Why some businesses do not base their success on strategic planning? - MBAnetbook.co.in

Monday, February 18, 2013

Why some businesses do not base their success on strategic planning?

Particularly most of small businesses do not have a proper strategic plan as they might not seem much sense to do a lot of long-range strategic planning. Here are 7 reasons why some businesses do not engage in strategic planning: 

1. Poor Reward Structures: When a reward structures fails to provide reward for the success, and at the same time a punishment for the failures, it encourage managers to do nothing instead of taking risk to achieve goals, failing and get punished. 
2. Waste of Time and Expensive: Strategic planning is all too often hugely expensive and time consuming as no marketable product is produced thus results in an unused activity. 

3. Laziness and overconfidence: People who have lot of experience they count less on planning also may not want to extend the effort needed to formulate a plan. 

4. Fear of failure: Due to the fear of failure individuals avoid planning since through not taking action, they certainly have less risk of failure unless a problem is immediate and demanding. 

5. Prior Bad Experience: People may likely avoid planning who are having poor experience with planning, where plans have been long, improper, or inflexible. 

6. Tasting Throughout Success: When a firm is running successfully throughout management may experience there is no need to plan since things are fine as they stand. 

7. Self-Interest and Fear of the Unknown: A new plan often seen as a threat as one has achieved status, privilege, or self-esteem through effectively using an old system and individuals are usually uncertain of their abilities or aptitude to take on new systems.

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