In the ‘current strategic planning in complex and dynamic environments’ strategies are created fundamentally outside the strategic planning process, generally through ‘Planned Emergence’ processes (Grant, 2003), where corporate managers establish the general framework or boundaries (general strategic directions, broad guidelines for action, general performance objectives, etc.) within which strategies emerge from the interaction of business unit managers with the environment. Said strategies are then incorporated into the strategic plan.
Therefore, the content of the strategic plan is primarily determined by the managers of the business units, who have been given a great deal of autonomy to increase the speed of response to changing environmental conditions. And corporate managers, for their part, focus on setting the context in which business unit managers will create their strategies, negotiating performance objectives and challenging the latter’s proposed strategies for achieving those objectives.
The strategic planning process followed in this case is based on a managerial process, of annual periodicity, less formal than traditional strategic planning and fundamentally ‘bottom-up’, which is composed of the following stages:
- Determination and communication of assumptions and guidelines for action: Corporate managers determine and communicate the assumptions (assumptions regarding the environment) and guidelines for action (priorities, guidelines, general performance objectives, etc.) to be considered by business unit managers in the preparation of their strategic plans.
- Preparation of business unit strategic plans (by business unit managers, with the collaboration of the strategic planners of their units).
- Review and approval of the strategic plans of the business units (by corporate managers, through a meeting with the managers of each business unit): analysis of the strategies proposed and their possible implications on performance, and analysis of the compatibility of these strategies with corporate objectives.
- Preparation of the corporate strategic plan, as an aggregate of the strategic plans of the business units (by the corporate planning department).
- Business unit performance monitoring: Corporate managers monitor compliance with the performance objectives (strategic and financial objectives) of the business units.
The following table and figure respectively describe and represent the strategic process enacted by the ‘Planned Emergence’ model, considering the following time periods:
– End of year 1.
At the beginning of the annual strategic planning cycle for year 1, corporate managers establish and communicate to business unit managers the assumptions and action guidelines that they must consider. This annual strategic planning cycle concludes with the preparation of the corporate strategic plan, followed by the implementation and monitoring of the planned strategies.
At all times, and in parallel to the previous process, the managers of the business units are interacting with the environment, developing streams of actions framed within previously established action guidelines, whereby some emergent strategies arise.
The following table and figure respectively describe and represent the streams of actions developed by business unit managers at the end of year 1, from which arose various emergent strategies (i.e., two emergent strategies) that were not incorporated into strategic plan for year 1 as they appeared after the preparation of said plan.
– Year 2.
The following table and figure respectively describe and represent the complete strategic process for year 2.
Table. Description of the strategic process enacted by the ‘Planned Emergence’ model
Figure. Representation of the strategic process enacted by the ‘Planned Emergence’ model (See Note)
Note: Due to space limitations, the descriptive texts only have been included in some of the rectangles or boxes reflecting the actions developed in this strategic process. In all the rectangles or boxes the corresponding action number has been included, whose detailed description is shown in the table above.
Source: Roch (2024).
NOTE: In the book “The strategic process of the firm: Theory and cases” (Roch, 2024) there are more case studies than those included in this blog.
If you are interested in going deeper into the strategic process, allow me to recommend you: - Book: "The strategic process of the firm: Theory and cases" (Roch, 2024). - Courses and consulting program on the strategic process.
