The paper goes ahead to give suggestions on how to improve the conventional approach to long-range planning. It also explores the possibility of adopting more qualitative methods like scenario prediction in answering the managers' criticism, providing the rationale behind these ideas. The paper specifically analyses the nature of long-range planning and how it affects the operational policies of an organisation. It also appreciates the limitations of adopting the long-range approach to planning.
Long-range planning is very important for the future of any organisation. Its principal tasks include understanding of the environment, defining the goals of the organisation, identifying the organisation's options, making and implementing decisions and evaluating actual performance (Collins and Porras, 1994). Long-range planning is therefore aimed at exploiting tomorrow's different and new opportunities.
The traditional long-range planning has its basis on the concept of the four essential steps to planning. These steps include monitoring, forecasting, setting of goals and implementation of these goals. Long range planning is meant to help an organisation establish where it is currently, where it is going, where it wants to go, and what it has to do in order to change and head to its desired destination.
The cycle of long-range planning starts by the monitoring of an organisation's selected trends. Then the process of forecasting of these trends' expected future follows. This is done by extrapolating past data by use of regression analysis or any such technique. The organisation's desired future is then defined by setting its goals in line with the expected future.
The development and implementation of specific actions and policies with regard to long-range planning is aimed at reducing any disparity that may exist between the desired future and the expected future. The final phase is that of monitoring the effect of the policies and actions on the chosen trends.
The nature of strategic planning and its impact on operational policies
Strategic planning refers to the process of defining an organisation's direction or strategy and deciding on resource allocation in the pursuit of this strategy, including people and capital. A variety of business analysis techniques are utilised in the strategic planning process, such as SWOT analysis, PEST analysis, STEER and EPISTEL analyses (Bradford and Duncan, 2000).
Strategic planning is therefore the process of formally considering the future course of an organisation (Kono, 1994). A typical strategic planning strategy is concerned with a number of issues such as what an organisation should do, for whom it should do it and how it should excel in its endeavours (Porter, 1996).
Business strategic planning is mainly concerned with how to beat competition or how to avoid it altogether (Bradford and Duncan, 2000). In a number of organisations, this is seen as a process to determine where an organisation goes in the next three to five years, even though some organisations extend their plan to up to twenty years.
For an organisation to determine where it goes, it must exactly know its current position. It is only when it knows its current position that it will be in a position to determine the position it wishes to get to and how to get to it. This then becomes the organisation's strategic plan (Lorenzen, 2006). It gives the general direction of the desired destination for any given organisation.