2.2.2 Operational Planning
Managers at both middle levels (managers and directors) and lower levels (supervi- sors and group leaders) perform operational planning in order to define the specific
tactics and action steps needed to accomplish the goals specified by top management dd (Morrisey 1996B). Managers and directors break down the company goals into short-term objectives. Supervisors and group leaders specify events and tasks that
can be implemented with the least amount of resources within the shortest period of time. Operational planning ensures that the company applies its resources efficiently to achieve its stated goals. Questions considered in operational planning include thefollowing:
1. What is the most effiCient way of accomplishing a project with known objectives?
2. What is the best way to link up with three top suppliers in the marketplace for
needed parts?
3. What are the operational guidelines for performing specific work?
24 Chapter 2 Planning
Operational planning involves a process of analysis by which a corporate goal or a set of corporate intentions is broken down into steps.These steps are then formalized for easy implementation. Furthermore, the consequences for the business are articulated at each step. Operational planning focuses on the preservation and rearrangement of established categories (e.g., major strategies defined by upper management, existing products, and organizational structures). Operational planning is essentially a programming task that is aimed at making various given strategies operational.
Operational planning is also called platform-based planning because it extrapolates future results from a well-understood, predictable platform of past experience. Results of such planning are predictable because they are based on solid knowledge
rather than assumptions.
Compared with strategic planning, operational planning is easier for engineers to accomplish because past experience and examples are usually available as references.
2.3 WHO SHOULD DO THE PLANNING?
Those who have direct knowledge of the specific subject matters involved should take care of the planning.
In the 1960s, strategic planning was accorded emphasis and attention by the top management of American corporations. Company after company set up high-level corporate planning departments made up of full-time planners who would devise business
strategies. The approach failed to generate the expected business results. As outlined
by Mintzberg (1994), one of the key weaknesses of this approach was that the strategic
planners, while being superior analysts of hard business data, were outsiders insofar as the various specific business functions (marketing, production, engineering, and procurements) were concerned. What was not apparent at the time was the fact that planning new strategies for the future required both hard data and intuitive assumptions. The success of the decision to introduce assumptions, and the extent to which these assumptions could be validated, depended very much on the planner's hands-on management experience, intuitive know-how. and in-depth insight of the specific business activities involved. As such, many plans devised by these strategists were poor. Fur thermore, business managers in operating departments did not wholeheartedly embrace the plans envisaged by these outsiders. Since the 1960s, many companies have abolished their corporate strategic planning departments altogether and have delegated this important planning function to the business units themselves.
The moral of the story is that the most effective way of creating strategic plans for specific businesses or activities is to entrust such planning to those who are intimately involved with the particular businesses and activities. This paradigm is consis tent with the empowerment doctrine whereby decisions are delegated downward to lower level persons who have direct knowledge and in-depth understanding of the subject matters at hand (Barney 2002).
2.4 THE INEXACT NATURE OF STRATEGIC PLANNING
Strategic planning requires an immense amount of strategic thinking (Aaker 2001; Schmetterer 2003). In turn, strategic thinking involves synthesis that likewise requires
Section 2.4 The Inexact Nature of Strategic Planning 25
intuition and creativity. Strategic thinking brings about an integrated perspective of the enterprise, a foresight-albeit not too precisely articulated-of the company's direction that is built upon insights from experience and hard data from market research. Strategic thinking is based on learning by people at various levels involved in conducting specific business activities. Strategic planning invents new categories rather than rearranging existing one