al. (2008, p. 6), the strategic
management process refers to the complete set of commitments, decisions, and actions

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that remain necessary for an organization in order to attain strategic competitiveness

and gain above-average earnings. As first stage in the strategic management process,
the company must start with an assessment of its external and internal environments in
order to define its available resources, core abilities, and main competencies that
represents sources of its “strategic inputs. Through the collected data, the organization
can develop its vision and mission and formulate its strategy. In order to execute this
strategy, the company takes actions toward achieving and remaining a competitive
advantage and realize financial performance. Effective strategic plans that take place in
the context of carefully integrated strategy development and execution actions result in
looked-for strategic products. Strategic management is a dynamic process, as ever-
changing marketplaces and competitive structures are matched with an organization’s
incessantly growing strategic inputs.

Johnson, Scholes and Whittington (2008, p. 11-12) point out that strategic management
contains the process of understanding an organization’s strategic position, making
strategic decisions for the future and managing strategy in action. Strategic management
therefore refers to the process by which the organization examines both internal and
external environmental factors in order to framing strategies and allocating resources to
gain a competitive advantage in an industry that allows for the successful achievement
of organizational goals (Cox, Daspit, McLaughlin. and Jones III, 2012, p. 27-28). Most
importantly, strategic management does not mean anticipating or predicting the future
but planning and spotting the exact measures that a business needs to take to execute
its strategic strategy and achieve a competitive advantage.

Levels of strategy

An organization should consider three different levels of strategy: corporate level,

business level, and functional level. The strategy variates from a level to another
(Bonnici, 2015, p. 1 – 2).

Corporate level strategy: this level of strategy represents the uppermost level of the
process of making the strategic decisions, it covers as well the steps that aim to achieve
the main goal of the organization, the procurement and the allocation of the necessary
resources and synchronization of strategies of various strategic business units to attain
the ideal performance. At this level, top managers of the organization are in charge of
making such decisions. The nature of the strategic decisions tends to be value-oriented,
conceptual and less concrete than decisions at the other levels of strategy.

Business-level strategy: At this level, strategies are formulated for each strategic
business units and concern a separate product-market area. It includes identifying the

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competitive position of an SBU. The business-level strategy formulation focuses on the

generic tactics of general cost leadership, differentiation, and focus.

Functional-level strategy: Functional-level strategies include the various functional

elements which a strategic business unit has, such as marketing, production and
operations, finance, and human resources. The organizational heads and their teams
devise these plans and are matched with business strategy. The strategies at the
functional level include defining short-term strategic priorities, the attainment of which
will main to the completion of the business level strategy.

Strategic management process

The accessibility that consumers have to products had increased due to international
competition. This intense competition has required a concerted effort to establish and
enforce strategic action through a process that requires 5 main phases (Maleka, 2014,
p. 14) (See Figure 3).

Goal setting: The development of priorities, a mission statement, principles and

organizational objectives are at the core of the strategic management process. Through
the pursuit of strategic possibilities, the corporate priorities, mission statement,
principles, and objectives direct the organization. It also lets executives focus
strategically about how to reach goals and generate higher revenues. With goal setting,
companies plan how to survive in a more dynamic and competitive worldwide area.

Analysis strategy formation: Analysis of an organization's strengths and weaknesses

is a key concept of strategic management. Other than the internal analysis, an
organization also undertakes external analysis of factors. Through internal and external
analysis, the organization creates goals and objectives that will turn weaknesses to
strengths. The analyses also facilitate in strategizing ways of adapting to changing
technology and emerging markets.

A central aspect of strategic management is the exploration of strengths and

weaknesses of the organization. Apart from internal analysis, a company often carries
out an external study of factors to detect the new opportunities and the existing threats
like emerging technologies and competition. SWOT analysis (Figure 4) or other tools are
usually used. The key components of internal analyzes are the resources that are
integrated and built into business capabilities. (e.g. facilities, equipment, capital financial,
human capital, and distribution networks). Capabilities that are difficult to replicate and
contribute to competitive advantages are converted into core capabilities. An internal
review assesses how they can be developed to carry on generating competitive

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advantages for the business. The external macroenvironment involves factors outside of
the organization's control that require an analysis to realign corporate and marketing
strategy to change business environments. Companies can be influenced by political,
cultural, social or technological forces as well as legal, ecological, demographic, ethical
or regulatory ones (which are summarized in PESTEL Analysis, Figure 5).

The organization aims to develop strategies and actions that could make of weaknesses
strengths through internal and external evaluations. The analyzes also lead to the
strategic adjustment of technology and emerging markets. In other words:

The more the strategy is adapted to both internal and external environment (e.g.” when
managers adjust strategy to factors that influence the firm internally and externally”), the
more competitive is the organization (e.g. “when the organization is more performant
that its competitors”).

Strategy formation: Strategy formation is a concept which involves developing specific

actions to allow an organization to achieve its objective and meet its goals. The
formulation of strategies includes the use of research knowledge, prioritization and
decision-making on how to deal with key issues and problems that an organization can
face. In order to optimize competitiveness and retain a competitive advantage, an
enterprise often struggles with the formulation of strategy, and seeks to find the best
ways to maximize the profitability and maintain its competitive advantage.

Strategy implementation: The implementation of the strategy refers to the process that
aims to execute and put into reality the strategy in order to achieve organizational
objectives and goals. The idea behind the project is to gather all the tools needed to
revitalize the strategic plan and bring it to life. Organizations adopt strategies to maximize
the revenue, optimize the management of the human resources and achieve
organizational goals by creating budgets, programs and policies. Cooperation between
management and other human resources is completely necessary for the effective
execution and the success of a strategic plan.

Strategy monitoring: A final concept is monitoring of the strategy after its execution.
Strategy monitoring includes an assessment of the strategy to determine whether it
yields the anticipated results as part of the organization’s objectives. Here, an entity then
decides which areas of the measurement program and tools are available to assess
these areas and compares the anticipated results with the actual ones. The company
can understand when and how to modify and adjust the plan to adapt to changing trends
through monitoring.

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Mission and vision statement of an organization

Most of the organizations aim to develop both a mission statement and a vision
statement. While the mission statement responses to the question “What is our
business?” The vision statement tends to answer the question “What do we want to
become?” (David, 2011, p. 46).

It can be argued that the primary source of motivation in organizations is profit and not
mission nor vision. However, this factor isn’t enough to satisfy and encourage people in
their working space. Some workers may see profit as an earning, that only top
management uses and even gives away to shareholders. Although this negative opinion
is unwanted and disturbing to management, it clearly shows that despite generating
profit, developing a vision is also needed to motivate employees effectively.

When employees and managers together form or design a company's vision and mission
statements, the resulting documents reflect their personal views about their own future.
Shared vision provides a common desire that can elevate workers from the monotony of
daily work and introduce them to a new world of opportunity and challenge.

The process of developing vision and mission statements

As mentioned in the strategic-management model, a clear vision and mission statements

are required before formulating and implementing alternative strategies. In order to make
people committed to an organization, as many managers as possible have to be included
in the formulation of the vision and mission statements. (David, 2011, p. 47).

According to Papulova (2014, p. 13), many ways exist that aim to develop a vision
statement: develop visions using intuition; use a team approach; use a rational approach
or adapt the vision of other subjects.

The traditional way to discover and develop a vision is make reference to intuition. The
vision is perceived first as an idea which unexpectedly and suddenly come up to its
inventor - a visionary. It infrequently befalls intentionally. Habitually, these creators are
also foundering of organizations (e.g. Thomas Watson or Steve Jobs) who can lead the
entire company towards achieving the vision.

The use of a team approach is another alternative used in order to develop the vision of
an organization. Cooperating with people within a team that can bring innovative ideas,
interpretations and inspirations can be very advantageous and result in creative and well-
thought solutions. Every person has his own capabilities and an amazingly great capacity
of mind. If there is team is constituted of creative people who think strategically, then the
saying, "two heads are better than one" can be applied.
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The vision development’s rational approach is another possible method. This tactic is a
method based on balanced and reasonable thinking. In this context, executives rely on
investigation and synthesis, introduction and assumption, comparison and further
empirical study techniques. However, the use of this method will never lead the
organization to original innovative or deep-seated vision, because it depends on already
recommended practices that are based on investigating previously collected information.
Rational thinking is an old-fashioned approach that will never lead the company to adapt
innovative solutions.

The last method of vision development is to adapt the organizational vision of another
subject/entity. Executives can be influenced by another organization’s vision and
understand its importance and significance. Managers in this case join this subject and
as a partner work together to fulfill the vision.

According to Papulova (2014, p. 13), a mission statement refers to the way in which the
firm communicates the business it is into the external world. The process of the
development of mission statements is founded on numerous decisions. The key concern
is about the goal audience of the organizational mission statement. The target audience
of the mission statement can differ accordingly to its main aim. The target audiences and
communication potential of the mission statement should be at first point clearly
identified. Papulova adds that there more than one way of developing an effective
mission statement.

Throughout the process of formulating a vision and mission, some companies tend to
use discussion groups of managers in order to revise and modify existing statements.
Sometimes, firms proceed to hire an external consultant or facilitator to manage the
process of developing those statements. An external expert in developing such
statements, with unbiased interpretations, can accomplish the process more
successfully than an inside group or commission of executives. After the documents are
presented in final form, decisions on the adequate way to share the vision and mission
with all executives, the personnel, and also external publics of an organization is needed.
Some organizations even develop a videotape to clarify the statements, and how they
were formulated (David, 2011, p. 47).

Goal of an organization

According to Nickels et al. (2000, p. 68), objectives are the large, long-term goals that an
entity wishes to accomplish, attain or where it wants to be. They have the general context
for what the dream trying to achieve is. They are important tools that split the declaration
of vision into concrete objectives and activities to achieve desired outcomes across the
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organization. They serve as the yardstick for monitoring the success or progress of an
organization.

The organization must set goals that are SMART. SMART goals stand for Strategic,
Measurable, Attainable, Results-oriented, and Time-bound (O’Neil, 2000, p. 47). Goals
must be tangible and time specific as opposed to abstract targets such as "maximizing
income," "reducing costs," being more productive or "rising sales." These do not indicate
how much (statistics) to accomplish, nor when (time) to attain. Consequently, they will
not encourage workers to work hard to reach success goals. The goals have to be
practical and achievable.

2.2 Strategic planning as a complex managerial tool

Various scholars have described the concept of strategic planning differently. However,
the fundamental problems are the same; they concentrate on making preparations and
taking actions today for a company's future success and profitability through the best use
of available resources considering all the constraints presented by the internal and
external environment. Nickols (2016, p. 2), describes the process of strategic planning
as a set of procedures and activities that essentially aim to establish the organizational
mission and vision, develop plan of actions, perform a strategic analysis, setting strategic
direction, taking action, that is, setting out carefully how the strategic objectives are going
to be accomplished, measuring the progress and adjusting the plans if required.

David (2011, p. 6) states that the term of strategic planning emerged in the 1950s and
gained popularity in the mid-1960’s through the mid-1970’s. The use has progressed
through the 1990's and has become widely practiced in almost all companies as an
important tool in the management process due to the presence of the influence of
globalization, technical advancements and business capabilities competitiveness. He
adds that a strategic plan refers, in essence, to the game plan of an organization (e.g.
like a football club needs a good game strategy to increase chances to succeed, an
organization must also plan strategically in order to compete successfully). A strategic
plan is therefore an output of hard managerial selections among multiple good
alternatives.

Strategic planning is a structured process by which an organization formulates

achievable policy priorities for future growth and development over the long term, based
on its purpose, vision and objectives, and on a practical evaluation of the human and
material resources at its disposal. Walker et al. (2011, p. 3) considers strategic planning
as is a sequence of actions with the aim of setting long-term organizational objectives,
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developing and executing strategic plans to attain the desired ends through the optimal
distribution of disponible resources and allocating of the necessary resources for
realizing these goals. Strategic planning is about encompassing all those actions that
lead to goals and objectives being identified and methods chosen to achieve them. In
other terms:

The more the organization sets strategic plans (e.g.” the organization formulates well-
structured and take actions that will help in the achievement of goals), the more it
competes successfully (e.g.” when the firm achieve the desired results and become
performant and competitive”).

It must be said that, there is a connection between the above-mentioned detailed

contributions and Bryson’s assumptions (2009, p. 176) who notes that strategic planning
refers to a focused effort to produce fundamental decisions and acts that form and direct
what an organization is, what it does and why it does that. The process of setting a
strategic plan describes the priorities and objectives and strategies for achieving them in
the medium and long term. It's a glimpse into the future that defines an organization's
mission, vision, priorities and objectives with defined steps required to attain the vision.

The value of strategic planning cannot be overemphasized for any organization, it is

essentially the most important management process. This is apparent from the definition
given by St-Hilaire (2011, p. 42), who considers strategic planning as a feasible
alternative, that permits an organization to guarantee the continuality of the plan that
realigns the organization’s objectives and strategies with the environmental fluctuations.
Thus, using strategic planning would allow an organization to achieve in an efficient way
the major decisions, through the identification and exploitation of the potential
opportunities. Strategic planning can also contribute in optimizing the timing and the
allocation of the resources identified to opportunities and avoid wasting valuable time
and resources in correcting mistaken or ad hoc choices. Eventually, strategic planning
makes the organization benefit from a competitive advantage over its rivals. Strategic
planning is therefore an effective tool to manage environmental turbulence and aims to
realize supposed plans to achieve that contribute in organization performance. In other
terms:

The more the organization sets adaptive strategic plans (e.g. “the firm sets plans that
realigns its objectives with the environmental fluctuations”), the more it gains a
competitive position over its competitors.

Performance in business or military operations does not come by coincidence but it is

the result of both constant attentions to changing external and internal circumstances
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and the creation and execution of informative adjustments to those circumstances. It

includes using the resources of a company to manipulate the weaknesses of the rivals
and cash-in on opportunities in the outside world. Around the same time, the firm is taking
steps to stop, foil or protect possible competitor attacks into its vulnerability areas.
Therefore, it is both an assault and a defensive tool that Dyson (2000, p. 10) sees as a
method of apprehending the uncertainty of the future, and a mediating power or match
between the company and the environment. Expressed as hypothesis:

The more the strategic planning process takes into consideration the internal and
external environment of the organization (e.g.” assessing the environment and take
actions considering information gathered), the more it accomplishes performance (e.g.”
competitive advantage and financial performance).

Strategic planning is Arend et al. (2015, p. 1743) as a tool that’s organizations use to
focus activities and to enhance productivity; such as setting priorities, optimizing the
exploitation of resources and determining the sequence of tasks. The planning process
reproduces a strategically significant decision-making process for firms, that enhances
its overall performance, since it determines the organizational ends, makes the incomes
more efficient, make competitive threats and opportunities clearer, and provide an
effective control and efficient implementation of actions. Organizational performance is
also increased as the planning mains to more rationality in the decision-making
processes and an enhanced possibility of sharing effective information. Though,
strategic planning contributes in reducing the number of new-products, and subsequently
the quantity of new funded ideas. Therefore, strategic planning is considered to limit
creative flexibility that leads to innovation as well as the knowledge that fuels new ideas.
In other words:

The more the organization plans strategically (e.g.” sets strategic plans to attain the
performance”), the more performant it becomes (e.g.” more competitive and more
profitable”), but less innovative (e.g.” the number of new ideas and innovative solutions
within a company is decreased”).

Strategic planning vs. strategic thinking

Strategic planning is the process of defining and implementing the steps that must be
undertaken in order to accomplish the previously determined goals of the organization.
It involves collecting and analyzing the maximum of information about the current
situation and then mapping out a plan for implementing the corporate vision (Nickols,
2016, p. 6). Conversely, strategic thinking helps to answer questions like: where are we
now? Which is identifying the company's potential strengths and weaknesses and any
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opportunities and challenges that overcome in the environment; Where are we heading?
That discusses the business focus, the targeted marketplace, the segment to be served
and other consumer needs; How are we going to get there? Which refers to the means
to achieve the desired objective; How do we know we have achieved that goal? It
represents the roles governing and assessing (Steptoe, 2011, p.16).

Strategic thinking helps a company to be proactive, creative and remain focused on what
it is doing. It promotes effective resource allocation and better control. It places an
organization’s focus on capitalizing on opportunities and achieving the best strategic
match. The main objective of strategic thinking is to predict and anticipate in order to
achieve and realize a ‘desired future’ in the long-term by taking a sequence of short-term
actions. Each action converges to the same desired end; in fact, a well-thought action is
more likely to be fruitful than unintelligent act (Betz, 2016, p. 58). Therefore, the main
aim of strategic thinking and the process of strategic decision making is to guarantee the
survival of the organization in the market where it operes.

All managers and participants need a broad perspective and awareness about cultural
patterns and market changes that influence the world in today's changing business
climate. Many managers are focused on achieving "today" performance and are
concerned with routine duties that struggle to make a long-term impact. In this time of
rapid financial and market-oriented change worldwide, corporate planning transitions
from the basic 'strategic plan' to more 'strategic thinking' to survive the crowded and
competitive global environment (Betz, 2016, p. 9).

To remain competitive, organizations need to maintain dynamic, constantly learning and

adaptable their strategic management processes and take advantage of emerging
opportunities. Strategic analysis should continually be reevaluated, revised and
redefined in a company's conceptual models at the heart of the overall strategy cycle.
According to Mintzberg (1994, p. 16), the term strategy planning needs to be dropped as
strategic planning has hampered strategic thinking.

In the point of view of Mintzberg, strategic planning concerns analysis whereas strategic
thinking concerns synthesis. In this case strategic planning involves splitting the goal into
steps, how steps should be executed and evaluating the expected outcomes of each
step, whereas strategic thinking involves using intuition and imagination to create a
holistic and creative vision of the direction that the company will take.

Strategic thinking, in practical terms, will help to evaluate, examine, appreciate and
identify a complex situation, and then to implement strategic steps that will produce the
greatest possible positive effect on a pre-defined target. Therefore, it is necessary for
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strategic thinking to help build strategic plans. Strategic planning places an organization
at a certain point on the basis of its goals and potential positive adjustments. This is the
reason behind why most of enterprises involve executives and managers that have a
strategic mindset, since this obviously distinguish them from those who have
conventional manners (Steptoe et al., 2011, p.3).

Nickols (2016, p.7) asserts that every organization should think strategically. The main
objective of planning and setting the strategy is to think and manage strategically, not to
just thoughtlessly engage in strategic planning only for the sake of strategic planning.
Within today's corporate climate, the application of strategic thinking and strategic
planning continues to constitute a challenge for many leaders. Therefore, it is important
to recognize clearly the importance and benefits of strategic thinking. Thinking
strategically contributes in predicting a company’s future. It makes it easier to figure out
ways of moving into what is planned for the future and keep away from ways that may
lead to a loss of company. Moreover, through strategic thinking, a company is able to
become more adaptable to changes. Expressed as a hypothesis:

The more the company thinks strategically (e.g.” when the firm takes intelligent and well-
thought actions to achieve its goals), the less it loses (e.g. “when the company loses its
competitiveness in the market and is no longer able to generate important profits).

Bonn (2005, p. 337) defines strategic thinking as a method of resolving strategic issues
that combines a balanced and convergent approach with inventive and creative thought
processes. Such process orientation emphases this examination on how executives in
an organizational setting try to comprehend and undertake strategic actions in a highly
complex environment, unclear, uncertain and extremely competitive. It represents an
important antecedent to strategic decision-making and may deliver a better
understanding of organizational variation phenomena and eventually, organizational
performance and existence.

Strategic planning and operational planning

Strategic planning is a senior management practice or method that includes deciding

where, over the next year or more, a company is going (the direction), that means,
measures and actions it needs to take to get there, and what it is intended to accomplish.
This operation involves conducting some examination of the general environment
(political, economic, social-cultural, technical, legal and green environment-PESTLE
Analysis), the industry (industry competition, suppliers, customers, danger of near
substitutes and facilitation of new entrants; Porters 5-Forces model) and self-
assessment to see what the strengths and weaknesses of the company are and how to
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use their strengths to maximize the resources available while defending themselves or
strengthening their areas of weakness. Strategic planning is a process that enable an
organization to determine its key priorities and objectives for the long term and set
actions and that the organization should undertake in short-term starting from today.
Strategic planning is therefore about adjusting the strategy to the environment in order
to achieve a sustainable and sustained performance and high profits (Paschal et al.,
2016, p. 14).

A strategic plan is an outline of the mission, vision, and high-level goals for the upcoming
three to five years. It also takes into consideration how those objectives will be measured,
and the major missions that will be taken in order to meet them. Operational planning,
by comparison, is a lower-level management practice that includes mapping out strategic
objectives and approaches or tactics to achieve the organization's overall vision. It is
usually managed at lower level of the organizational structure for a period not exceeding
one year (short-term). An operational plan (or work plan) is a framework of plans and
missions the organization will focus on for the near future (short term). According to
Shobaki et al. (2016, p. 44), the operational level of planning precise the individual
actions that should be undertaken in due time using optimally the existing resources.
Operational planning covers a period of one-year (short-term period) and it is resulting
from strategic planning. Operational planning participates in realizing the premeditated
strategy, it represents more details and is more concrete, and is completed continuously
at the level of business-units, including the production process as well. All in all, the
strategic plan outlines potential vision and explains how the company gets to it every day
and on a weekly basis through an organizational plan.

Both concepts describe plans for the future of an organization, but in different contexts.
Below five major differences: strategic planning vs. operational planning (Shobaki, 2016,
p. 43)

Time period: the strategic plan sets long-term goals for the next three to five years. The
operating plan details what will be achieved to meet these goals in the near term (typically
in the next fiscal year).

Goal focus: the purpose of the strategic plan is to outline the long-term vision of the
organization and how all departments will cooperate. The purpose of the operational plan
is not based on the business, it is departmental. An inter-department overlap might exist,
but this is not the rule but the exception. Several operating plans can be required for
large/big departments.

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Plan generation: the high-level leadership team – for instance, the executive committee
or the city council – are in charge of developing the strategic plan. When formed, cross-
functional teams work together to ensure an effective approach can move forward the
strategic plan in order to make it successful. Each department should have a leader or
team of leaders in charge of forming the operational plan. Even though every operational
plan is intended for a single department, its successful execution be a success for the
company as a whole. The marketing department, for instance, has a range of initiatives
to improve exposure. The activities would result in more sales opportunities and
ultimately more profits for the organization (both of which may be targets of your strategic
plan).

Budget: the strategic plan budget is based on the strategic budget rather than the
operating budget. A strat-ex budget may be adopted by the department, which aligns
part of the budget with policy programs or initiatives. This strategy is different from
budgeting every division or department, it is different. The operating plan budget comes
from the annual budget of the department. For instance, when the strategic plan sets a
marketing target to create a strong online presence, budget cuts should be made before
blog writing.

Reporting: the strategic planning committee or the executive team must evaluate how
the organization is executing its prioritized decisions through reporting on the strategic
plan (typically both annually and quarterly). Such debates will stay relatively high-level
depending on the conference, so that the organization does not get lost in depth. On the
other hand, the organizational reports detail hundreds of initiatives or activities in the
organization. Monthly organizational review meetings reflect the status of each initiative
to members - and the rest of the department. In comparison to the strategic study,
organizational project enhancements may be either hypothetical or qualitative (as
actions that are not tied to steps are often difficult to quantify). Many companies provide
an excel or a word document statement on the file. It is updated weekly or monthly as
this aspect of the operating plan is not addressed explicitly.

Understanding strategic planning vs. operational planning doesn’t mean you choose
between them. They complete each other.

Strategic planning vs. strategic management

Strategic management is the activities that general managers undertake in order to boost
the efficiency and enhance the performance of the. It includes determining the mission,

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vision and objectives of the organization and the creation of policies and plans, with
respect to initiatives and programs that strive to achieve those objectives, and then
optimally allocate resources to carry out policies and plans, initiatives and programs
(Shadbolt ,2007, p. 4). The overall success and progress of the company in achieving its
goals is also calculated by a balanced scorecard. Current studies and leading
management researchers have supported that the strategy must begin with the
expectations of stakeholders and use an updated balance scorecard that includes all
stakeholders.

Strategic management is a managerial activity focused on setting objectives and goals.

The concept of strategic management offers an overall guidance to the company and is
closely linked to the field of organization studies. In the field of business administration,
it is useful to address 'strategic cohesion' or 'strategic coherence' between the company
and its environment. Strategic consistency occurs when the actions of an organization
are in compliance with the expectations of management, and these in turn are in line with
the market and the context. Hence, strategic management contains a wide-ranging
organizational set of corporate, business and practical strategies for setting the
company’s goals, vision and mission. Strategic management does not only include the
executive team but can include the board of directors as well as other corporate
stakeholders as well. It depends on the structure of the organization (Nnamseh & Akpen,
2015, p. 91).

Strategic management is an ongoing process that identifies and analyzes the business
and the industries in which the organization is involved; evaluates its competitors and
sets objectives and strategies to meet both existing and potential competitors; and then
reconsiders each strategy annually or quarterly to assess how it has been implemented
and whether it has succeeded or requires replacement by a new strategy to meet
changing conditions, new technology, new rivals, a new economic environment, or a new
social, financial, or political atmosphere. Comparably, strategic planning is the process
by which an organization defines its strategy, or direction, and makes choices on
allocating the necessary resources in order to follow this strategy. It is important to
consider the current position of the organization and the potential ways by which it may
take a particular action to determine the direction of the organization. Strategic planning
is also defined as a mechanism for deciding and determining where a business normally
goes in 3-5 years (long-term), although some organizations tend to expand the vision to
20 years. Strategic management refers to the science of framing, executing, and
assessing cross-functional decisions that aim to achieve the organizational objectives

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and goals, while strategic planning represents the outcome of a rough managerial
decision among many decent alternatives (Nickols, 2016, p. 6).

2.3 Evaluation of a strategic planning process

2.3.1 Factors of strategic planning process efficiency

A strategic plan is defined as a set of procedures and actions undertaken in the aim of
developing strategies that will lead to the accomplishment of the organizational main
goals. Therefore, the formulation of effective strategies that will direct the organization to
the desired destination and its final end is a must (Kiptoo & Mwirigi, 2014, p. 188).
According to Whelan and Sisson (1993, p. 31) evaluating the strategic plan and defining
its quality criteria is very important to since it represents the concrete product of the
strategic planning development process; the quality of the strategic plan produced
reflects the good nature of the process itself. When strategy is badly conceived, a quality
strategic plan will not be drafted. It is necessary to define the determinants of document
quality first, in order to assess the quality of the strategic plan document produced.
Therefore, current awareness of project quality criteria (in general) and quality criteria (in
particular) of the strategic plan framework will be addressed in the next section.

The definition of document quality is divided into six dimensions under the Quality
Assurance System (QAF) (2002) of statistics Canada. The following are:

Relevance: it represents to what degree it reacts to customers' specific needs.

Accuracy: is the degree to which the knowledge explains the phenomenon correctly.
Timeliness: refers to the period between the point of reference and the date of the
access to the information.
Accessibility: refers to the ease with which information can be obtained from the
department.
Interpretability: It represents the availability and use properly of additional information
and metadata required for interpretation.
Coherence: signifies the wide-ranging analytic framework.

As quality is defined as suitability for usage, any quality rating should allow each
consumer to prioritize its own priorities among the dimensions. Some, for example, put
timeliness as a determinant of document quality, while others stressed accuracy.
According to Mellalieu (1992, p. 14), a quality strategic plan must deliver well-justified

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responses to the strategic questions and has to be a foundation for communication with
people who need to know about the strategy but who didn’t contribute in the planning
process. In addition to that, there should be other clear and observable targets in the
document. Mellalieu then notes that the following questions should be considered for a
manager to assess the content of a strategic planning document: has the plan properly
discussed all the “strategic questions‟, goals and objectives in order to leverage critical
resources to resolve critical threats? Does the plan define main objectives and goals
that are important to the success of the strategy? Is the strategic plan robust enough to
be able to deal with risk and ambiguity and details unreliably? Is the structure of the
company consistent with strategic requirements? Have control structures been
constructed to ensure that execution of the plan is under control?

According to Neluheni et al. (2014, p. 698), organizations that become the “crown jewels”
in their industries are founded on and made by adopting quality strategies and practices.
A quality strategic decision will always allow the organization to gain competitive ad-
vantage over its rivals and achieve the predetermined level of success.

Being involved in the strategic planning process requires a deep knowledge of what
comes foremost as well as what comes last. Reaching high quality planning process and
outstanding strategic practices starts from preparing executives and managers, the
whole members and also the organization. The process of strategic planning might in-
volve participants’ and executives’ emotions which can run high sometimes. Therefore,
for a more efficient strategic planning, an external consultant is recommended to handle
the whole process. The outside facilitator must, therefore, have the competencies and
skills in leading a group and must have the essential know-how and expertise related to
the strategic planning process. The core of his mission is to make the group moving
towards the wanted and desired results. Regarding the preparation of the members who
will be conducting the strategic planning process, they should be informed by the man-
agers what will be covered during the whole process, so they can contribute positively.
They must also understand what they are supposed to do, their missions, and the actions
they should undertake to make the process successful (Neluheni, 2014, p. 700).

The preparation of the organization is also crucial in the preparation phase for a succeful
strategic planning process. According to Gibson, Invancevich, Donnelly & Konopaske
(2009, p. 14), “an organization is a coordinated unit” designed by a single-minded group
of persons in order to attain a specific aim. The members are reunited together as they
want to fulfill a certain common human need in their organization. This need represents
the hole they have seen in the marketplace. Human needs are turned into consumer

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expectations or wants that become the priority of a business in its search for customer
satisfaction. Therefore, it is necessary to prepare the organization through the identifica-
tion of resources, abilities as well as capabilities that are required to the business.

The main focus of organizational preparation is on completing efficiency and effective-

ness. Organizational effectiveness depends on the efficiency with which the company is
utilizing its resources. The global organizational efficiency also focuses on the effective-
ness of the individual, team and group. Capacity, ability, comprehension, attitude, moti-
vation and stress influence personal effectiveness, while coherence, leadership struc-
ture, rank, position and expectations influence group effectiveness. Environment, tech-
nology, strategic decisions, structure, processes and culture affect organizational perfor-
mance (Gibson, et al., 2009, p. 15).

A strategic planning process overview has also a crucial role in making the process suc-
cessful. It encompasses an observation of the past, of the present and a prediction of
the future of an organization. The process conducts an evaluation of the organization, its
resources, and its environment and involves the determination of the desired goals. An
overview of the strategic planning process concentrates as well on the the sponsor, fa-
cilitator and participants' positions and on the rules of participation. The sponsor is the
person responsible for the organization's success and provides project funding. He con-
tributes in the resolving the organizational and the political problems. Sponsors encour-
age the appropriate partners with common understanding to participate in the strategic
planning process (Neluheni, 2014, p. 700).

Strategic planning process aims to define the destination that the business wants to
reach. It includes setting out the global objectives and goals for the organization. By
contrast, the strategic plan’s main aim is to deliver a well-detailed roadmap that shows
the ways that the business will take to reach the desired end point. Strategic planning
and business planning should complete each other; however, the development of an
effective strategy necessitates to give more consideration to the wider and longer-term
decisions that will allow business growth and reach better performance, rather that con-
centrating on daily basis concerns. Strategic planning seeks to put the business in a
position as competitive as possible in the marketplace, thereby making it meaningless
for rivals. Good strategic planning involves taking into account alternatives that challenge
how business is done. The decision-making processes in certain fields may be handed
over to others, or processes that have been successful in the past may no longer be
appropriate for future plans considering the dynamics in various companies. This

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ensures that various organizations would have various strategic planning strategies to
achieve the company's established objectives (Kiptoo & Mwirgi, 2014, p. 194).

2.3.2 Barriers to the strategic planning formation process

Strategic planning for organizations has become more crucial than ever before as the
world in which businesses operate has become increasingly indeterminate; shifts in
population size, a change in people’s attitudes, political changes, aging, a diversifying
society, and the use of information technology are some of the fluctuations that source
uncertainty in the environment and are seen as challenges that managers and leaders
have to cope with. According to Brews & Purohit (2007, p. 64), asserts that most
managers declare that product life cycles are becoming shorter, technology is changing
in a very fast way, and thus influence the needs of consumers that became more
demanding and exigent, which intensified the competition in marketplace.

In thinking broadly about the interaction between organizational internal and external
environments. Allard-Poesi (2016, p. 7) notes that in the organizational life, people
themselves are the one who often produce part of the environment they face. They act,
interact, and thereby create materials that become barriers, constraints, or opportunities
they face. This claim on the interconnection and interdependence between the company
and its environment further emphasizes the case for taking into account the internal and
external factors and their impact on the development phase of strategic planning. The
external and internal organizational factors affecting the planning process and
considered as planning obstacles will be listed below, with the intention of listing the key
ones as noted in the literature, rather than collecting all the internal and external
influences.

External Organizational Barriers

The business environment in which the organization operates influences the strategic
decisions made. In order to avoid the challenges and the problems that could occur, the
organization much assess and scan its external environment. The environmental factors
can’t be controlled by the business since they arise from external forces, and therefore
they are considered to be hard to manage by executives and managers. Strategy is
about linking the organization to its environment, which in turn impact the overall
organization performance. The performance might differ depending on the strategy
chosen, as well as on performance measurement tools used by the firm (Kiptoo & Mwirgi,
2014, p. 193). The external organizational environment represents the context within
which the organization operates. The macro environment represents the broad

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conditions and trends surrounding the organization. These include the political-legal
climate, economic conditions, technology and socio-cultural climate.

Barriers associated with the political-legal climate

Political-legal climate refers to the legal and governmental systems in which the
organization operates. Trends in legislation, court decisions, policy and government
regulations are important aspects of this climate. According to (Vrontis & Pavlou, 2008,
p. 292), political and legal factors are the set of laws and regulations, agencies and
groups that impact and border organizations and persons within a given society. Since
political and legal factors cover numerous characteristics of the strategic plan of the
organization, it has been noted in the literature that political stability and political
influence are one of the factors that may influence the process of strategic planning of
businesses.

Political stability: A number of scholars have noted the relationship between political
stability and strategic planning. For instance, Radu (2015, p. 765) argues that the stability
of the political and legal environment can have an impact on the efficiency of the strategic
planning formulation and implementation. According to him, political stability can be
defined as the measure of the probability of destabilization or overthrow of the
government due to unauthorized or violent means, such as domestic violence,
extremism, radicalism and terrorism, which will lead to a decrease in investment, slow
the speed of economic development, a rise of the probability of a government to collapse
and political conflicts, restrictions on imports and exports between countries, differences
in quality standards and regulations across countries. Since the government can play an
important role in encouraging or discouraging strategic planning by creating legal barriers
in specific industries. The instability of the political environment, therefore, would impede
the effectiveness of the strategic planning process. In addition, strategic quality planning
can also be influenced by, and the level of political stability and instability of governments

Political influences: public organizations have different political influences. In an attempt

to cope with these influences, the literature provides evidence of non-political activities
that are ultimately designed to achieve results in favor of economic survival-friendly
organizations. These political activities also provide the organization with a sustainable
advantage. However, certain political influences could not be addressed through the use
of political activities by organizations and therefore inhibit the planning process or
prevent access to the resources needed for planning (2015, p. 767).

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Barriers associated with the economic climate

According to Banahene et al. (2016, p. 634), macro environmental factors refers to a set
of factors constituted of political, economic, socio-culture, technological, international
and ecological parameters that factors impact strategic planning formation and
implementation of actions. The economic climate comprises the production, distribution
and consumption of wealth systems. Within any economic system, organizations are
influenced by economic aspects over which they have little control, such as inflation and
recession. Macro-economy is defined as a subdivision of economics that deals with the
performance, structure, behavior and decision-making of the economy as a whole.

The macro economy influences the organization's strategic planning in two ways. First,
with economic growth, people's expectations of services are increasing, requiring
organizations to plan ahead strategically to meet the demands for better services.
Second, macro-economic fluctuations, such as recent economic crises, may reduce the
capability of organizations to plan ahead, as funding is reduced on the one hand and the
accessibility to reliable economic information (growth forecasting information) is
unpredictable or unavailable on the other hand. It was also found in the literature that the
level of international economic involvement could also influence leadership and strategic
planning. Companies with greater international competition were more likely to
implement strategic initiatives. As international competition increases, costs, quality and
competitiveness become much more interdependent. Intense global competition can
lead firms to re-examine their strategies and practices. Moreover, opening up new
markets may increase economic pressures towards affordable quality, resulting in a
greater focus on quality in the strategic planning process (Banahene et al.,2016, p. 634)

Barriers associated with the socio-cultural climate

The socio-cultural environment reflects the attitudes, ethics, norms, views, opinions,
manners and related demographic characteristics of the population within which the
organization operates. Companies need to be mindful of these discrepancies as well as
of evolving patterns in order to remain successful in providing their services and goods
(Banahene et al.,2016, p. 635).

The organizational social climate can also be defined as a cultural perception of the
actions of an organization – that is, if the organization pursues socially appropriate
objectives. Social cultural business-environment factors are those deeply rooted
elements in people of a particular society or group and encompass the values, attitudes,

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norms, practices, institutions, stratifications, and related ways of a society In order for an
entity to thrive, the socio-cultural environment must be viewed by society as legitimate
and deserving of support. It strengthens the ability of the company to procure resources
and poses concerns about its capacity to provide the community with products and
services (Abdullahi & Zainol, 2016, p. 81).

In connection with the above, the multiple external stakeholders and the uncertainty of
stakeholder’s expectations have been noted as potential two obstacles to the strategic
planning process.' At least two challenges for companies during preparation are caused
by the various external stakeholders. First, the variety of stakeholders might generate a
variety of goals with many performance acts that do not satisfy anyone. Second, it might
be tough to set goals or to take decisions founded on the measurement outcomes since
some of the stakeholders have contradictory purposes as well as the presence of a
conflict between needs of different stakeholders that have to be reconciled in some way.
Another possible obstacle to preparation and development of a strategic plan is the
ambiguity of stakeholders’ expectations, which underlines the specificity of the criteria of
the parties concerned. The planning process faces many constraints and limitations
related to the perception of the necessities of external stakeholders in many businesses.
Managers see their targets as clear and realistic, but the outcome can depend on the
organization's relative knowledge. Setting targets in a highly politized atmosphere will
make managers, in particular those who have many stakeholders, find it difficult.
Organizations are more likely to adopt a combination of strategies to meet the needs of
different stakeholders (Vrontis & Pavlou, 2008, p. 295).

Barriers associated with the technological environment

Technology is of great interest to organizations because it increases the

competitiveness of an organization, which means it can either offer a competitive
advantage to organizations that can use it effectively or threaten to those lacking it.
According to Dzemyda (2014, p. 21), because of the technological revolution and its
current importance in the business world, factors related to technology play a significant
role in the formulation of the strategic management process. Evolving technical
processes contribute in direct and guide the organization when it comes to its activities
and goals. Technological breakthroughs can create new markets, new production,
marketing techniques and new products. Therefore, technology is considered to be a
crucial factor for organizations to formulate effectively its strategic planning and hence,
to remain competitive in the long-term. Organizations must consider new technological

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advances, which impact their ability to deliver attractive goods and services, in order to
succeed and remain competitive over its rivals. Rapid technological advances can
therefore be seen as a potential challenge for strategic planning process, especially for
organizations which have been unable to track and use technology as a competitive
advantage. Expressed as hypothesis:

The more the organization uses the technology efficiently (e.g.” managers should collect
data related to the existent technologies, anticipate the impact of it and adapt its
strategy”), the more effective is its strategic planning process (e.g.” the formulation and
implementation of the strategic plan remain successful).

It is of great significance to shed the light on global environmental fluctuations “turbulent

climate‟ and their impact on the strategic planning process. The basic concept of the
theory of organization is that organizations must adapt to their environment in order to
be successful It is generally recognized that organizations must achieve a suitable "fit"
with their environments in the strategic management literature. This point of view is
supported by Bryson et al. (2018, p. 332) who notes that strategic planning is seen as a
form of logical organizational reform in order to preserve its environmental fitness, as a
set of concepts, actions, tools, and practices that should be practiced sensitively and
contingently in specific situations to realize and benefits from advantages of strategic
planning.

With rising environmental uncertainty, strategic problems emerge more often and
threaten the formulation and execution of an organization's strategy. Environmental
turbulence brings as well into interrogation the responsibilities, balance of power, and
decision-making objectives between those who manage and those who rule. The
capacity to forecast changes accurately decreases with rising environmental variability.
The best methods for a company in order to accomplish its goals become more difficult
to decide. The use of schedules can be too obstructive in an atmosphere of high
uncertainty that causes organizational rigidity. Strategic planning is more successful in
more stable environments where the prediction is likely to be more precise and
organizational adaptation to a minimum. Moreover, the incorporation and formalization
of decisions in the planning process impacts positively the performance in stable climates
but in a negative way in more chaotic environments (Mufzada, 2018, p. 2).

From the discussions above, it is recognized that external constraints have specific
effects in different ways and with different capacity on the planning process. The
organizational conditions are evolving constantly, and the capacity to predict changes
declines reliably since environmental uncertainty increases for the organization. The best

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methods for a company in order to accomplish its goals become more difficult to decide.
Predictions are likely to be more successful in more secure conditions.

From what have been said, hypotheses that can be generated about the impact of
environmental factors on the effectiveness of strategic planning, and therefore on the
performance of the organization are the following:

The more the organization adapts its strategic planning process to its environment (e.g.”
the organization should take in consideration the factors influencing its strategy and take
corrective actions according to the data gathered”), the more successful it is (e.g. “the
formulated strategic plans enable the organization to obtain successful results”).

The more turbulent the environment is, the harder is for an organization to set an
effective strategic plan.

Internal Organizational Barriers

Like in the case with the external factors, internal organizational factors can also
represent threats for organizational management and constitute potential boundaries
to the SPFP (Strategic Planning Formation Process). Internal organizational changes
could present a real challenge for management and executives. Organization’s
culture, structure, the leadership commitment, lack of financial resources,
performance management and the weak strategy thinking, are considered to be the
most relevant internal factors that influences the SPFP (Kiptoo & Mwirgi, 2014, p.
189).

Organization’s Culture

The definition of organizational culture had constituted an interest to many of the

subsequent researches regarding organizational effectiveness, however, there still no
common definition to this concept. Fleury (2009, p. 2) defines the culture of an
organization the values and meanings that effect human behavior and organizational
practices. It is also defined as a set of shared beliefs and traditions, principles and
traditions that are acquired involuntarily through group experience and outline, in a basic
way, an organization’s view of itself and its atmosphere. Organization culture is
considered to be one of the most significant internal organizational elements that gained
large attention in the management literature. In recent times, focus has been on
recognizing and developing a culture which promotes agility, encourages alliances,
facilitates management of knowledge, fosters corporate responsibility and moral
integrity; and embraces variety.

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Different interpretations were found in the literature that treated organizational culture
and its influence on the strategic planning process and organizational performance.
Many early supporters of organizational culture had a tendency to assume that a robust,
persistent culture was beneficial to all organizations because it raised motivation,
engagement, identity, unity, and uniformity, which in turn smoothed internal integration
and harmonization. A strong culture may also be a way to exploit and co-opt. However,
a robust culture and its integrated controls can lead to unconstructed self-demand and
obstacles to adaptation and change. Moreover, organizational culture can contribute to
resistance to achievement of aims or the creation of goals, because behavioral norms
and behaviors are so crucial that the original intent is being overshadowed. Although a
strong organizational culture was commonly regarded as a conserving power, it might
be toxic for companies that concentrated on change. An organizational culture strong
(fairly stable) does not automatically contribute to change resistance from the
organization (Janicijevic, 2012, p. 129). Regardless of the difference in opinions
regarding the advantages or challenges related to strong culture, the literature shows
the lack of positive improvement in organizational culture as the first reason for the failure
of the most significant planning activities. In other terms:

The stronger is the organization culture (e.g.” when the organization and the employees
are attached strongly to the culture of their organization”), the more negative is its impact
on strategic planning (e.g.” the main objective of strategic planning is overshadowed”).

Organization’s structure

Ahmady et al. (2016, p. 455) defines organization’s structure as the connections between
the components of an organization. It is the framework of the network on functions,
systems, operational process and human resources making efforts to attain shared
objectives. Organizational structure is then a set of procedures dividing the task to
determined responsibilities and obligations and coordinates them, it is formal
organizational structure of mission allocation, coordination and supervision that is
directed to the accomplishment of organizational goals.

The relationship between organization structure and strategic planning has been
debated by several researchers. Though, empirical studies of this relationship remain
uncommon. This relationship is even more noticeable when the strategies are generated
from the strategic planning process, because the tool itself tends to restrict the flexibility
of internal processes, which is precisely one of the criticisms of the organizational tool in
question. The understanding of the structure of the organization is crucial in the
development of the strategic planning process. When the structure is not well-matched

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with the strategy, it represents a constraint for strategy formulation and implementation.
(Neis et al., 2016, p.480).

Poister (2010, 252) claim that strategy is the way to change and adjust the relationship
between an entity and its environment, in turn, all internal systems and processes must
be in line with the strategy if this adjustment is to be effective. They added that when
organizations plan strategically, they face not only planning problems but administrative
problems (selection of the appropriate structure). He claims that the administrative
systems have a "lapping" and "leading" relationship with strategy: the lagging variable is
the implementation of correct frameworks and processes which will streamline the
administrative system. The operating structure will, as a leading variable, promote or
restrict the potential adaptability of the company. Due to this solid relationship,
organizational structure can either make the strategic planning formation process easier
or more difficult. Therefore, it was included as one of the potential obstacles.

Leadership commitment

Strategic leadership is considered as an important component in effective strategic

management, and hence, to impact the efficiency of the strategic planning process.
According to Mubarak & Yusuff (2019, p. 34), leadership is a behavioral arrangement
that urges and impulses persons inside the company to define organizational goals and
then encourage them to contribute together with a specific goal to achieve strategic
goals. Strategic leadership has a pivotal role in ensuring company success while
maintaining the effectiveness in organizational operations. It is necessary to motivate
and support leadership behavior towards its subordinates. All should be included within
the organization, because it is greatly linked to results. Leader commitment and devotion
is a key in achieving the strategic goal. There should be commitment, engagement and
participation from the very top of the group. A leadership’s lack of commitment might
constitute a boundary to the strategic planning process. Leaders therefore must
contribute in the proper design of strategic planning systems and take strategic planning
systems as useful in serving them in changing things. Arguably, a well-designed strategic
planning system will not only aid leaders in enhancing learning capacity, but also in to
opening up their organizations to more effective businesses and to the needs of the
customers.

Strategic issues are significant boundaries to the strategic planning process implemen-
tation and have the most negative impact on its accomplishment. These obstacles are
principally associated to the management and the leadership of the company. The com-
mitment of top management is considered to be the most relevant factor of success or

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failure of the strategic plans. The most critical barrier of the success of the strategic
management implementation is the lack of involvement of top management, which can
lead to failure (Ansarian & Mosadeghrad, 2014, p. 197).

Ansarian & Mosadeghrad (2014, p. 197) add that top management’s limited experiences
and training in organizational management represent the main barriers to their active
involvement in the strategic planning process. The absence of commitment of leadership
is relative to the lack of knowledge, management turnover and also an ineffective
communication between managers and collaborators. Moreover, it was found in the
literature that the formulation of strategy is related to the personal attitude and personality
of the leaders. Management priorities, philosophies, ideologies, perceptions and
strategic factors have been linked to the development of strategy and therefore to the
success of strategy. Cultural principles on executive’s open-mindedness towards change
also impact the leadership commitment. Culture has an important influence on executive
mindsets, as demonstrated by the fact that executives with different cultural backgrounds
are not likewise open to change. Leaders’ ethics help in influencing executives’ strategic
and leadership orientations, even in the context of substantial environmental change,
managers are not evenly open to adjustment, which can hamper the strategic planning
process. Many of executives grow a solid personal attachment to existing policies which
hinders adjustment in organizational strategy and therefore impact negatively the
strategic planning process. Expressed as hypothesis:

The more top management is engaged in the strategic planning process (e.g.” when
executives are involved in the decision-making process”), the more effective it is (e.g.”
the more the strategic planning enables the organization to reach and attain its
objectives”).

Lack of Financial Resources

The formulation of strategy and plans requires understanding the environmental factors
as well as checking the availability of resources and the organizational skills. According
to Kabeyi (2019, p. 30), a poor budgeting or financial constraints might lead to failure in
implementing an effective strategic plan. Managers and executives who start planning
and creating timelines without thinking about the availability of financial resources in de-
cision making process are just like when persons don’t take into consideration finances
when planning to go for a vacation, moving, or retirement. Considering financial re-
sources is important when comes to organizational planning.

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Performance management

At the core of most performance assessments and management methodologies lies

harmony between success and strategy. Several researchers have emphasized that this
alignment is significant, as the strategy can promote and support the implementation of
strategy through aligned performance measurement. The benefits of strategy-aligned
performance measurement can be listed as following: giving information to the
organization regarding strategic direction and communicating strategic priorities;
Monitoring and following strategy implementation; Bringing into line short-term actions
with long-term goals; Rendering both goals and means clear; Making strong the
associations between performance of individuals and sub-units; Endorsing integration
among various organizational procedures; Concentrating on changing efforts and
allowing organizational learning (Gimbert et al., 2010, p. 489).

From the above benefits it’s clear that performance measures are important not only at
the implementation stage of the strategic planning process but also during the phase of
formulation. Consequently, lack of performance measure is considered as a potential
limit to the strategic planning formation process. Expressed as hypothesis:

The more effective are the performance measurement (e.g.” when the organization
doesn’t ignore the importance of measuring performance in both formulation and
implementation phase), the more effective is the strategic planning process (e.g.” when
the strategic planning allows the organization to achieve its desired results).

The need to adapt management control systems to help the development and execution
of organizational strategies is reflected by the increasing in numerous journals. It is also
recognized that when strategy changes, performance measures must be reviewed and
if needed, changed to be aligned with the strategy. When this is not done then it will be
likely a risk that performance measurement could become unrelated or
counterproductive. Having a strategy-aligned measurement is especially required for
organizations whose strategy is constantly evolving, often as a result of their work in
highly competitive environments. Measuring performance is integral in the process of
resource allocation decision-making, generating added value for customers, and also
making the organization gain a sustainable competitive advantage (Baird, 2017, p. 4).

Weak strategic thinking

The character of strategic planning has intensely evolved so that it is now more suitable
to mention to it as strategic management or strategic thinking. However, strategic
thinking has been investigated in both the psychological and management literature. The

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psychological literature concentrated on elements influencing strategic thinking and

decision making while the management literature has focused on the process of strategic
thinking and making strategic decisions. strategic thinking is defined as thinking about
probable situations and strategy in a creative way that is relatively free from existing
limits, as a process by which senior managers can rise above the day-to-day managerial
procedures and crises. The concept of strategic thinking can also be perceived as a
method of resolving strategic issues that combine a balanced and convergent tactic with
creative and divergent thought processes (Bonn, 2005, p. 338).

Other authors have shed the light on strategic management processes and either
claimed clearly that good strategic planning contributes to strategic thinking or presumed
indirectly that a well-designed strategic management system eases strategic thinking
within an organization. Mintzberg (1994, p. 144) recommended a pure distinction
between strategic thinking and strategic planning. He specified that “strategic planning
is not strategic thinking‟ and claimed that each concept concentrates on a different phase
in the strategy development process. He requested that strategic planning is a process
that must arise after strategic thinking.

The importance of strategic thinking in the strategic planning process is well founded in
management literature. In different phases of the planning cycle, the importance of
strategic thinking is noted. Before the process (strategic planning is a process that should
occur after strategic thinking, after the planning process (good strategic planning
contributes to strategic thinking,; and also a result of strategic planning (strategic
planning is intended to enhance an organization’s ability to think, act, and learn
strategically. Strategic thinking is about trying to anticipate and bring about a
desirable future and an overall organizational performance, in the long-term through a
sequence of short-term actions. (Betz, 2016, p. 58).

Some scholars noted strategic thinking as an obstacle or challenge for the process of
planning. According to Lowder (2009, p. 13), strategic planning and strategic are distinct
but mutually dependent. The key strategic planning issue recognized by most senior
managers was strategic thinking. He added that strategic thinking represented a
challenge nevertheless of whether organizations had formalized or non-formalized
strategic planning processes.

Other Internal Barriers

As mentioned previously, the literature recognized and considered many internal

organizational obstacles to SPFP as significant influencing factors. Many other internal

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hurdles have been identified, including company procedures and regulations; the
process of strategic planning itself and the expertise of the planner.

According to Caralli et al. (2016, p. 2), company procedures and regulations may be
defined at various levels in an organization and they might be correlated in a hierarchical
way. For instance, a company can have a set of standard processes that are customized
to create a set of standard processes through particular organizational units (e.g. a divi-
sion or site) within the company. The collection of standard processes can also be cus-
tomized to match the business lines or product lines of each company. Thus "the collec-
tion of standard processes of the organization" may refer to the standard processes de-
veloped at the level of the organization and to standard processes which can be defined
at lower levels, although some organizations may have only one level of standard pro-
cesses. Multiple standard processes may be needed to address the needs of different
levels of organizational units or disciplines (safety versus continuity of business, for in-
stance). The set of standard processes of the organization contains process elements
which can be interconnected according to one or more process architectures which de-
scribe the relationships between these process elements. Standard processes set by the
organization typically include processes of technical, management, administrative, and
support. The collection of standard processes for the organization would collectively
cover all processes needed by the organization and its units. A strong model of business
process influences the development of the strategy of the organization. Organizational
processes should be related to the strategic purpose and performance of a company in
order to be ensure that specific value is delivered to end consumer. Processes that are
not closely linked to the strategy may be misfocused or too limited to reach the intended
goals.

Since people are at the center of any organization, the way they act and cooperate with
each other impact the decision-making process as well as the strategic planning.
Planners might need to become catalysts and change the way they behave for the
progress of strategic organizational planning. The planning process can be made fun,
simple, exciting and important to the various parties involved with a little imagination and
innovation. Four key functions should be included in the role of planners, and these are:
continuously improve and refresh the maps used in key decision-making roles by
managers. A second feature is that of reality tester, this ensures that the linkages in the
decision-makers' trigger maps are checked. The 3rd function concerns development and
interpretation of strategic issues in top-level management. The last one is to help to
create and organize the ad hoc and structured organizational structures (Schraeder et
al. 2014, p. 50). According to Maleka (2014, p. 23), only the planners who see the whole
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image of the organization and its surrounding environments can make the decisions that
bring about competitiveness; therefore, the effectiveness of the strategic planning
depends on the expertise of managers.

The above discussion indicates that internal organizational barriers differ in nature,
effects and ability, and that certain internal barriers to certain organizations that affect
their strategy might not be perceived as barrier for others. The planning process can also
be considered as an obstacle to the formation of strategic planning. When the design of
planning process is not well-made, taking into consideration the sequence of operations,
the involvement of stakeholders, consensus between different parties, availability of
resources, control structures and organizational features, the planning process may be
an obstacle to the smooth development of strategic planning. In addition, it has been
found that organizations and the persons themselves are responsible and contribute in
the creation of the constraints and barriers they have to face.

The more the organization controls its internal environment (e.g.” when the firm takes
into consideration all the internal factors that impacts its strategy”), the more performant
is the strategic plan (e.g.” it enables the firm to achieve its objectives”).

2.4 Strategic Planning Formation Process

From a planning standpoint, strategy is formulated following a sequence of balanced
analytical phases including mission and vision statement, external and internal analysis,
strategic control, etc. (Andersen, 2000, p. 263). The process of formulating corporate
strategy involves: developing a business mission, vision and creating long term
objectives; Identifying external opportunities and threats (external analysis); Determining
internal strengths and weaknesses (internal analysis); Generating and crafting
alternative strategies (strategic options); Evaluating the alternatives and choosing
particular strategies to pursue (reimplementation evaluation). Issues relevant to the
formulation of strategies include determining which new business to pursue, which
business to leave, how to distribute capital, whether to expand or diversify operations,
whether to penetrate foreign markets, whether to combine or form a joint venture and
how to prevent a hostile corporate takeover. All these are acts that can only be taken
through very careful preparation based on information obtained from both external and
internal contexts regarding intelligence.

The implementation of the strategy is an operations-oriented process that administrators

use to get stuff done. This is perhaps the most time-consuming and challenging aspect
of the strategic management process. It involves the preparation of a strategic plan which
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sets annual goals, establishes an effective organizational structure, fixes a budget,

develops a viable information system and generally sets up a work plan for the execution
of tasks. This also includes empowering workers, establishing a community of support,
allocating resources and relating compensation for workers to the company etc... Even
when the strategy is well formulated, still it can remain unsuccessful due to a bad
implementation. Hence, the implementation of strategy is considered to be the most
challenging and problematic phase for managers, in the strategic planning process
(Baroto et al., 2014, p. 51).

The strategy evaluation is the final stage of the strategic management process, and it is
the way an evaluation is performed to decide whether or not an organization is on track
to meet its set goals. There are three main strategic assessment tasks: evaluating
external and internal variables that form the basis of the current plan; Measuring results;
Comparing actual output with set goals, targets or objectives of the plan; Assessment of
corrective measures. Strategic planning is a complex managerial tool that helps business
to improve their overall performance, and thus is only possible when it enable the
organization to cope with rapid environmental fluctuation and resolve issues related to
global management, and to do so, evaluation is a crucial process in the strategic planning
formulation. Two assessments should be done: the first one to examine the internal and
external environment of the organization, and the second one during all the process to
see where the firm stands, and if the actions it takes will lead to the desired results or
their should be some modifications in the plan (St-Hillaire, 2011, p. 41).

The phases of the strategic planning formulation process (SPFP) cycle are discussed
comprehensively in this section. Those include implementing and deciding on the
strategic planning process; organizational mandate; vision creation and communication;
production and communication of missions; environmental assessment; policy issues;
implementation of policies and plans; and monitoring and evaluation. While the steps are
outlined in this order, it's important to note that the method of strategic planning isn't
linear. The phases can overlap or occur in parallel, or even the entire cycle may go back
and forth (Bryson et al., 2009, p. 175). The concept of key elements, the purpose of
carrying out the steps in relation to the entire planning phase, as well as the anticipated
benefits, will be addressed for each stage of the SPFP.

Initiating and agreeing on the strategic planning process

The strategic planning process starts by identifying the need for strategic planning; once
the need is understood and the value of strategic planning is conceptualized, an initial
agreement on the overall strategic planning strategy and consensus on the key steps of

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the planning phase should be established. The goal of this phase is to agree on the need
for and desirability of strategic planning, and that all participants are "on board," engaged
and respectful of the planning process and its various sequence of actions. That is,
consensus on the “how to prepare "(Meijaard et al., 2013, p. 20). Since this move needs
the approval of key players and external stakeholders, a stakeholder review would be
helpful at this early stage in deciding who will be part of the agreement process. The
participation of various stakeholders would improve the consistency of the strategic plan.
Therefore, companies need to seek input from all stakeholders to create a strategic
quality plan.

Some note that the assessment of organizational structure, leadership, and culture
should be performed at the pre-planning process, others state that the agreement on the
strategic planning process will define in this first step: the purpose or aim of the strategic
undertaking; the preparation steps; the expected outcomes; group members ' roles and
responsibilities; and the agreement to include sufficient resources to complete the
strategic planning process (Meijaard et al., 2013, p. 20).

A number of benefits are expected from the initial agreement step. These are: first,
recognition of the purpose and worthiness of the planning process by the main
participants in the process, which will lead to a broad sponsorship and legitimacy. The
second expected benefit is the creation of a communication mechanism across the
organization, such as a strategic planning task force or coordinating committee which
will coordinate, communicate, and solve issues relating to the planning process. Without
such mechanisms, conflicts during the planning process may arise. The third advantage
of the initial agreement consists of an overview of the general sequence of measures to
be undertaken when strategically planning. Procedural rationality of the method means
that the planning procedure is logical, consistent, and follows a sequence of steps in
which each step relates to prior and successive steps. A fourth advantage of the initial
agreement is the political support of key decision-makers over strategic concerns that
might emerge during the process, and the coalitions around those concerns. A fifth
benefit of the original agreement is access to the planning resources required. It takes
financial resources to implement strategies and plans. While this may sound far ahead,
the implementation process also needs to be considered for the planners to prepare
according to the allocated budget at the initial stages. Nevertheless, financial resources
are not the most valuable tools available for strategic planning: more valuable is the pace
and commitment of decision-makers (Bryson, 2009, p. 176).

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Clarifying organizational mandate

Before an organization can define its mission and values, it should clarify its mandate.
An organizational mandate clarifies what other parties expect the company to do or not
to do formally and informally. Formal specifications include the constitutional structure of
laws, regulations and charters and articles of incorporation which regulate the operations
of an entity. Organizations often have to meet a number of implicit directives expressed
in core stakeholder standards or aspirations which represent the informal requirements.
The mandate of an organization clarifies what the organization is supposed to do
(Bryson, 2012, p. 61).

It is very important to clarify the mandate of the organization in the beginning og the
strategic planning formation process. In this phase of the cycle, there two key
advantages: first, clarification of what is necessary, secondly, definition of what is
specifically and indirectly required or prohibited. The specificity about what the company
needs will improve the ability of managers to formulate more specific priorities. The more
precise and straightforward the goals, the greater the probability of achieving them
(Bryson, 2012, p. 63).

Establishing an effective vision

Developing an effective organizational vision is one of the key factors for the success of
the strategic planning formation process. Over the last decades, the significant role of
establishing a good vision has been observed by authors of the literature of strategic
management. According to Akeem et al. (2016, p. 127), the aim of integrating the
creation a vision of the organization in the planning process is to create an external
trustworthiness and encourage an internal culture of sharing the same goal within the
organization that supports this vision, and thus, through creating a common purpose and
implicate the ensemble of personal in the journey of working to achieve it.

The vision of an organization has been explained in a number of ways. For instance,
Papulova (2014, p. 13), defines it as an image of the future. A vision is the success that
each person of the team wants to achieve, the value they work to create in the future.
The vision statement directs the organization and preserves its existence and presence
in the market. The expression: vision of the organization is perceived as a mental image
of a fascinating future situation. Papulova (2014, p. 13) recommends that in order to
establish an effective vision, the vision should be: simple and understandable,
memorable, optimistic, motivational, inspirational, attractive, challenging and future
oriented. He adds that without the connection between the organization’s vision and its

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employees, vision can’t be effective. Prodigious visions not only require good thinkers
but also leaders who can connect the vision to others and get support from collaborators.

A range of advantages are expected to arise while creating a successful vision. As found
in the literature, these benefits can be summed up into six benefits. First, the vision helps
corporate leaders and stakeholders understand the organization's overall purpose and
why and how to do it. The key reason for making a vision statement is the making the
organizational direction clearer and more precise. Secondly, the vision should offer
guidance to the leaders of the company about what is required from them, how they fit
into the overall image, and provide a basis for creativity for organizational purposes.
Another potential advantage suggested is that a well-developed statement of
organizational vision is an efficient replacement for leadership as workers can handle
themselves when given clear instructions on the course of the company. Fourth, an
agreed-upon vision will lead to a substantial reduction in the degree of organizational
conflict, in conjunction with the third profit. When the workers recognize the general
purpose of the company, it is possible to settle conflicts over such problems, measured
by their organizational value. Fifth, a well-articulated vision will enable people to
understand the goal by understanding the existing or future obstacles. The first step in
overcoming obstacles is understanding them. The last advantage noted in the literature
is that a well-developed vision should provide a central structure if the company is to
respond to changes in its environment in a purposeful and flexible way. In other words,
a good vision would enable the organization, while willing to adapt, to hold on to its core
(Suranga, 2014, p. 35).

Mission statement

Vision statements and mission statements are both based on the organization’s core
ethical principles. They are very essential in the process of strategic planning, as they
direct and guide the organization to be successful. While the statement of vision is a
general definition of an organization's ideal future state, the statement of the
organization’s mission refers to the concrete contributions expected by the organization
to the realization of vision. An important mission statement answers to the following
concerns: Why does the organization? What are the core functions of the organization?
And to whom are the services and goods of the company supposed to serve? According
to Bowen (2018, p. 1) mission statements are more precise and relevant to the
competitiveness of the organization; The mission statement of an organization is a
specific yet concise concept which explains the reasons for the existence of an
organization.

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A variety of benefits in designing and communicating a successful mission statement

have been identified in the literature. The most significant advantage is to concentrate
on what resources are necessary to achieve the goal of the company. The second
important benefit is the clarity of the organizational intent. Clarifying the organizational
intent will lead to a reduction in decision-makers ' disputes and will promote more efficient
leadership. The third expected positive point is that the consistency of the mission of an
organization will enable leaders to express an efficient organizational framework,
establish integrated structures and allocate in a more optimal way the necessary
resources in accordance with the expected goals of the organization. Another expected
benefit from this phase is paying attention to the ideology, values, and culture of the
organization which supports the mission of the organization. For instance, the strategies
established should be compatible with organizational theory, principles and culture; thus,
the task of an organization unifies aim through tangible and intangible organizational
purposes. Hence, a good mission statement is beneficial and crucial to the success of
the strategic planning process, and therefore it enhances the performance of the
organization (Mosoma, 2014, p. 95).

Assessing the environment

In the literature, environmental evaluation was recognized as one of the key phases in
the process of strategic planning formulation (SPFP). The world in which a company
works has become more dynamic, quicker to change, and more demanding. The world
is living in "an age of discontinuity,". Therefore, it is important for an organization to be
aware of the internal and external forces that could shape its future. Senior executives
have to scrutinize the highly competitive organizational environment, to recognize core
capabilities and evolution opportunities based upon the organization’s unique
competitive advantage (Bowen, 2018, p. 6).

Monitoring, evaluating and disseminating information from the external environment to

key personnel within an organization is known as environmental scanning. The
environmental scanning refers to the managerial activity of learning about events and
trends in the organization’s environment. It is the process of acquiring and using
information about tendencies, movements and relationships in the external environment
where the organization operates, which supports management in preparation actions to
be undertaken in the future (Mufzada, 2018, p. 3). Environmental scanning can yield a
number of benefits for decision-makers within the organization, for example, it will help
in detecting environmental signals. Moreover, scanning provides managers with
knowledge about events and patterns in their specific environments, enabling the

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identification of opportunities. Environmental scanning is also a process of decreasing

uncertainty. Scanning will help managers face incertitude, but only if they understand
that it is important to reduce uncertainty, not remove it.

Strategic tools are used to evaluate the external as well as the internal organizational
environment as one of the main steps within the SPFP. Strategic tools refer to principles,
theoretical structures, strategies, and methodologies that help strategic managers make
informed decisions. Strategic tools can also be defined as an enabling mechanism for
enhancing strategic thinking and decision-making process. The efficient use of strategic
tools by organizations facilitates the identification of strategic problems (the following
phase deals with strategic problems). Many types of strategic tools existent and serve to
be guide for managers. For instance, Qehaja et al. (2017, p. 585) listed the ten most
used strategic tools and techniques worldwide as following: SWOT analysis,
benchmarking, PEST analysis, “what if” analysis, vision and mission statements, Porter’s
five forces analysis, business financial analysis, key success factors analysis,
cost-benefit analysis and customer satisfaction. In their study, Qehaja et al. (2017, p.
570) listed the most used strategic tools by organizations depending on the country they
operate. Elbanna (2013, p. 433) conducted a report on the usage of strategic planning
methods in UAE and found that the three most commonly used strategic planning
methods are financial statements pro forma, cost-benefit analyzes, and SWOT analyses.
Elbanna added that the heavy use of financial statements pro forma and cost-benefit
analysis could be a sign of business strategy for the short term rather than strategic
planning. Aldehayyat and Twaissi (2011, p. 258) studied the usage of strategic planning
methods and techniques in Jordanian organizations and found that financial analysis,
PEST or STEP analysis, Porter's five-force analysis and analysis of main (critical)
performance factors are the most widely used techniques. Researchers also noticed that
the use of strategic planning methods and strategies was more closely linked to
organization size and less to age.

Strategic issues identification

Problems management is an ongoing method of recognizing issues that may impact the
organization's strategic goals and the probability of their occurrence. Through the
identification of strategic problems, managers can pay more attention to what really
matters and counts for the success of the firm. Most of organizations use by the 80-20
rule in their decision-making process (i.e. 80 percent of their effort is spent on only 20
percent of the least important tasks, which make many of the establishment's rare
resources unexploited). When executives detect the factors that impact their

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identification of problems, they will be able to prioritize actions to deal with and manage
with those issues, therefore, the process of strategic issues identification is important in
the process of strategic planning formation process (Abedin el al., 2015, p. 29).

During this phase, the management process is considered to include three main stages:
(1) reviewing the external environment to identify strategic issues; (2) evaluating these
issues for their strategic effects and their probability of occurrence; and (3) designing
effective responses to address them. This step in the process of strategic planning
defines strategic problems based on the strategic analysis performed in the preceding
phase. The following phase "developing policies and plans" is left to develop effective
responses to strategic issues. The issues addressed under this phase are those with
strategic implications. The secret to success for problem management must be its ability
to uncover and monitor specific problems affecting the corporate or business unit's
strategic path (Abedin et al., 2015, p. 36).

According to Heath (2002, p. 32), the elements of problem management function more
efficiently when they are combined as proactive, practical and multidisciplinary. The
management of Issues is not limited to only one department in the organization.
Managing issues is foremost a way of thinking from management down and from
operations up. It refers to a proactive process that associate many disciplines together
to make the organizational decisions smarter, the firm nimbler and more visionary, and
also more ethical.

Strategies and plan development

Following the previous step, this section addresses the third stage of the issue
management process, which establishes and suggests effective solutions to the main
issues facing the strategy formulation process. The success of carrying out the preceding
phase will influence the outcomes of this step, such as designing suitable strategies and
reviewing alternative strategies. Management issues contribute to the strategic planning
process by providing up-to-date and coordinated information on both external and
internal problems (Abedin et al., 2015, p. 36).

There is no common definition of the word strategy; it can be seen as a sequence of

goals, policies, initiatives, decisions, and distribution of resources specifying what an
entity does, how it does it, and why. Each organization demonstrates some kind of
pattern or logic through its goals, policies, services, and optimal allocation of resources,
although this may not be a good pattern or logic. The role of formulating a strategy
includes identifying what is good about the current model, what is bad about it, and
changing it as appropriate to bridge the distance between the company and its
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environment. According to Poister (2010, p. 248), the formulation of strategy is done by

top managers and line executives, with the support of planners. Analysis of strategic
issues must be based on extensive gathering of intelligence, including "soft" data rather
than intensive number crunching; and formulating strategies should be influenced by
experience, intuition, inspiration, and even hunches, as well as a keen sense of political
feasibility.

The purpose of the phase of strategies and plan development in the strategic planning
formation process is to concentrate on developing deliberate strategies that resolve the
strategic issues defined in the previous stage. Therefore, this phase is dedicated to the
development of a collection of objectives and related plans that will effectively connect
the company to its environment to achieve organizational goals and its vision (Shobaki
et al., 2016, p. 44).

The development of strategies and plans is supposed to offer a range of benefits. First
one, the specificity of the direction that the organizations are taking to build public
interest. This will explain and justify the resources used to address numerous strategic
problems as strategies and plans are formed. Second, enhancing organizational
learning, and early implementation of strategies that would allow early detection of the
suitability of strategies used and the ability to revisit strategies before being completely
implemented. Third, is increasing the engagement of leaders of the company and
establishing an emotional connection with the new reality. Fourthly, boost organization-
wide coordination. Strategy formulation involves a high degree of coordination between
the different units from which new communication channels can arise. Fifth, creating a
partnership with outside stakeholders to promote policies and proposals to be adopted.
The formulation and development of strategies and plans are essential management
functions in the strategic planning formation process. The execution of an excellent
strategy is the finest and the most reliable formula for conversing organizations into
standout performers (Tapera, 2014, p. 123).

Monitoring, evaluation and control

Over the past decade, performance measurement in institutions has drawn a great deal
of interest from researchers and practitioners in various fields, such as the design of the
measuring system, its application, the use of the system and the quality of the measuring
systems. According to Richard et al. (2009, p. 719), reaching an overall performance is
the ultimate goal of organizations, and this is what made measuring it in center of man-
agement researchers and scholars. Measuring the efficiency of an organization is crucial
since it allows executives to evaluate and control the execution of specific actions of

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firms, determine the position where they stand regarding their competitors in the market,
and how the organization grow and perform over time.

Although integrated performance assessment is important in both private and public

organizations, there seems to be a common view that public and private organizations
vary from a measuring point of view. The existence of many stakeholders with specific
and contradictory criteria causes two efficiency metering problems. First, taking into
account all stakeholders, a multitude of performance measures can be generated which
satisfy none. Second, setting expectations or making decisions based on measurement
outcomes can be challenging as some of the stakeholders have competing goals. Many
problems have been established aside from the two basic issues. Elbanna et al.'s (2016,
p.1033) report, for example, revealed some barriers that may hamper the acceptance of
performance measures. Those are calculation mistrust; lack of integrity and usefulness;
lack of expectations and timeliness; substantial expenditure of time and resources; and
resistance on the part of elected officials and employees.

Given past difficulties and issues, by aligning performance management systems with
corporate strategy a range of benefits are expected to arise. Some of these advantages
include communicating strategic priorities; monitoring and tracking strategy
implementation; assessing outcomes; aligning short-term initiatives with long-term
strategies; and facilitating alignment between different organizational processes. In
addition to those benefits, the performance assessment method will concentrate on the
improvement of activities and encourage organizational learning (David, 2011, p. 292).
David (2011, p. 293) adds that the evaluation of strategy process includes three main
activities: the examination of the fundamental bases of the organization’s strategy,
establishment of a comparison between predictable results with concrete ones, and
finally setting corrective actions to be undertaken in order to ensure that performance
follows to plans.

Significant progress has been made in linking performance assessment systems with
design and implementation organizational strategy through the use of a common method
which are: a balanced scorecard method; the results and determinants framework; the
performance prism; and strategy maps. The literature also acknowledges that, as the
strategy changes, whether intentional or evolving, whether guided by changes in the
external or internal climate, performance metrics need to be checked and, where
possible, modified to ensure consistency with the strategy. If this is not done then there
is a danger that measurement of success may become meaningless or
counterproductive (Richard et al., 2009, p. 724).

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A final point to make is that, as a result of performance management programs, tracking

and assessment of plans and strategies happens before and after execution of plans
and strategies. Nonetheless, this step has been regarded as one step in the SPFP be-
cause the approaches will be used as an input to establish and formulate strategies and
plans for the time to come. The company's managers and employees should keep
abreast of progress produced against the company's targets. When crucial performance
factors change, leaders of organizations will be active in defining necessary corrective
measures. If expectations and predicted goals vary significantly from projections, the
company will then renew strategic-formulation operations, maybe earlier than expected.
People make the difference in strategic evaluation process, like in the process of formu-
lation and implementation strategies. By engaging in the strategy evaluation process,
executives and employees commit to keeping the company going steadily towards
achievement the desired results (David, 2011, p. 290).

Implementation of strategies and plans

A correct strategy formulation and its effective implementation is very crucial to attain
successful results, however, when an ordinary strategy is implemented effectively, it is
better conceived than ordinarily implement an excellent strategy. The strategy
formulation process must be closely connected to strategy implementation in order to
avoid having a useless strategic plan. A strategy is only useful and effective only when,
it is implemented effectively and reflects positive outcomes for the company (Baroto et
al. 2014, p. 50).

The implementation phase is an operations-oriented stage where executives must make

plans happen. Arguably it is the most challenging and time-consuming step of the
strategic management process. It necessitates making a strategic plan that sets out
annual goals, creates an effective organizational structure, determines the financial
resources, develops a practicable information system and generally strategies that a
company sets for plan execution. It also includes motivating employees, involves the
creation of a supportive culture of the organization, assignment of the needed resources
and connecting employee recompence to the organization (Kabeyi, 2019, p. 29).

Implementing policies and objectives completes the strategic planning process. SPFP's
preceding steps result in a successful formulation cycle. However, this is not adequate
to achieve the strategic objectives. Implementing the strategies, initiatives, and action
plans created would bring the objectives to life and build concrete values. The
implementation process would encourage adaptive learning within an organization, and
such learning would lead to a deeper understanding of SPFP, then leading into the new

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strategic planning phase. Through implementation, firm performance can be evaluated

and assessed, and then corrective action can be taken (Tapera, 2014, p. 128).

The implementation process is the most significant purpose of the entire strategic
planning formation process. An efficient implementation would allow the organization to
create value and move the value proposition expressed in the strategic plan from being
a hypothetical tale to be a real story. A successful strategy implementation would also
give managers the opportunity to evaluate the tactics and plans, which is necessary to
take corrective actions and attain the desired results. Another significant advantage of
strategy implementation is increasing the level of trust and faith of workers and society
in the organization’s leadership. When the policies and programs are effectively
executed, and benefits are recognized (Palladan & Adamu, 2018, p. 3).

2.5 Strategic planning and Innovation

Knowledge and innovation have always represented critical factors for the advanced
economies in today’s competitive business world. According to Taoiseach & Kenny
(2020, p. 7), Innovation has always been one of the fundamental reasons behind the
enhancement of productivity as well as fostering competitiveness of organizations.
Innovation is meaningfully participating improving employment, economic growth and
competitiveness of organizations. Therefore, an investigation of the role of innovation in
making the organization performant, and how strategic planning impacts innovation
within an organization is crucial for this thesis.

The origins of the term innovation come from the Latin expression: “innovare”, which
refers to change (Tidd & Bessent, 2011, p. 19). The word Innovation means process by
which new ideas are created and exploited successfully. It is a process by which
managers turn existent opportunities into new creative ideas and make them happen in
the reality. Innovation is also defined as the acting of bestowing resources with a new
capability to generate prosperity.

Literature about the impact of strategic planning of the organizational innovation shows
contradictory point of views (Arend et al. 2017, p. 1741). The experimental evidence
proposes that setting strategic plans and developing newer product (NPD) projects will
help the organization to achieve better performance. Companies with more
administrative redundancy use more strategic planning than other businesses that have
less organizational redundancy. Increasing research & development intensity improves
at the same time the amount of new product development projects and also the overall
organizational performance (Song et al. 2011, p. 503).
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Larger companies tend to have more effective strategic planning process with a more
sophisticated research and development department, with participate in a remarkable
increase in the quantity of new product development projects. The outcomes testified in
the study conducted by Song et al. (2011) also contain numerous findings that constitute
a real challenge for the traditional strategic planning views. The results show that the
number of NPD projects is impeded, not enhanced by the strategic planning process.
Bigger organizations benefit less, not more, from strategic planning in the process of
improvement of the overall performance. Bigger companies do not necessarily produce
more NPD projects and the theory that stands for the increase organizational redundancy
impacts the number of NPD projects is declined.

These empirical fallouts deliver significant strategic implications. First one, executives
have to be more conscious that, in general, a formal and strict strategic planning process
participates in reducing the number of NPD projects, and thus impacts innovation
management. Following spontaneous activities rather than planned one would be more
encouraging to creating NPD project ideas. Besides, innovations have a tendency to
arise from improvisational processes, in which the unplanned execution of NPD activities
without preparation outgrowths ‘‘thinking outside the box,’’ which improves the process
of NPD project ideas creation. Hence, more supple strategic plans that accommodate
potential creativeness can be required in new product development management as
innovation-related activities can’t be prearranged precisely, and this is due to the
unpredicted surprises and contingencies of the NPD process. Expressed as hypothesis:

The more flexible are the strategic plans (e.g.” the organization can change accordingly
to the environmental fluctuations”), the more enhanced is the innovation (e.g.” when the
organization produces more creative and innovative ideas”).

Secondly, the negative impact of strategic planning on the number of new product
development projects can be overcome in big companies that have a high level of
research and development intensity. Specifically, an organization can allocates plentiful
resources for NPD activities and signal a high importance and attention for it, and thus
enhance employee’s motivation towards acquiring, collecting, and gathering customer
and practical knowledge, which make the firm start creating more NPD projects, and
therefore it becomes more creative and innovative. In other terms:

The more the organization invests in R&D (e.g.” when the firm allocates a good budget
for the R&D department”), the more it enhances the innovation (e.g. an increase in the
number of new creative and innovation ideas produced within an organization”).

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Lastly, executives have to recognize that managing strategic planning and creating new
product development project ideas are advantageous in order to generate an overall
performance, in spite of the antagonistic link between strategic planning and the number
of NPD projects. Expressed ad hypothesis:

The more the company combines strategic planning and innovation (e.g.” when the
organization supports innovative ideas and use at the same time a flexible strategic
planning process), the more it achieves overall performance (e.g.” the firm gains more
competitive advantage and higher profits”).

According to Di Benedetto et al. (2008, p. 420), firms and strategic business units rely
on innovation as a driver of growth. Recent studies of new product managers founnd
that, on average, nearly 30% of sales and profits are obtained from products that are
less than five years old; the best product innovating firms derive almost half of their sales
and profits from new products. Many managers recognize the particular importance of
“radical innovation” to long-term growth. Radical innovations are usually defined as
innovations that use new technologies and/or create new markets, Radical innovations
are promising: they may allow a company to outcompete competitors and to enter new
markets The backside is that the level of uncertainty is substantial: markets or
applications for a new, radical technologies are unknown, the technological feasibility is
usually a major problem and forecasting sales is nothing more than a reasonable guess
(Sen & Ghandforoush , 2011, p. 36). The technologies employed in radical innovations
are different enough from existing practice so as to obsolete existing technology. These
innovations therefore can displace or obsolete current products, creating entirely new
product categories. As a result, firms that excel in radical innovation consistently
outperform competitors.

2.6 Design thinking towards a better strategy

While old strategy aims to develop and carry out processes that are based on analysis
(that can be outsourced to managers), linearity, problem-oriented and backward-looking
by applying analytical and qualitative approaches, executives that are qualified to be
designers focus on a strategy that foster originality and innovation, that is solutions-
focused, and is looking forward (Diderich, 2019, p. 6). Designers work on converting the
current circumstances and opportunities into better ones, that facilitate the achievement
of future desired outcomes. They utilize the problem-solving approach from the end
consumer perspective and demand innovative solutions by evolving a better
understanding and a deep dive in studying their unsatisfied needs. Designers develop a

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culture among the team based on interactions-structure through greater inclusion,

empathy and alignment of personal objectives with common results. They place real
human resources at the front, rather than putting statistics. They focus on approaches
based on quality, empathy and also on exploration of the unknown. They also involve
different stakeholders in co-creation, it makes their approach a good alternative to the
development of strategies. Expressed as hypothesis:

The more the manager uses design thinking (e.g. “converting the current circumstances
and opportunities”), the more the organization achieve the desired results (e.g.” when
the organization succeed in responding to consumers’ need”).

According to Diderich (2019, p. 6), the conceptual structure of design thinking formalizes
the development of the strategy with a strategic design process that answers to four key
questions: What are the consumer’s wants, desires, and unserved customer’s needs?
How can these needs be identified, and how can they be addressed to satisfy the
customers and be demanded in the market? What are the necessary resources and skills
for the achievement of sustainable competitiveness of the delivered products and
services to fulfill the market’s needs? How is the strategy guaranteeing that sustainable
revenues can be produced?

Design thinking is a notion that is commonly recognized and used in managers’ daily
practices in diverse fields. Still, the concept of design thinking doesn’t have a precise
definition. It is an expression that still widely undeveloped and poorly assimilated (Leifer
et al., 2011, p. 45). However, the few explanations exiting are insisting on two key
characteristics of this concept; development of new product and service that aim to fulfill
customers’ needs and wants, and enhancement of human resources’ capacities which
through adopting a process founded on disciplines’ cooperation. Dunne and Martin
(2006, p. 517) insisted more on what lays behind design thinking process and how
designers think more than looking for a proper definition for this concept. They focused
more on the intellectual and mental methods used to design things, services or systems.
They added that “design thinking actually results from the nature of design work: a
project-based workflow around "wicked" problems".

Current researches propose as definitions for the term of design thinking, a human-
centered innovation approach that integrates elements from human, technology and
business into the formulation, design and resolution of problems. It refers to a process
in which new goods, services and systems are developed through multidisciplinary
cooperation of design, engineering, business and social sciences. Design thinking
encourages a collaborative atmosphere which focuses on learning by fast conceptual

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prototyping (Leifer et al., 2011, p. xiv). Practitioners also proposed to consider design
thinking as a methodology for innovation that systematically integrates human, business,
and technical factors in problem-forming, problem- solving, and design (Leifer et al.,
2011, p. 52). It refers to a human-centered ensemble of methods and tools that integrate
approaches found in design and ethnography with technology and business capabilities.
The importance of creativity, individual needs, and social factors, learning and the
esthetics of final results products were also highlighted in another potential description
of design thinking.

Design thinking is both a method and a mindset for resolving issues and creating added
value for the organization. Ensuring technological feasibility and practical cooperation
between disciplines is the way to provide better and more desirable solutions that can
lead to the realization of higher benefits and better outcomes. Design thinking can be
also seen as a tool to encourage creativity and innovation in businesses, organizations
and the society as a whole. Design thinking brings together the knowledge of different
disciplines, technological potential and creativity to turn it into solutions centered on
people. These solutions create value for users as well as enhance economic benefits for
businesses (Brown & Wyatt, 2010, p. 32). In other words:

The more the organization focuses on design thinking (e.g.” when the manager combine
together the knowledge of different disciplines, technological potential and innovation to
turn it into solutions centered on satisfying people’s needs”), the more it creates added
value (e.g.” the firm generation high profits and better results”).

Design thinking is not a denunciation of the strategic planning process that reposes on
analytical thinking. It actually encourages analytical thinking while including the act of
synthesis to have an improved understanding of problems and issues. Synthesis is an
innovative and creative act. It needs not only analyzed data but also synthesized into a
convincing description. By combining analysis and synthesis, design thinking consists of
convergent (unique answer) and divergent (multiple choices) methods together of finding
at a solution (Williams-Pulfer, 2013, p. 84).

Brown & Wyatt (2010, p. 66) qualified design thinking as “a dance among mental states”.
According to him, design thinking takes the planning process, which usually looks for
consistent facts, data and results and incorporates the intuitive, the likely, the uncertain
or the unknown. The concept of design thinking, once used, certainly takes a longer time
to execute than the strategic theoretical planning process. The process of gathering
interviews, notes, and other crucial pieces of evidence and analyzing and synthesizing
the material is consumes a lot of time and effort. While providing efficiency, reliability and

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time savings, analytical thinking does not provide enough for real insight, observation
and empathy (Williams-Pulfer, 2013, p. 84). The process of design thinking accounts for
both what is unsaid and what is stated explicitly. Design thinking fasteners imagination
in understanding growth processes.

2.7 Economic growth for organizations

2.7.1 General concepts of economic growth

According to Haller (2012, p. 66), concepts regarding economic growth and development
have occupied a huge interest of scholars and researches for centuries, however, still
there is not a universally recognized meaning for this term. Economic development is
conceived as a process that produces economic and societal, quantifiable and, mostly,
qualitative changes (changing the economic structure of the country, the emergence of
new sectors and industries, creation of new jobs and employment opportunities, etc...)
they lead to a better and more complete satisfaction of all human needs.. Economic
growth in the simplest sense refers to a rise in gross production within an economy. It
also mentions aggregate increases in outputs, often but not always associate with
improved average marginal productivity that leads to higher wages, encouraging
customers to open their wallets and purchase more, which means higher quality of life
or living standards. Economic growth is generally modelled in economics as a function
of physical capital, human resources, labor force, and technology. To put it simply, the
quantity or efficiency of the working-age population, the resources they have to work
with, and the recipes they have at their disposal to combine labor, capital, and raw
materials, would result in increased economic production. Economic growth can be
defined as a continuously raise in the volume of production within an economy for a
period of one year (Ivic, 2015, p. 55).

There are several ways to bring about economic prosperity. The first is an improvement
in the economic value of the actual capital goods. The addition of capital to the economy
helps to increase the labor productivity. New, improved, and more resources mean
workers can generate more production per a period of time. For a simple example, a net-
fisherman would catch more fish per hour than a pointy-stick fisherman. However, two
issues are crucial to the cycle. In order to free up the money to build the new capital,
everybody in the economy must first participate in some kind of saving (sacrificing their
current consumption). The second challenge is related to choosing the right kind of new

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capital, the right position, as well as the right time for the workforce to produce it efficiently
(Rodrik ,2013, p. 21).

The technical development is a second way of generating economic growth. An example

of this is the invention of gasoline fuel; the economic value of petroleum was
comparatively lower before the discovery of the energy-generating capacity of gasoline.
The use of gasoline was a safer and more effective method of in-process transportation
of goods and more efficient delivery of final products. New technology allows workers to
generate more production from the same stock of capital products, by integrating them
in different, more competitive ways. Unlike capital growth, the pace of technological
growth is highly dependent on the pace of savings and investment, as savings and
investment are required to engage in R&D. Technological development is a way that not
only allow an increase of the productivity and prosperity of countries’ economies but it
also enables managers and companies’ holders to do things that they have not done so
far (Caliskan, 2015, p.652).

Another means of producing economic growth is by growing the labor force. Equal to
anything else, more jobs are producing more economic goods and services. A portion of
US rapid economic growth during the 19th century was attributed to a strong influx of
cheap, productive immigrant labor. However, there are some main conditions for this
process, including capital-driven production. Increasing the working population often
inevitably raises the amount of production that needs to be produced in order to pay for
the new workers' basic survival, so the new employees need to be at least productive
enough to compensate for this and not net consumers. Like capital additions, it is also
important for the right type of workers to flow in the right places to the right jobs in
combination with the right types of supplementary capital goods in order to realize their
productive potential (Edmiston, 2007, p.82).

The latter approach is human capital increase. It ensures that workers are more
professional in their jobs, increasing their productivity by teaching skills, trial and error,
or simply by doing more (Haller, 2012, p. 67). The most reliable and easily managed
approaches are savings, expenditure and specialization. Within this sense, human
capital may also apply to social and institutional capital; behavioral trends towards higher
social trust and reciprocity, and political or economic developments such as enhanced
protections for property rights are in fact forms of human capital that can enhance
economic efficiency.

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2.7.2 Measuring economic growth

Economists and statisticians use different methods of measuring economic growth.
Some of the national income indices used are the Index of Sustainable Economic
Welfare, the Genuine Progress Indicator or Sustainable National Income, have been
established to provide a complete picture of the level of well-being and the situation, with
respect to natural depletion, but there is no agreement as to which, if any, is a better
measure. GDP still remains by far the most often-used measure. One reason may be
that a rise in real GDP is correlated with an increase in the availability of jobs, which are
necessary to most individuals' survival. A key question in this debate is whether care for
the environment and quality of life costs jobs or actually requires more jobs. Rightly or
wrongly, GDP has become the standard tool by which the economic grown within a
country is measured (Leamer, 2009, p. 19).

The gross domestic product (GDP) is the best known and most commonly recorded.
Nevertheless, over time, some analysts have pointed out shortcomings and prejudices
in the measurement of GDP. Some suggest calculating economic growth by rising living
standards, but this can be difficult to measure. The gross domestic product is the logical
extension of monetary expenditure calculating economic growth. For example, if a
statistician wants to understand the steel industry's productive production, he just needs
to monitor the dollar value of all the steel that entered the market over a given time.
However, the GDP indicator is not always trustful to measure economic growth, and this
is due to including defensive investment to reduce the negative impact of economic
development on the environment, such as emissions. It is also because the following are
missing: measuring unmarked efficiency such as housework or DIY, goods on markets
which are not observed by statistics agencies; externality impacts on global warming
from exported commodities (for example the impact of fuel consumption) (Leamer, 2009,
p. 19).

According to Dynan & Sheiner (2018, p. 4), the definition given by The Bureau of
Economic Analysis (BEA) of the gross domestic product (GDP) is: “the value of the goods
and services produced by the nation’s economy less the value of the goods and services
used up in production. GDP is also equal to the sum of personal consumption
expenditures, gross private domestic investment, net exports of goods and services, and
government consumption expenditures and gross investment”. According to Dyan &
Sheiner (2018, p. 2), the reasons behind the efficiency of the GDP indictor is related first
to the mis measure that could arise from measuring the national accounts of the digital
economy and the activity of multinationals organizations. The second cause is related to

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the probability of getting biased measures of inflation caused by deflators used to

separate GDP into nominal GDP and real GDP.

2.7.3 Economic growth and small businesses

Small and medium businesses have a crucial role in economic growth. They deliver
many benefits and advantages to a specific economy in terms of growth. SMEs partici-
pate in enhancing and increasing the national output, and hence, contribute to the de-
velopment of the economy of the whole society, through investing and generation im-
portant profits. The role of SMEs is critical for every economy’s recovery. They provide
a wider employment capacity and an increase of added value that constitute a huge
share of the country’s economy (Stan, 2014, p. 165).

The economic activity exercised by small companies is becoming progressively

significant for attaining economic growth. In the current context of the rebellion of
knowledge, of the transition from the economy dominated by the physical, concrete
resources to the economy dominated by knowledge, the SME is considered to be the
new key microeconomic pawn. However, the term SME doesn’t have a common
definition. According to Stan (2014, p. 165), small and medium enterprises refers to
companies that are non-subsidiary, autonomous and self-governing which have only a
small number of collaborators. A start-up firm is also an institution that is at the early
stages of its operations. Startup businesses designates newly born enterprises that fight
for life. Many of these institutions are built on the basis of brilliant ideas and evolve to
succeed. This is how this concept is described in the theories of management,
organization, and entrepreneurship literature.

Small businesses’ managers are facing the issue of globalization of information

generated by economy globalization. To ensure survival in the highly unstable economic
environment, executives must adopt efficient strategies that deal with this issue quickly.
SME’s are more susceptible to changing business conditions than bigger entities that
use all their information resources efficiently. Risks and challenges facing start-ups are
higher than more stable firms make most of start-up companies in the need of looking
for a new and repeatable business model (Tutunea & Rus, 2012, p. 865).

The interest of scholars and researchers in understanding small-business growth

strategies is getting more intensive than ever before. Small companies became key
contributors to economic growth and the best innovation and creativity incubators. From
a point of view of Karel et al. (2013, p. 58), although bigger businesses deploy huge
budget for setting strategic management and gives the responsibility to an entire division

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of experts and experienced managers, contrary to small firms where most of the time the
owner is the one responsible for making strategic decisions, the size of the company
does not necessarily diminish the level of importance and relevance of the strategic
management process. Strategic management is, however, very important for all
companies that want to succeed, but it is more essential for the start-up companies. One
of the key ends of start-up companies is developing the ability to grow. For a start-up
company there are lots of strategies which could be used to grow and to be successful.
The aspect that significantly affects the survival of a new business is to decide the most
important strategy. A new company's tactics are distinct from those of other bigger
companies. Strategies for a start-up business concentrate on growing market share while
the other businesses have strategies that concentrate on raising revenues. Expressed
as hypothesis:

The smaller is company (e.g.” a small firm has many characteristics such as: few
number of employees, newly created businesses, etc..”), the more it requires strategic
planning (e.g.” small businesses strategies should converge the same goal which is to
ensure the survival of the firm and growing market shares”).

The word "start-up" contains the idea of starting-up and the idea of strong growth "up".
Two ideas that are the essence of the startup. A startup is therefore a business, but it is
more than just an entity. A startup is a state of mind, a vision, carried by its founder and
which acts in an unstable market with creativity.

2.7.4 Growth of small businesses

The survival of small businesses depends on their capability to grow and become able
to compete with bigger companies. Growing enables small businesses to keep existing
in the market in which they are operating (Machado, 2016, p. 419). Many models treating
the issue of small companies’ growth consider that the firm’s development process stops
in the maturity stage and focus on the generic problems that organizations encounter
during growth.

Small businesses are assumed to grow following distinct development stages, each
stage concluded by a set of typical problems and organizational responses, and thus,
the entrepreneur's ability to make structural and strategic changes that can decide
business growth prospects. Failure to address each stage's main strategic "problem"
would impede the organization's growth. There are several models in the development
literature of small businesses that were intended to demonstrate progressive
development and growth but, while these models are useful in simplifying the uncertainty

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associated with growth, they are insufficient for many reasons. An organization needs to
go through all stages of growth or die in the attempt. Many organizations are also failing
to require alternate growth paths (e.g., skipping stages or progressing through stages in
a different order from the model). Numerous are the models that struggle to capture the
critical stages in the early development and growth of the company in detail. Through
"birth" to "development" they move quite simplistically, providing little understanding as
to why the characteristics of a particular stage emerge. At best, it means the
determinants of a company's role in a specific growth period, and the factors that cause
it to move from that stage to another. Also, the role of business, technology, and other
situational variables is not taken into account in most models. Their supporters believe
that they should be extended to all organizations regardless of their context. Finally,
many of the models describe revenue growth (although some discuss number of
employees) and neglect to recognize value added, product line sophistication,
manufacturing technology or the number of locations. (Wiklund & Shepherd, 2001, p.
1920).

Managers 'ability to resolve growth hurdles facing small businesses will decide the firm's
growth potential. Obstacles can include lack of financial resources; market factors such
as demand rates and intensity of competition in the market; labor and labor law costs;
internal factors such as the entrepreneur's managerial skills, temperament and
managerial skills. In order to grow, a small company requires both investment and the
desire to grow. Investments decisions and outcomes in small businesses are depending
on the firm’s growth strategy, and therefore, on the managers’ expertise and capabilities
(Leminen & Westerlun, 2012, p. 9).

Figure 6 show the 5 different stages of a business growth:

Existence:

At this first phase, the businesses concentrate primarily on attracting new customers and
providing on-time contract-based service or goods. The key aim of the company is to
survive. If the companies will not get enough consumers or product power, so at this
point the businesses will have to quit and the owners will leave the company due to the
business's inability to survive (Churchill & Lewis, 1983, p. 3).

Survival:
That is an enterprise's second phase of growth. The companies had buyers satisfied
enough. However, the creation of structures and systematic planning is limited, because
the main objective of the company is still only survival. From here, the company can

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expand in productivity and scale and push into the next level, or simply sustain its level
of survival. The company, however, faces significant challenges such as cash generation
to cover capital asset replacement and cash flow production to remain in business or
expand to a larger size (Churchill & Lewis, 1983, p. 4).

Success:
At this third point, the business owner must determine whether to extend the business of
the company or just preserve its stability or profitability. At this point there are two
possibilities for company performance. First, it is called "Success Disengagement Sub-
stage" in which the company can achieve economic performance by expanding its size
and product market and earn average or above average profits. The second probability
of any profitable company is referred to as "Success-Growth Sub-level;" the key concern
at this point is to maintain the business at a high profitability. Managers are hired by
concentrating on the future of the business rather than the current condition (Churchill &
Lewis, 1983, p. 4).

Take Off:
The key issues contribute to the company's rapid growth and financing. The major
questions are about delegation and cash. For example, it must be determined whether
the owner should delegate liability to others in order to boost a rapidly increasing
company's managerial effectiveness, and whether there will be sufficient cash available
to meet the demands for growth. The main managers therefore need to be very
experienced in managing the company's growth level. The business is largely dominated
by the involvement of the director. It's a critical moment in the life of the company. If the
company overcomes the financial and administrative difficulties effectively, then it can
become a major business; then it can be sold out for profit if the owners understand their
limits. This is because at stage four, most companies are ineffective when the owners
seek to expand the company quickly and run out of cash. When the company is unable
to expand then either it will fall down to stage three, or the stage of survival or even
collapse. For stage four, the entrepreneur's strategic competency is required to face the
challenges (Churchill & Lewis, 1983, p. 7).

Resource Maturity:
The firm is concerned with consolidating and managing financial gains as well as
retaining the advantages of being small at this point. To facilitate the accelerated growth
of the company, the company will recruit more management staff. In addition to this,
through this stage, the organization needs to make good use of its personnel and

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financial capital for operational and strategic planning. The management is well
established and decentralized at this level, all processes are well defined, but the owner
and the company are divided financially and operationally. The company has advantages
in terms of complexity, management expertise and financial capital. More specifically,
individual SMEs need to build creative approaches after this point in order to continue
as market leaders (Churchill & Lewis, 1983, p. 9).

2.8 Linkage between strategic planning and economic growth

It can seem that it is enough to make profit which is the obvious aim of any commercial
enterprise. Nonetheless, a survey conducted on a number of America's Chief Executive
Officers (CEOs) found that they did not position "solid and consistent benefit" as their top
priority, in fact placed fifth (Hitt et. al 2008, p. 261). Instead, they considered a good and
well-thought-out plan as the most important factor in making a firm future promising.

While Nestle’s CEO stated: “Our first priority is to achieve real internal growth. Internal
growth reflects the company’s performance and competitiveness better, even more so
than acquiring another company’s turnover” (Hitt et. al 2008, p. 261). Former IBM
chairman Thomas J Watson Jr. is quoted as having once cautioned people to note that
"corporations are expendable, and that success at best is an impermanent
accomplishment that can still slip out of hand" (Hitt et al. 2008, p. 309).

Levi Strauss, for example, a once-successful business with a global reputation and
strong financial results, suffered losses in the 1990s and began its first lay-offs in 1997
as a result of errors and inadequate strategy. It was used by its closest competitors, Gap
and Tommy Hilfiger. Xerox, a brand associated with photocopying, even lost to its rivals
in the 1970s and 80s due to lack of attention and foresight (Business Week, 2001).

Achieving appropriate financial results is critical because it jeopardizes the achievement

of strategic vision, long-term health and eventual survival of an organization without
sufficient productivity and financial power. Shareholders, potential investors and
borrowers would hesitate to make further advances. It is equally important to remember,
however, that good financial performance alone is not enough in itself. Therefore,
Thompson et al. (2004, p. 45) propose two very distinct performance standards; one
related to financial performance, and the other related to strategic performance. The
former looks at performance metrics such as sales revenue and productivity while the
latter involves production growth, technological advancement, quality, shareholder
added value, economic added value, and human resource resources, etc.

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The success of the company in terms of its strategic well-being, profitability and market
position is critical and unless its market-place success reflects enhancement of
competitive strength and market penetration, its progress is not encouraging and its
ability to continue to produce good financial results is in doubt. Financial performance
measures taken by a company are "lagging indicators" representing the effect of
previous actions and operational activities. The "leading measures" are projections of
potential financial success to maintain sustainability and market dominance (Thompson
et al, 2004, p. 50).

2.9 The impact of strategic planning on organizational

performance
Strategic planning is a strategic feature that focuses on an organization's development
and sustainable future well-being. The interest in strategy arose from the awareness that
an organization needed a well-defined framework and path of development, not just the
extrapolation of past results used to project into the future. According to Hunitie (2018,
p. 324), many definitions were associated to the term of strategic planning. This
managerial tool had a crucial role in the development of organization. Is represents the
first phase of the process of strategic management, but also establish a foundation for
the upcoming phases. The success in defining an effective strategic planning process
determines the future of the company. Strategic planning plays a very important role in
reaching the organizational goals and objectives, and therefore on the overall
organizational performance.

Rapid changes and/or developments in technology, globalization and market competition

have forced organizations to approach this management role from a more purposeful
strategic perspective since the 1950's, and especially the early. Environments are
becoming highly uncertain and changing very fast. As Poister (2010, p. 253) states,
organizations cannot achieve their desired objectives through just predicting and having
expectations from the future. Managers should plan for all imaginable contingencies and
a good many unlikely ones. They need to provide a workable strategy for everything that
can come up. This demonstrated the need for strategic planning in-organization;
diversified or one business entity, large or small. Expressed as hypothesis:

The more the organization plans (e.g.” when the firm adopt a flexible, adaptable and
effective strategic planning process”), the more it realizes satisfying results (e.g.” the
firm gains competitive advantage and realizes financial performance”).

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The issue of how companies that practice strategic planning do better in terms of their
success (financial and non-financial) challenged many management colleges, writers,
consultants and scientists to study and evaluate the effect of strategic planning on the
success of the organizations. However, the focus regarding the relationship of the
strategic planning process and the results of companies was more on the quantitative
(financial) aspects.

2.9.1 Impact of strategic planning on the financial performance

Strategic management is one of the main success factors of any business. The degree
of implication of managers and executives in formulating and implementing the strategy
results in how successful and performant is the organization. Khostaria (2018, p. 84)
affirms that when companies take clear strategic decisions, they are more likely to
achieve the desired outcomes. Through executing plans step by step, the organization
reach the goals and the objectives they aimed to achieve. Strategic planning is
considered to be a key managerial tool that, no strategy can be formulated without it.
The definition of the term strategic planning has occupied many scholars. For example,
Bryson (2018, p. 317) explains the concept of strategic planning as a deliberative and
disciplined effort that aims to produce essential decisions and actions in order to form
and direct an organization. Strategic planning most of the tome represents a part of wider
practice of strategic management that associates planning with the execution of the
strategy, on a current situation basis.

Bryson (2018, p. 327) adds another definition for the term of strategic planning where he
describes it as a set of rational-comprehensive methods of that uses an organized
process with specific stages including: the examination of external and internal
environments, setting goals and objectives, analysis, assessment and action
planification to guarantee long term performance and efficiency of the organization.
Moreover, Bryson critics the formal process of strategic planning that reposes on an
inflexible procedure. When a strategic planning is too formalized, rigid, inflexible and
highly analytic, the positive impact on the financial performance is no longer here. This
type of strategic planning hampers the financial performance. Therefore, organizations
that want to enhance their productivity and increase their incomes, must adopt less
unbending and more adaptive. Expressed as hypothesis:

The more the organization adopt a flexible strategic plan (e.g.” the strategic plan should
be adaptive depending on the current situation of the organization”), the better are its

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financial results (e.g.” when the firm realize greater profits and good performance in
terms of money”).

According to Boyd (2007, p. 353), although researchers and scholars tried for many
years to study the connection between strategic planning and financial performance of
an organization, the nature of relationship is still unprecise. Some studies affirm the
positive impact of this managerial tool, and who it can enhance not only the financial but
the overall performance of an organization. Strategic planning can have significant
benefits for firms, but also negative impacts when it is not used in the right way.

Kabeyi (2019, p. 27) defines a strategic plan as a managerial tool that reposes on
defining the direction of the organization, and therefore fixes realistic and possible
objectives. He claims that in order to have an effective strategic plan, the organization is
obliged to follow many steps, first of all there should be an internal and external
assessments of the environment. Through SWOT analysis, the company will be able to
shape on its strengths and exploit the prevailing opportunities while controlling and
managing the threats and weaknesses that could affect its performance negatively.
Kabeyi (2019, p.27) stressed also the need for a well-designed, innovative and original
plan that is well executed will ensure success. According to Taoiseach & Kenny (2020,
p. 7), innovation has always been one of the fundamental reasons behind the
enhancement of productivity as well as fostering competitiveness of organizations. When
innovation is combined with a well formulated strategic planning process, business could
achieve incredible results which are reflected in high revues. Stated in other ways: a
good strategic plan must be founded on creative and innovative ideas.

Therefore, the following hypothesis can be formulated:

The less the organization founds innovative plans (e.g.” when the organization uses only
formal planning, that don’t contain the creative and innovative touch of the firm”), the
less financially performant it becomes (e.g. “the company doesn’t realize the desired
results in terms of money”).

2.9.2 Impact of strategic planning on competitive advantage

Strategic planning and strategic management are considered to be the roadmap that
organizations and businesses follow to be able to be prepared to face and deal external
issues, overcome competition in marketplaces and realize sustainability. Adopting an
effective strategic planning is crucial for all types of organizations; business operating in
the private sector, public sector and also nonprofit institutions. It is necessary to facilitate
the accomplishment of goals and successful results. According to Kabeyi (2019, p. 27),

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strategic planning is a set of actions and procedures that starts with self-assessment
(identification of internal and external environmental factors), formulation and
executions, and then reorganization and adaptation to the business environment’s
fluctuations to remain competitive.

Development of business strategies constitute a solid foundation for organizations that

allow them to survive and deal with all the issues in an increasingly high-competitive
environment. Therefore, business should give more attention and consecrate more
efforts to well-design their strategy, delegate the right persons for this vital task and the
implant it in right organizational levels. When strategic planning formulation and
implementation are not associated with an evaluation of the strategy, the organizational
strategy remains hopeless and useless paperwork. Through strategies, businesses aim
to realize success, however, they still facing numerous issues such as: political and legal
barriers, restricted resources and also overall economic situations that can not be
controlled by managers. Therefore, in order to prevent from failure, organizations’
strategic planning process should scan its internal and external environment and adjust
its strategy depending on the examination’s results, and this can be effective only if the
company evaluates its strategy implementation process. A good strategic plan will allow
the organization to realize significant benefits and satisfying results such as an increase
in profitability, a better corporate governance, and also competitiveness in the market
(Kabeyi, 2019, p. 27). The below assumptions generate two relevant hypotheses than
can expressed as following:

The more the organization plans strategically (e.g.” when the organization applicates all
the steps to set an effective strategic plan”), the more competitive it becomes (e.g.” when
the firm gains competitive advantage”).

The more the organization adjusts its strategic planning to the environment (e.g.” after
the evaluation and examination process, managers should make the strategy flexible
and adaptable to environmental factors”), the more it gains competitiveness (e.g.” when
the firm becomes better than its competitors”).

Song et al. (2011, p. 508) claim that through aligning strategic planning with
suitable physical, financial, and human resources will allow the organization to formulate
a value-creating policy that rises the competitiveness and gives advantages that cannot
be concurrently realized or adopted by its rivals. In order to deal with intense competition,
businesses must be customer-oriented, this will enable managers to formulate and
implement effective strategies. Nevertheless, according to Song et al. (2011, p. 509),
although strategic planning enhances the decision-making process and make it more

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rational by involving more the collaborates in the process, it still doesn’t always ensure
firm performance and successful results. In addition to implementing a strategic planning
process, firms should develop more new products projects and encourage creativity and
innovation within the organization. Strategic planning process is as important for the for
organization since it anticipates and sets logical sequences of actions to face
environmental turbulence, as innovation. To achieve competitiveness, it is crucial to
adopt a flexible strategic planning that will enhance also the innovation and will give more
benefits for the business.

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3 Empirical study
This chapter is dedicated to the explanation of the research methodology used in this
investigation.

3.1 Research Setting

This study employed a constructivist approach to investigate on the impact of strategic
planning on the performance of the organization. The study case of one Egyptian start-
up has been chosen.

Egypt has known a very active period the past few years that influenced its economy.
After the Arabic spring, strategic planning has become very crucial for companies, in
order to compete and perform in a very complex ecosystem. According to a Magnitt
survey, barely a week passes without a startup reporting an investment round in Egypt.
In last decade, the country has ramped up its entrepreneurial operation, to become the
fastest growing ecosystem in the Middle East and North Africa (MENA) region. Helped
by the dropping rate of inflation and an economy on its way to recovery, more people
gain the courage to start their own businesses from their innovative idea.

With a population of over 100 million, the market in Egypt has the potential to be one of
the most lucrative and draws the attention not only of entrepreneurs from the broader
region but also of investors.

Mohamed Hamza, associate director at AUC Venture Lab affirms that: "Over the last
three years we have been seeing more entree to finance and more interest from global
investors to invest in the ecosystem, adding to that the governmental initiatives
supporting startups and SMEs”. He adds: “We have been seeing an augmented
awareness about entrepreneurship through the work of various stakeholders, appearing
on TV and having devoted programs pointing attention to the topic as well as the
overview of entrepreneurship instruction as a prerequisite in many public universities.”

The number of Egyptian venture capital (VC) companies, accelerators, and incubators
has increased, reflecting an increasing interest in Egypt's entrepreneurship. In reality,
according to one study from the Global Entrepreneurship Monitor (GEM), launched in
2018 by The American University in Cairo School of Business, 82 per cent of Egyptians
perceive productive entrepreneurs as having a high social status and almost 76 per cent
of Egyptians, mainly youth, perceive entrepreneurship as a good career choice,
compared to a global average of 61.6 per cent. In addition, 55.5 percent of surveyed

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non-entrepreneurs reported interest in starting their own company, a figure that is double
the global average.

"There is a change in mindset. Young people are more willing to start their own ventures
now. Also, there are so many organizations that offer assistance and resources for
entrepreneurs. The younger people learn about these agencies and the fact that there is
so much resources, the more they are motivated to start their own ventures," says Marie-
Therese Fam, managing partner of Flat6Labs Egypt's accelerator.

However, the lack of "interesting work for young people" can be seen as a key reason
for the increase in entrepreneurship, adds Fam. Although the total unemployment rate is
about 8 per cent according to CAMPAS, Egypt's statistics agency, according to the World
Bank, the rate of youth unemployment as of 2018 was over 32 per cent.

3.2 Methodological Framework

Three types of studies can be used for case studies: exploratory, descriptive, and
explanatory (Yin 2014, p. 274). This study employs at least the descriptive dimension of
the case studies, drawing a clearer picture of the strategic planning process. This also
helps to clarify how an efficient strategic plan affects startup growth. This is a highly
context sensitive area of research, looking at a current phenomenon in its actual
environment, which also warrants for the case study approach.

A qualitative research approach for this study was chosen because qualitative methods
are especially useful in discovering the meaning that people give to events that they
experience (Flick, 2009, p. 15). Specifically, the phenomenological method was used to
understand how participants make meaning of the phenomenon being studied; i.e., the
impacts of strategic planning on the performance of organizations.

This research started with the creation of a theoretical framework on which to develop
the basic themes for the interviews. But as the research progresses, the theoretical
structure is established. The research method can thus be defined as abductive,
combining both theory and data-driven research (Gioia et al., 2012, p. 21).

3.3 Data collection

Since the world environment is changing continuously, the role of strategic planning has
evolved in companies. Thus, many new criteria have been neglected by the literature
study, and in this investigation, the study’s objective is to determine the impacts of the

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strategic planning on the performance, and also to explore new considerations that
influence the performance of start-ups, more precisely: The Egyptian start-ups.

This thesis is conducted as a case study that looks at the strategic planning process in
which the case of the Egyptian start-up Taqatak is involved. The data for this analysis
was gathered through only one interview with the CEO of this start-up. Research is
carried out using an abductive investigation approach inside case research.

The primary data of this study consists of qualitative data that was gathered in one
interview with the owner of one start-up in Egypt, after filling-in a questionnaire sent via
E-mail before conducting a skype interview with him. The secondary data includes
articles and Internet sources, such as webpages, and previous thesis.

The interview was constructed as a semi-structured interview, which allowed for focusing
on certain area of data collection but did not limit or predetermine the end results of the
interview. The interview was a video call on skype and lasted between 45 and 60
minutes. The interview was conducted in English.

Previous researches about the impact of strategic planning on the

performance of start-ups

Planning may help the firm to maintain its current size and position or provide an overall
growth enhancement. Bryson et al. (2018, p. 317) define strategic planning as a
calculated, well-designed and well-organized effort that aims to produce fundamental
decisions and actions that form and guide what an organization is, what it does, why and
how it does it. Bryson et al. add that strategic planning can be and often constitute a part
of the wider practice of strategic management that associates planning with
implementation of the strategy on the current situation basis. Strategic planning is
necessary to maximize potential opportunities and avoid threats. Strategic planning is
defined here as an environmental awareness mechanism. It is also seen as the presence
of the concept or formal documentation of a potential strategic course of action and
understanding of these short- and long-term implications.

Tapinos et al. (2005, p. 379) also noted that strategic planning consists of preparation of
processes for the implementation of plans that could lead to goals and objectives
achievement. One way it can do that is to produce appropriate knowledge to make
environmental conditions better understood and reduce uncertainty. Environmental
consciousness is a business management principle by which businesses collect
knowledge from the environment in order to gain a more sustainable competitive
advantage. Furthermore, the organization needs to respond to information gathered from

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environmental scanning by adjusting its strategies and plans as required. Tapinos et al.
(2005, p. 373) emphasize that strategic planning process implies not only consideration
of the immediate consequences but also reflection on the long-term impacts. Therefore,
strategic understanding implies the capacity to assess the overall consequences of any
transition.

Strategic planning to is a competitive advantage itself. Strategic planning and strategic

management are considered to be the roadmap that organizations and businesses follow
to be able to be prepared to face and deal external issues, overcome competition in
marketplaces and realize sustainability. Adopting an effective strategic planning is crucial
for all types of organizations; business operating in the private sector, public sector and
also nonprofit institutions. It is necessary to facilitate the accomplishment of goals and
successful results (Kabeyi, 2019, p. 27).

Strategic planning is a senior management practice or method that includes deciding

where, over the next year or more, a company is going (the direction), that means,
measures and actions it needs to take to get there, and what it is intended to accomplish.
This operation involves conducting some examination of the general environment
(political, economic, social-cultural, technical, legal and green environment-PESTLE
Analysis), the industry (industry competition, suppliers, customers, danger of near
substitutes and facilitation of new entrants; Porters 5-Forces model) and self-
assessment to see what the strengths and weaknesses of the company are and how to
use their strengths to maximize the resources available while defending themselves or
strengthening their areas of weakness. Strategic planning is a process that enable an
organization to determine its key priorities and objectives for the long term and set
actions that the organization should undertake in short-term starting from today. Strategic
planning is therefore about adjusting the strategy to the environment in order to achieve
a sustainable and sustained performance and high profits (Paschal et al., 2016, p. 14).

While formulating a coherent plan is a challenging job for any management team, making
it much more challenging to do the plan work is executing it in the company. Khashei
and Ashofteh (2016, p. 2617) state that in more complex environments, strategic
management struggles to, in one hand adapt the creativity and the innovation with the
limit of chaos, and on the other hand maintain the smoothness of the execution of the
strategic plans. Managers therefore should focus on creating a flexible strategy that
allows creativity of managers, provides a domestic atmosphere that is based on mutual
cooperation between managers and senior executives, make the decision-making

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process decentralized, and thus, to better adapt to changes before the environment
forces the organization to change accordingly.

Various scholars have described the concept of strategic planning differently. However,
the fundamental problems are the same; they concentrate on making preparations and
taking actions today for a company's future success and profitability through the best use
of available resources considering all the constraints presented by the internal and
external environment. Nickols (2016, p. 2), describes the process of strategic planning
as a set of procedures and activities that essentially aim to establish the organizational
mission and vision, develop plan of actions, perform a strategic analysis, setting strategic
direction, taking action, that is, setting out carefully how the strategic objectives are going
to be accomplished, measuring the progress and adjusting the plans if required.

David (2011, p. 6) states that the term of strategic planning emerged in the 1950s and
gained popularity in the mid-1960’s through the mid-1970’s. The use has progressed
through the 1990's and has become widely practiced in almost all companies as an
important tool in the management process due to the presence of the influence of
globalization, technical advancements and business capabilities competitiveness. He
adds that a strategic plan refers, in essence, to the game plan of an organization (e.g.
like a football club needs a good game strategy to increase chances to succeed, an
organization must also plan strategically in order to compete successfully). A strategic
plan is therefore an output of hard managerial selections among multiple good
alternatives.

Strategic planning is a structured process by which an organization formulates

achievable policy priorities for future growth and development over the long term, based
on its purpose, vision and objectives, and on a practical evaluation of the human and
material resources at its disposal. Walker et al. (2011, p. 3) considers strategic planning
as a sequence of actions with the aim of setting long-term organizational objectives,
developing and executing strategic plans to attain the desired ends through the optimal
distribution of disponible resources and allocating of the necessary resources for
realizing these goals. Strategic planning is about encompassing all those actions that
lead to goals and objectives being identified and methods chosen to achieve them.

It must be said that, there is a connection between the above-mentioned detailed

contributions and Bryson’s assumptions (2009, p. 176) who notes that strategic planning
refers to a focused effort to produce fundamental decisions and acts that form and direct
what an organization is, what it does and why it does that. The process of setting a
strategic plan describes the priorities and objectives and strategies for achieving them in

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the medium and long term. It's a glimpse into the future that defines an organization's
mission, vision, priorities and objectives with defined steps required to attain the vision.

The value of strategic planning cannot be overemphasized for any organization, it is

essentially the most important management process. This is apparent from the definition
given by St-Hilaire (2011, p. 42), who considers strategic planning as a feasible
alternative, that permits an organization to guarantee the continuality of the plan that
realigns the organization’s objectives and strategies with the environmental fluctuations.
Thus, using strategic planning would allow an organization to achieve in an efficient way
the major decisions, through the identification and exploitation of the potential
opportunities. Strategic planning can also contribute in optimizing the timing and the
allocation of the resources identified to opportunities and avoid wasting valuable time
and resources in correcting mistaken or ad hoc choices. Eventually, strategic planning
makes the organization benefit from a competitive advantage over its rivals. Strategic
planning is therefore an effective tool to manage environmental turbulence and aims to
realize supposed plans to achieve that contribute in organization performance.

Strategic planning is according to Arend et al. (2015, p. 1743) a tool that organizations
use to focus activities and to enhance productivity; such as setting priorities, optimizing
the exploitation of resources and determining the sequence of tasks. The planning
process reproduces a strategically significant decision-making process for firms, that
enhances its overall performance, since it determines the organizational ends, makes
the incomes more efficient, make competitive threats and opportunities clearer, and
provide an effective control and efficient implementation of actions. Organizational
performance is also increased as the planning mains to more rationality in the decision-
making processes and an enhanced possibility of sharing effective information. Though,
strategic planning contributes in reducing the number of new-products, and subsequently
the quantity of new funded ideas. Therefore, strategic planning is considered to limit
creative flexibility that leads to innovation as well as the knowledge that fuels new ideas.

Kabeyi (2019, p. 27) defines a strategic plan as a managerial tool that reposes on
defining the direction of the organization, and therefore fixes realistic and possible
objectives. He claims that in order to have an effective strategic plan, the organization is
obliged to follow many steps, first of all there should be an internal and external
assessments of the environment. Through SWOT analysis, the company will be able to
shape on its strengths and exploit the prevailing opportunities while controlling and
managing the threats and weaknesses that could affect its performance negatively.
Kabeyi (2019, p.27) stressed also the need for a well-designed, innovative and original

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plan that is well executed will ensure success. According to Taoiseach & Kenny (2020,
p. 7), innovation has always been one of the fundamental reasons behind the
enhancement of productivity as well as fostering competitiveness of organizations. When
innovation is combined with a well formulated strategic planning process, business could
achieve incredible results which are reflected in high revues. Stated in other ways: a
good strategic plan must be founded on creative and innovative ideas.

Development of business strategies constitute a solid foundation for organizations that

allow them to survive and deal with all the issues in an increasingly high-competitive
environment. Therefore, business should give more attention and consecrate more
efforts to well-design their strategy, delegate the right persons for this vital task and the
implant it in right organizational levels. When strategic planning formulation and
implementation are not associated with an evaluation of the strategy, the organizational
strategy remains hopeless and useless paperwork. Through strategies, businesses aim
to realize success, however, they still facing numerous issues such as: political and legal
barriers, restricted resources and also overall economic situations that can not be
controlled by managers. Therefore, in order to prevent from failure, organizations’
strategic planning process should scan its internal and external environment and adjust
its strategy depending on the examination’s results, and this can be effective only if the
company evaluates its strategy implementation process. A good strategic plan will allow
the organization to realize significant benefits and satisfying results such as an increase
in profitability, a better corporate governance, and also competitiveness in the market
(Kabeyi, 2019, p. 27).

Case study of the Egyptian start-up: Taqatak

Taqatak Renewable Energy Solutions is an Egyptian Start-up, created by Mostafa

Asharf, a 25 years old electrical engineer in 2012. The company is specialized in
providing solar energy solutions to industrial and commercial consumers. The company
offers multiples smart products such as:

Solar Smartphone Charging Station: It permits people to have access to Wi-Fi & charge
up to 9 smartphones in highly secured lockers. This product leads to high traffic rate
which could be effectively used as a targeted advertisement method.

Solar Umbrella: this product provides the citizens with the possibility to rest under the
protection of an umbrella while having access to Wi-Fi and up to 2smartphones charging
by retrofitting solar panels to the umbrellas.

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Solar Garden Table: the company offers a nice place for citizens to enjoy their time with
their friends or family without worrying about the batteries of their smartphone, laptops
or portable speakers. Not only that but access to Wi-Fi & automatic night lighting is also
available.

Solar Pergola: is a Retrofitting solar panels to the pergola will allow access to Wi-Fi &
smartphones charging 24/7; the pergola lights automatically at night.

The start-up is based in Cairo and offers many other innovation solutions that are
environment-friendly and uses renewable energy. Its mission statement is to raise public
awareness about renewable energy and its potential as an alternative source by
designing locally manufactured products at a lower cost. Its vision statement is to
positively affect the region of Cairo and the whole Egypt and take a new step in the
renewable energy and marketing industries.

Taqatak has won the 1st place in TIEC accelerator and has been honored by H.E
President Abdel Fattah Elsisi for being one of the emerging startups in Egypt. The
company consists of young professionals eager to provide a clean environment by using
unconventional methods and applications of renewable energy that would benefit the
society.

Information about the interviewee

The interviewee is originally Egyptian and occupy the position of Founder and CEO of
Taqatak Renewable Energy Solutions. Graduated from Arab Academy for Science,
Technology and Maritime Transport in Alexandria in 2018, with a degree of Bachelor of
Engineering in electrical engineering.

3.4 Data Analysis

Data analysis was conducted in excel, and that allowed the classifications of the factors
seen in the previous researches, and also the data collected from the interview with
Taqatak’s CEO.

Data gathered from previous researches

Many researches have been studied, which will figure in “Main findings” chapter. The
analyze was based on defining the principal statements of each study, and evaluate
them, by checking if the same hypothesis are validated by other authors.

The case studies were classified by country, by panel of interviewers and also by the
type of the research: quantitative or qualitative. The purpose of keeping the quantitative

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researches despite the qualitative aspect of this study, because it is important to get
empirical confirmation from the two types of study, to confirm the relationship existing.
All the findings above, will be discussed in main findings.

Data gathered from the interview

For this study, the interview was conducted via a video call on skype. Skype served as
an efficient way to conduct the interview. It was the only practical tool to connect with the
participant from across Egypt. Furthermore, it enabled to reach the interviewee and meet
his busy schedule.

As a first step in the interview process, the interviewee was reminded of the purpose of
the study, research procedures, expected benefits, their right to withdraw from the study
at any time, and protection of confidentiality. The data gathered was really interesting,
and it gave the study a real based approach of the impacts of strategic planning on the
performance of start-ups.

The outcome of the analysis of the data gathered will be discussed in the next chapter.

3.5 Main findings

Previous researches discussion

Analysing the outcomes of the previous researches, gave this study a lot of insight in
describing and evaluating the impact of strategic planning on the organization’s
performance. Therefore, the main findings were:

Strategic planning and growth:

The relationship between strategic planning and growth, is really tight. Strategic planning
can help the company to put and provide the foundation, to enhance and boost
performance. The conception of a plan (long or short term), imply a strong knowledge of
the external environment, in order to gain more stability, and sustainable competitive
advantage. In other hand, many other authors, have proven that strategic planning may
have a double outcome. In fact, putting a long-term strategy in a high-risk environment,
can and will in most cases have a negative outcome for the company. Therefore,
strategic planning isn’t the only factor in determining growth, but still it is important in the
managerial point of view.

Strategic planning and competitive advantage:

Competitive advantage is a key factor for every company’s success. How can strategic
planning help the company acquire a competitive advantage? Some authors find that the
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strategic planning is a competitive advantage itself, which means, that having a

competent managerial role, and a sustainable strategy in the company, gives strength
for its outcomes, which can be considered as a competitive advantage. Thus, this theory
had more impact on small and medium companies. Therefore, comparing to large
organisations, where the hierarchy is respected, the SME have more participation in
planning the company’s future. This inclusion gives the importance to each employee,
which enhances its confidence, sense of responsibility, and the most important thing, is
to share different point of views. In conclusion, the relationship between strategic
planning and competitive advantage is conditioned by the size of the organisation.

Strategic planning and size of the company:

The size of the company is considered to be a meaningful factor in implementing

strategic planning. However, many SMEs don’t give huge importance to it. Many authors
concluded that the findings defied the common belief that due to lack of time, preparation
is less important to the founders of companies than other value-increasing business
practices. On the other hand, some authors conducted quantitative research, to study
the impact of the size of the company, on implementing strategies. The results were
surprising, knowing the lack of intention and importance for SMEs in strategic planning,
in there is a close association between strategic planning and success of the company.

Strategic planning and decision making:

Strategic planning provides overall guidance to areas such as financial strategy,

marketing strategy, organizational growth strategy and human resources strategy, to
achieve success and performance. These elements influence the decision-making
process in most companies. Many studies concluded that taking random decisions,
without analyzing it or without prior strategies, is like going into an ocean without a
compass. They added that strategic thinking strengths the decision-making process, and
make it more reasonable, and more arguable. Therefore, strategic planning enhances
the trust arising from removing friction and objectives uncertainty. It also increases
customer satisfaction; a true value check and contributes to improved retention and
growth. On the other hand, especially in SMEs, the decision-making process is really
simple, it includes in the majority of cases many points of view to discuss, and also it
gives a huge importance to external environment. Thus, it can be concluded that in large
companies, the strategic planning has an important influence in decision-making, on the
contrary in SMEs where there is an inclusive approached, mainly based on the external
environment of the company.

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Strategic planning and performance:

The previous researches put a link between strategic planning and performance. Some
of the authors, have validated in their studies that strategic planning has a positive impact
on the performance and growth of the company. But many other authors, have
determined other key factors, to evaluate the impact, saying that sometimes strategic
planning doesn’t have any effects on the performance, without including parameters
such as the size of the company, competitive advantage, and decision-making
processes.

With the evolution of the world ecosystem, and the massive development in
technologies, other factors can be added to the list, who have proven, and shown that
they are important in this new modern world: Innovation and creativity. For instance, the
case of NOKIA; In the 90’s and 00’s they were the world leading company in
telecommunication sector, despite having a perfect strategy and planning each decision,
the company lost its position, and lost its market share for selling phones. “We did nothing
wrong, but somehow we lost” (Stephen Elop, Nokia CEO, 2013), this closing sentence
from NOKIA’s CEO summarize everything about the impact of these two new factors,
and how studying it will clarify the relationship between strategic planning and
performance.

Interview with TAQATAK’s manager

Decisions making:

The aim of the first part is to discover how strategic decisions are made in the company.
In fact, from the only response collected, it can be seen that its decision scheme isn’t
that complex. Since it’s a start-up, the CEO is the one taking the important decisions,
with the aid of external consultants.

As discussed with the CEO, the company’s actual goal, is to grow especially on the
national Level. Therefore, they are allocating a lot of resources (especially for external
consultants), to plan their strategy.

Strategic planning in the company:

The second part of the interview, have been divide to 7 principal axes:

Internal Environmental Analysis:

The CEO sees that scanning the internal environment and identifying Taqatak’s
strengths and weakness is part from their strategic planning process. It is a crucial, phase
for him, in order to thrive and adapt to the emerging market in Egypt.

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For him, it is also important to include other functions, in defining weaknesses and
strengths, because as quoted: “nobody knows the strengths and weaknesses more than
the workers themselves”. He also insisted that knowing the environmental strength is
becoming part of a yearly exercise for the whole company.

External Environmental Analysis:

One thing is for sure that the external analysis process is also important. In fact, the CEO
spoke about the history of the company, and how the Arabic spring almost bankrupted
his firm. Before the multiple events that Egypt knew during this period, he wasn’t a strong
believer about the external analysis, saying, and I quote: “If you are good in what you
do, then you will find a place in the market. You and only You can decide either to
succeed or to fail”. Today, Mostafa Ashraf changed his mind about external environment
scanning, he claims that examining the concurrence, the political, economic and other
external factors made him put a new vision for his start-up and set new goals and
objectives.

Firm Mission

The CEO, answers in this part question regarding the mission of its firm. He confirms,
that no company can thrive in any environment without setting its own mission, he
describes it as the soul of every company.

He thinks that, being part of a company, means belonging to a certain culture, a society,
no matter how big or small it is. This culture is what motivates the personal to grow and
achieve the common goals of the organization. He claims, that each of his employees
believe in the company’s mission, and workday and night as one, because it is what
gathers them, and what gives them strengths. He added that, he will quit, if he stops
believing in this company’s mission.

Objectives and Goals:

The firm doesn’t have specific goals to reach each year. However, it adjusts its objectives
in function after analysing the internal and external environment and puts goals on short-
term.

Despite going through its 8 anniversaries, the CEO, affirms that his company isn’t mature
enough to set its own standards, goals and objectives. They have a time plan for their
evolution, but still the short range is more important for him at this point. The most
important goal for him now, is to reach the maturity stage, become known on the national
level and have more visibility. Once reached this level, the strategic management

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process of the organisation will change. More long-term objectives will be set in the
future.

Strategy formulation

Elaborating a strategy is considered as a life decision taking for the company, because
it will decide of the growth of the whole organization. As mentioned before, the firm is
focusing on short-term goals, which means, short-term actions. This form of planning
implores the elaboration of many strategic plans for the upcoming months of actions to
be taken for this short period of time.

The CEO states that the process of elaborating the strategy in his start-up is starting by
making scenarios, based on the internal and external analysis elaborated, as well as the
analysis elaborated by the external consultants. The scenarios are likely created by field
operational and presented to him. The idea is to discuss all the propositions, simulate all
the scenarios, and then take the adequate decision. It is recurrent that a change in the
strategy can occur, in a short notice, but that is decided by other dimensions.

He gives as an example the latest situation which is the sanitary crisis caused by COVID-
19, has proven for him that no matter how it is planned, and no matter what strategies
are already put in application, an adaptation to the current circumstances is a must in
order to remain the position and compete in nowadays unstable environment.

He adds: “It is more important to know when to change strategy, than making a strategy”.
Timing is, indeed, a crucial key for the plans of any company in the world.

Strategy controlling and evaluating

In the business model of the company, and as what was claimed before, reviewing each
strategy is a key element in the firm. In fact, as he insisted on many times, his actual
business model, requires setting short term goals, and in order to reach them, the firm is
obliged to evaluate the strategy, the objectives achieved so far, to see if it needs some
remodeling or even the elaboration of a new plan.

The firm doesn’t have a formal strategic plan. The reason behind this is that putting a
strict plan will only put barriers and make the company lose valuable time to detect any
anomalies of what has been planned due to the changes that can occur on the planned
actions. Therefore, Taqatek doesn’t put a sophisticated plan. However, it gives a huge
importance adaptation of the actions with to the external and internal environment in
order to be reach the settled short-term goals.

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Firm Growth

As mentioned previously, reaching the maturity stage and growing is by far the key aim
of the company. For the CEO of this start-up, growth doesn’t only mean growing
financially, but keeping the visibility in the market is a really important KPI in Taqatak’s
business model. It is measured by calculating the ratio of new clients / clients. He adds
that “results show that we are having the same numbers as our competitors, and that is
a good sign for our strategy”.

Strategic planning and creativity in the company

The CEO affirms that as a young start-up, creativity and innovation are the most welcome
in the company, saying that it isn’t only for his company, but for all the start-ups.

The innovative mindset is the soul of a young SME, to face the uncertainty, and also the
unpredictable challenges that come with each day light. Therefore, the creative element,
explain somehow, the lack of implementing strategical planning in his company. As seen
in the part below, his start-up doesn’t employ strategic planning as a key factor for their
growth, for two reasons: the uncertainty of the external ecosystem and because plans
are always changing, which gives place and more importance to innovation and
creativity. In his opinion, implementing strategic planning in his company will kill the
innovative spirit within his employees. He also referred to big companies, where they
rather stick to the plan, and strong hierarchy, and this conduct to only one result that
creativity doesn’t have a place among them.

He concluded, that from his experience, for a small company, the better you were
innovative and creative, the better you adapt to the markets, and enhance your
performance. He also claims that the more the company follows a strict strategic plan,
the less it gives importance to creativity and innovation.

Strategic planning as a mechanism for coordination

The previous researches’ evidence suggests that strategic planning is an important

administrative mechanism. By coordinating the planning process, the strategy
department acts as a communicator between divisions and senior management.
International companies such as the majority of cases in this study are often
decentralised to a certain degree. Their decentralised structure lends a certain amount
of autonomy to business divisions, which is also evident in the proceeding of the planning
process. Business units need to prepare their individual business plans and pass them
on to the planning department, which in turn is in charge of compiling an overall corporate
plan. The authors report a shift away from command management styles to facilitate and

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empower. A change in the companies’ environments can often trigger the need for a
deep dive in order to adjust the strategic plan. This involves the assessment and
invitation of relevant participants which could be a certain number of functional people
(R&D, accounting), divisional representatives (regional or business unit), and in each
case a member of the strategy department.

For multinational companies that are based in many different countries, the previous
researchers conclude that the role of strategic planning is evident as a coordinating
mechanism. The diversity of features, the size, the diversity of products, and the
production network of all its sites, gives an important role for strategic planning as a
coordination mechanism. For example the case of the German company BASF; BASF’s
planning department has a powerful position in the organisation due to the company’s
distinctive features: its size (BASF is the world’s largest chemical company), its diversity
(the company produces around 8,000 products) and its high level of integration (which
BASF labels ‘Verbund’). BASF’s integration extends well beyond the linear and vertical
integration otherwise typical for chemical companies. The ‘Verbund’ is facilitated by close
physical linkages such as the fact that most of BASF’s production sites are located in
and around Ludwigshafen in Germany, where the company is headquartered. BASF’s
multifaceted nature adds to the complexity of the planning process, making it internally
the central coordination mechanism, everybody there knows that a centralised strategic
planning function is very important. The department organises meetings, planning
documents and commissions for the assessment of new business opportunities. The
coordination aspect of strategic planning can be witnessed in every company included
in the case study sample, however not to the extent to which it plays a role at BASF. All
planning departments are in charge of disseminating information to divisions regarding
the content of strategic plans and then compiling outputs from business units into one
comprehensive corporate plan.

Strategic planning as communication tool

The previous case studies showed that the role of strategic planning as a communication
device was emphasised by the majority of companies. The format of communication
mechanisms may vary but the core idea is that “the left hand knows what the right hand
is doing”. The complexity of managing information flows becomes more difficult the larger
and more diversified a company gets. Communication needs to be open, fast and flexible
for all parties to be sufficiently informed. Thus, the planning department takes on the role
of managing information flows from divisions to corporate management and vice versa.
In this context, the department takes on the role of supporter, challenger and inquisitor.

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In relation to the board, for example, the department acts like a divisional representative,
defending divisional proposals while challenging demands from the top (‘supporter’). Vis-
à-vis businesses, the planning department’s role is to propose and challenge
(‘challenger’ and ‘inquisitor’) thereby representing the interests of the board. For
example, a case study was conducted on Bosh International. The communication role of
the department changes depending on the partner they communicate with. On the one
hand, corporate planners take on the role of internal consultants towards businesses,
supporting and advising them in their strategic planning activities when possible and
necessary. In other hand, the planning department exercises control over business
divisions thereby taking sides with senior management.

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4 Practical Implications
This research suggests a critical analysis of the role of the strategic planning, as a
complex managerial tool, in improving the organizational performance, with a little focus
on studying this linkage in small businesses that, had a crucial role in enhancing the
economic growth in nowadays challenging environment. The phenomenon of reaching
a competitive advantage over competitors and realize a high financial performance in a
complex market environment has always intrigued scholars, however, interpretations
regarding this topic where mixed and different. In a matter of fact, the complexity of the
actual climate is what makes the understanding of in what way organizations can thrive
in any environment regarding its circumstances through employing strategies, more
specifically, by adopting an effective strategic planning process, critical.

Based on the previously established theories threating the growth of small companies
as well as researches about the complexity of the managerial tool which strategic
planning research, this thesis delivers additional managerial implications which will
contribute to this underdeveloped aspect of the literature about strategies in the future.
Acknowledging the difference and contradictions of interpretations in preceding
investigations on this critical theme, this research adopted an abductive case-study
approach, combining both theory and data-driven research, and focused on four main
strategic aspects recognized through the data analysis: focus on internal and external
environments analysis, enhancing innovation, flexibility and evaluation of the strategy.

Numerous studies have highlighted the importance of the environmental scanning and
how important it is to achieve the planned goals and desired objectives. Through
business analysis, a firm could know in what it should invest to maintain its strengths and
try transform its weaknesses into strengths, besides that, business analysis provide the
organization with knowledge that helps to determine the actions that should be
undertaken to seize the opportunities, and avoid the threats that could represent a
challenge to the survival of the firm. The SWOT as the most efficient tool to drive analysis
that aim to evaluate the internal external factors of an organization’s environment. The
identification of an organization’s resources, its aptitudes, core capabilities, what
constitute potential competitive advantage to the firm is done through the internal
scanning, while the external analysis detects potential opportunities and threats through
looking at resources of its rivals, the business environment, and the over-all environment
(Bonnici & Galea, 2015, p. 1). According to Khashei & Ashofteh (2016, p. 2614), the
reason behind the inefficiency of traditional strategic planning is partly due to failure in
predicting environments at chaos border. This thesis affirms the need and the huge

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importance of the business analysis in the strategic planning formulation process since
it is extremely crucial and represents one of the key factors for a successful strategic
planning leading to organizational performance. Through the empirical study, it appears
that performing in nowadays environment is possible only when the firm analyses the
different components of the internal and external environments no matter what is the size
of the company and the sector in which it competes. Sometimes, an unpredictable event
can impede the execution of planned actions, therefore the achievement of the objectives
as well as the success of the strategic planning is highly uncertain. In other terms:

The more the organization analyzes its internal and external environment (e.g.” when
the organization assess factors that influence its activity either externally or internally),
the more successful is the strategic planning (e.g.” the business realize better financial
results and gain competitive advantage over its competitors).

Past studies showed a tension between literature about the impact of strategic planning
on the innovation, whether it enhance it, or it impede the creative spirit within and
organization, and how this can impact the overall-performance and the competitiveness
of a firm, as well as the achievement of its goals and objectives. Regarding this strategic
challenging issue, many studies assume that strategic planning decreases the
development of new projects, therefore it impacts negatively the creativity and innovation
(Arend et al. 2017, p. 1713). While other decline this theory since bigger companies do
not necessarily produce NDP projects (Song et al. 2011, p. 503). Interestingly, while the
strategic influence on innovation is highly impacted by the sector and the size of the
company, it appears this research that innovations can be more crucial for the firm that
the planning is. This study sheds the light on the importance of enhancing innovation
within the firm to maintain the competitive advantage over the competitors. The
organization should always have an eye on the market, through analyzing the
environments, and try to be aligned with the changes and the fluctuations. In today’s
competitive climate, technology and tendency to growing fast push organizations to
always align to the market and offer highly innovative, customized and unique solutions,
so smaller firms can successfully strive with well-established incumbents, avoid price
competition, create new demand and, thus, facilitate firm growth. Therefore, SMEs
should always set a flexible strategic plan that allows innovation and do not hamper it.
This will make them gain more competitive advantage and reach better performance. In
other terms:

The more the organization innovates (e.g.” when the organization turns new idea or
invention into a good or service that creates greater added value), the more it gains

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competitive advantage (e.g.” when the firm competes better that its rivals in the same
industry).

While Khoshtaria (2018, p. 87) considers that companies that focus on a strategy that
is based on a formal strategic planning and analytical techniques, achieve and realize
better indicators in terms of overall performance, than those less focusing on this type of
strategy, precising that a formal strategic planning refers to a balanced and complete
strategic planning process, clearly formulated, that consists on the following elements:
identification of the goal, formulation of the strategy and its evaluation. Opposing,
Khashei and Ashofteh (2016, p. 2617) claim that in nowadays complex environments,
strategic management struggles to, in one hand adapt the creativity and the innovation
with the limit of chaos, and on the other hand maintain the smoothness of the execution
of the strategic plans, therefore the need for a strategy allowing more flexibility of the
strategic planning could rise and enhance the performance of the organization.

Most of organizations aim to adapt their strategy to their situation, both internal and
external environments, as well as the goals and objectives they look forward to
achieving. Through the analysis of previous researches and the exploring the case study
of the Egyptian start-up, it is observed that most of the high-growth firms focus on some
type of product, process or service innovation. The prevalence of flexible strategies
allowing innovation among the high-growth firms is not surprising in itself: such strategies
have been generally found to lead to outstanding performance. As indicted above, this
study corroborates those statement and expands the firm growth literature by providing
new empirical evidence to support the innovative spirit among employees within
organizations in nowadays complex and challenging environment. Formulation of the
strategy should therefore be more flexible. Furthermore, this thesis supports the idea
that stands for delegating the strategy formulation to external consultancy firms. Experts
in strategy are more likely to put the adequate strategy to any organization, in function
of the results from the internal and external analysis. Therefore, it can be claimed that:

The more flexible is the strategy (e.g.” when the plans can be adjusted depending on
the fluctuations in the market), the more the organization achieve its objectives (e.g.“
when the organization generates higher incomes and become competitive”).

Since the strategy of the company should focus on flexible strategic planning to adapt to
the changes and fluctuations of the environments, evaluating the strategy is therefore a
necessary. Findings of this thesis affirm that as the company is not obliged to follow a
strict and sophisticated plan, it has to assess and examine the execution of the actions,
and how far the objectives are attained. This evaluation process is helps in adjusting and

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correcting the strategic plan and adapt it to the changes of the environment as it is
supposed to be. These findings accord with previous empirical studies supporting the
importance evaluating strategies. Hieu and Nwachukwu (2019, p. 43) state that
evaluating strategy helps giving preventive signals about threats that could hamper the
success of the strategy through prompting management to ask interrogations on the
completing process or the leaders’ reliability and competency. Strategy evaluation
process highpoints organizations’ effectiveness in responding to new challenges that
make them achieve their strategic objectives. In fact, companies must assess their
abilities and skills for efficacious implementation of the strategy. Consequently, strategy
evaluation process guarantees that businesses adjust their strategy to any menace
resulting from the fluctuations of the environment. A strong strategy assessment process
delivers information to the management about the main sources causing failure in
accomplishing the organizational strategic goal. Undeniably, strategy evaluation
contributes in protecting the organization from failure, averts firms from taking mistaken
decisions and helps them to forestall complications if there is change in the internal or
the external environment. Expressed in other terms:

The more the organization evaluates its strategy (e.g.” when the firm controls the
executions of the plans), the more successful is the strategic planning (e.g.” the strategic
planning becomes more efficient and enables the organization to achieve its goals and
objectives”).

The above findings confirm and enriches the literature by showing that innovative and
more flexible strategies are pertinent for the success of a small firm in adverse
conditions, conditional upon being accompanied by affective environmental
assessments as well as strategies evaluation.

Closing, the complexity of the environments is what makes the strategic planning a
complex managerial tool, that needs to be, necessarily, used by all executives whether
in small or medium or big companies, no matter what the sector is. Strategic planning
should be accompanied by many factors, previously cited, in order to improve and
enhance the organizational performance and avoid the failure of the strategic objectives.

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5 Conclusion
Planning is one of the issues that most of SME deal with. In order to determine the
direction of the enterprise, to where it is heading, its current position where it stands as
well as the methods and actions that will be undertaken to reach where it desires to go,
every SME has to set a strategic plan since it will serve as an intelligent tool to prepare
and decide actions. Using the strategic planning process will permit to the SME to state
its vision, its mission and its values. It is a process that able an environment scanning,
and henceforth, the enterprise can define its strengths, the opportunities and the threats,
and thus, through conducting a SWOT analysis which is crucial a part in the strategic
planning process. Analyzing the internal and external environments of the SME enable
it to organize and plan for future activities, by recognizing the challenges and address
them to constitute a competitive advantage over its rivals. The subsequent indicators for
this contain setting the budget, training, enhancing capabilities and setting of managerial
vision and mission statements. Mission statements represent the process of defining the
overriding aim of an organization or its overriding goals and objectives. When mission
statements are used in a rational way, they can act as a model to follow for thinking and
acting. Training is also considered to be crucial to the strategic planning process for
SMEs. It is a way used to prepare and afford to the employees with the adequate
knowledge and skills which will enable them to take actions that contribute in enhancing
the overall performance of their enterprise. The budgeting is also very essential to SMEs.
Through setting budgets, the firm can better allocate and distribute rationally its
resources, to ensure a better planning as well as an efficient costs control.

Strategic planning is the process by which a firm sets objectives, that aim to improve and
enhance the performance and gain a competitive advantage over its rivals, as well as
benefiting from a high profit turnover. Numerous are those who argue that the only goal
of a company is to generate financial profit; failure to generate profit would with no doubt
lead to death of the firm.

Strategic planning is the process by which a firm sets objectives, that aim to improve and
enhance the performance and gain a competitive advantage over its rivals, as well as
benefiting from a high profit turnover. Numerous are those who argue that the only goal
of a company is to generate financial profit; failure to generate profit would with no doubt
lead to death of the firm. Therefore, the more the SMEs is performant and highly
profitable, the more competitive it is. When an SME is performant, survival in the
business area is assured.

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Strategic planning is assumed to have a major impact on SME growth. Strategic planning
is and cannot be ignored as a key driver in SME performance. The critical role of strategic
planning and their potentially positive impact on performance should be known to SMEs.
The government understands that the SME sector represents the engine of economic
growth and driver for innovation. Therefore, policymakers and researchers should focus
and the light more on strategic planning aspects which improve the performance, growth
and sustainable development of SMEs.

The research approves the potential for substantial growth in strategic planning, such as
revenue, new locations, and market share. In order to maintain competitive position in
the market, and to develop an appropriate corrective mechanism to guarantee that
deviations of the already settled plans are reinforced and that strategy or plan is adaptive
to the environment fluctuations, all SMEs should use strategic management practices.

Therefore, executives should give more attention to scientific techniques and practices
related to the strategic planning process. For small firms that want to remain competitive
in this complex and changeable environment, managers should be well-trained in order
assure practicing strategic planning in a good manner. In addition to that, commitment
of managers and the whole personnel is qualified as crucial and vital to every company
in order to make better results.

Although top management and small business founders represent an active and key
factor in practicing strategic planning, since they are primarily responsible for the whole
business planning process. External consultancy firms will make the strategic planning
of the enterprise more effective and appropriate. However, provide training programs for
managers in order to help them to improve their abilities and managerial skills is
considered very important since as cited before, they are key factors for the
accomplishment of a proper planning.

Another important point in order to improve and enhance the organization’s performance
is that governments should give more important and support the use of technology as
well as invest in centers that support and grow the culture of developing innovative ideas.
Because in nowadays complex environment, innovation is as important as using
strategic planning to gain a competitive advantage.

This thesis has argued that through strategic planning, an enterprise can improve its
performance even when competing within a highly uncertain environment. However,
strategic planning is considered to be a complex managerial tool due to its insufficiency
in driving the organization towards achieving its goals. Strategic planning can have
negative impacts on many key factors that can have the same importance as the process
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of planning, such as innovation, that gives the firm competitiveness over its rival in
nowadays challenging business market. Therefore, executives need more than just
formulating a strategy, and execute it. Strategic planning requires at the same time a
huge effort in order to set a plan that could face unpredictable events, and a significant
flexibility to not hamper the innovation inside the organization.

In the current situation where the whole word is impacted by the sanitary crisis caused
by the covid-19, organizations’ plans, even though they were judged well-designed
against unpredictable fluctuations, they are with no doubt left uncomplete, or completely
changed to alternative solutions. Therefore, the importance of making a strategic plan
which is more likely to manage crisis, by not only analyzing both external and internal
environments of the organization, but through being able to form the executives and the
managers to make scenarios and acquire the aptitude of making the most optimal
decision without planning but from the results obtained from studying the scenarios.

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Appendix
Strategic management

Figure 2: Components of strategic management

Process of strategic planning

Figure 3: Key concepts of the strategic management process

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Environmental scanning tool

Figure 4: SWOT analysis

PESTEL Analysis

Figure 5: PESTEL analysis‘ elements

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Organizational growth

Figure 6: The five stages of organizational growth

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