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McKee Chapter 5:
PLANNING AND STRATEGY: BRINGING THE
VISION TO LIFE
CHAPTER OBJECTIVES
5.1 Understand how people think about and plan for the future.
5.2 Describe the planning process in organizations.
5.3 Compare and contrast the typical planning process with the planning process that
takes place during periods of uncertainty.
CHAPTER SUMMARY
Chapter 5 looks at how planning and strategy are the organization’s map to a successful
future. We look at how planning focuses on moving from where one is now to a future
that is different. First we define goal-oriented, directional, and action-oriented planning
and examine how leaders and managers ensure that people plan so that an organization’s
vision, strategy, goals, and actions are linked together.
Next, the chapter addresses planning and types of plans commonly used in
organizations, such as short-term, long-term, single-use, standing, operational, strategic,
financial, contingency, and project plans. From there, we look at how an organization can
business strategies, such as differentiation, cost leadership, niche, and vertical integration.
These concepts are followed by a definition of functional strategies.
From there, we investigate the strategic planning process and the need to scan the
variety of environments that have an impact on the strategy, such as the economic,
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sociocultural, legal, political, technological, and natural environments. When surveying
the environment, organizational strategy should include a stakeholder analysis. We will
explore why this analysis should look at its key stakeholders; primary and secondary.
Following the stakeholder analysis, we will examine a SWOT analysis and the value of
CHAPTER OUTLINE
Teaching Objective: To increase awareness of how important it is to plan for the future
and to create a vision and mission from that plan. From that plan, one can enact and
implement a strategy to help realize the organization’s future goals.
I. How Do People Plan for the Future?
A. Planning Defined – the cognitive, creative, and behavioral process of developing
a sequence of activities intended to achieve a goal or to move toward an imagined
future state.
B. Exploring How People Think about and Plan for the Future
1. Goal-oriented planning – involves determining the activities and steps that
II. What Does Planning Look Like in Organizations?
A. To move and change organizations, good plans must be both rational and creative,
and they must link mission and purpose with goals and activities.
III. How Do You Plan in Uncertain Times?
1. Plans aren’t—or shouldn’t be—static or unchangeable
A. Creating Plans That Can Change: A Modular Approach
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B. Scenario Planning – a dynamic, systematic process in which the manager and
employees envision all the “what–if” scenarios for given situations and plan for
several likely possibilities
IV. What Is a Mission? Why Does Vision Matter?
A. Mission statement – describes who and what an organization is, what it does, and
what it stands for.
1. competitive advantage – those things that positively distinguish the
organization from other organizations.
V. What Is Strategy?
A. Strategy – an organization’s overarching plan that articulates its direction,
B. Types of Strategy – strategies organized around the part of the business they
support
1. Corporate strategy – designed for the entire organization
a. Growth strategy – strategy designed to expand operations and/or
increase market share
i. Acquisition strategy – a strategy designed to buy, merge with, or take
over other companies.
2. Business strategy – strategies that support a particular division of the
business, brand, product, or service line
a. Differentiation – providing a product or service that is perceived as
unique by customers
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3. Functional Strategies – departmental strategies that are developed to help an
organization achieve its goals
VI. What Needs to Be Considered in a Strategic Planning Process?
1. Strategic planning – the process of examining an organization’s internal and
A. Environmental Scanning – the process of assessing social and natural conditions
that have the potential to affect an organization.
1. Economic Environment – the local, regional, national, and global economic
conditions that affect an organization’s ability to achieve its mission and attain
its goals.
viability
5. Technological Environment – companies have used the Internet and other
forms of technology to enhance their businesses
6. Natural Environment – a focal point for many businesses because of the
threat and the impact of global warming, the realization that the supply of
B. Stakeholder Analysis – includes an audit of all stakeholders and an analysis of
how each stakeholder will be affected by an organization’s decisions.
1. Key stakeholders – those who have significant influence or importance
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VII. What Are the Steps in the Strategic Planning Process?
A. Step 1: Evaluate Mission, Vision, Goals, and Strategies
B. Steps 2 & 3: Conduct internal and external analyses
1. SWOT Analysis – SWOT is an acronym for strengths, weaknesses,
opportunities, and threats.
i. strength – any positive characteristic or activity that an organization
possesses
C. Step 4: Craft Strategies
1. Diversified company – a company that has two or more distinct divisions that
produce different products or services
2. BCG Matrix – illustrates how a business unit, product, service, brand, or
D. Steps 5 and 6: Implement and Evaluate Strategies
1. Implementing a Plan Is Sometimes Called “Execution”
2. Evaluation of strategies is and should be a continual process.
VIII. What Is HR’s Role in Strategy and Planning?
A. HR can support strategy and planning through ensuring that the right numbers and
right kinds of people are in the workforce
1. Reduction in force – the dismissal of an employee due to economic reasons,
technological advancements, or redundancy of work
i. Layoff – a termination with the possibility of rehire once conditions
IX. What Can We All Do to Support Effective Strategic Planning?
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1. Pattern Recognition – the process of taking in raw information and mentally
DISCUSSION QUESTIONS
Discussion Questions for Objective 5.1:
1. What approach do you tend to use when planning for the future? Do you focus more on
goals, vision, or current activities?
Suggested Answer:
Student responses will vary. Many people use a combination of the three. You may have
2. Which of the following things do you think you should learn more about and practice:
setting goals, envisioning a future that is meaningful to you, or finding ways to be “in the
flow” when engaging in work or school activities?
Suggested Answer:
Student responses will vary. This is not an either/or question. You should be actively
Discussion Questions for Objective 5.2:
1. Think about a sports team, club, or committee to which you belong. What types of
plans does your group use? Give two examples.
Suggested Answer:
Student responses will vary. Many groups, teams, clubs, or committees engage in any
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2. Choose one organization and describe its planning process using this sentence as a
guide: “A good plan focuses on overarching vision, goals, and activities.”
Suggested Answer:
Discussion Questions for Objective 5.3
1. Why is it important to learn to plan—and to change plans—in today’s world and work
environment? Give examples from your experience.
Suggested Answer:
Student responses will vary. Because things change so rapidly in our current period of
2. Write out three goals and subgoals that you hope to attain within the next year. What
milestones can you define for each goal and subgoal? What action steps can you take to
accomplish your goals, subgoals, and milestones?
Suggested Answer:
Discussion Questions for Objective 5.4:
1. Take a look at your college’s mission statement. What does it tell you about the
institution? Do you feel it accurately describes what your college is and does?
Suggested Answer:
2. Write a personal mission statement that captures who you are. You might start with
answering these big questions: What do you stand for? What’s your purpose in life and in
work?
Suggested Answer:
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Student responses will vary. A personal mission statement is a very useful tool for
Discussion Questions for Objective 5.5:
1. Consider a product you see advertised on television, on the Internet, or in magazines.
What business strategy do you think the company is employing with regard to the
product?
Suggested Answer:
2. Using the Internet, review facts about a company you know well. What is the
company’s corporate strategy? What are its business strategies? Functional strategies?
Suggested Answer:
Discussion Questions for Objective 5.6:
1. Think of an organization to which you belong (school, work, community group, social,
or sports club). Does this group have a strategic plan? Who developed it? Who is aware
of it and who is not? How has the plan’s development and dissemination impacted the
organization?
Suggested Answer:
Student responses will vary.
2. Think about a big decision in your life. Draw a stakeholder map to include the people
or groups who will be affected by your decision. Code them as key, primary, or
secondary stakeholders. Reflect on how this map can help you in stakeholder
management.
Suggested Answer:
Discussion Questions for Objective 5.7:
1. Discuss how each step of the strategic planning process could be used to support
launching a small business on campus.
Suggested Answer:
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Student responses will vary. Students should address the following steps: Step 1:
2. Conduct a SWOT analysis on yourself as a student. Be candid with yourself when it
comes to your strengths, weaknesses, opportunities, and threats. How can you capitalize
on your strengths and opportunities while downplaying your weaknesses and avoiding
threats?
Suggested Answer:
Discussion Questions for Objective 5.8:
1. Do you know anyone who has been fired or laid off from a job? How was it done?
What was the impact on the person? How would you handle firing or laying off an
employee?
Suggested Answer:
2. Describe a selection process in which you have participated (either at work, at school,
or in a social club). Was the selection process strategic? In what ways? Was it tied to the
mission, vision, or strategic goals of the organization? If so, in what ways?
Suggested Answer:
Student responses will vary. Typically the selection processes is a strategic one no matter
Discussion Questions for Objective 5.9:
1. How have you developed your ability to recognize patterns?
Suggested Answer:
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2. To practice pattern recognition, think about your group of friends. What similarities
exist among them? What are some differences? How is your “group” different from other
groups on campus or at work?
Suggested Answer:
END OF CHAPTER ACTIVITIES: EXPERIENCING LEADERSHIP
Leading in a Global World: Modular Planning on a Global Scale
These days, few companies don’t have some kind of global presence. Planning and
setting global strategy in uncertain times takes insight, coordination, and flexibility. In a
highly competitive global marketplace, an organization must be able to change its
quick strategic adjustments or changes. Be sure to include scenario planning as a key
strategic element in identifying what a company can do to be prepared for natural
disasters or political upheaval.
• Toyota
• GE
• Facebook
• Philips
• Siemens
• LG Corp
Suggested Answer:
Student responses will vary. This is a good exercise to divide the class in six teams and
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Leading with Emotional Intelligence: SWOT You
A SWOT analysis is a useful tool for assessing what is going on both inside and outside
an organization. Internally, a company can evaluate its strengths, such as excellent
customer service, and its weaknesses, such as backlogged inventory. Externally, there
may be opportunities, such as untapped markets, as well as threats, such as strong
competition. If done thoroughly, a SWOT analysis can provide useful data for guiding a
scholarship opportunities can benefit you nicely. Threats, such as a tuition hike or a
student loan rejection, might slow down your advance toward early graduation. Do a
SWOT analysis on YOU, Inc. When complete, answer the following questions:
Answer the following questions:
1. What was the most difficult part of the SWOT analysis?
2. What was the easiest part of it?
3. How can your emotions work as both a strength and a weakness for YOU?
Suggested Answer:
Leading with Critical Thinking Skills Leadership and Management— Stereotypes
and Sustainability
As sustainability movements gain momentum worldwide, more companies are revising
their mission and vision statements to address environmental and social issues. Some
companies are “going green” because it is fashionable and profitable to care about the
environment and social injustice. When it comes to sustainability and strategic planning,
some industries face a bigger challenge than others. Chemical companies, for instance,
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As you conduct your research, be sure to do the following:
1. Identify the mission, vision, stakeholders, and long-term and short-term strategic goals
of the companies.
2. Determine how the companies address environmental sustainability in their mission
and vision.
3. Describe any social components of the companies’ strategies.
4. Outline any particular areas that these companies should focus on when doing
environmental scanning as part of the strategic planning process.
Suggested Answer:
Ethical Leadership: Planning for Disaster
What does a company do when it is involved in a major environmental and public
relations catastrophe? When the Deepwater Horizon oil platform exploded in 2010 killing
11 men and injuring 17 others, BP found itself in this situation. Over the course of three
Consider these questions:
1. What does BP need to do in relation to its mission, vision, goals, and strategies to
reestablish its reputation?
2. What information does BP need to analyze in regards to its internal business processes
and its ongoing partnerships?
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3. What strategies could BP craft to move the company forward and away from its legal
and ethical problems?
Suggested Answer:
Student responses will vary. Needless to say, hindsight is 20/20. Based on the lessons
learnt, BP needs to do a major overhaul of its processes and mission/vision and strategies.
ADDITIONAL SUPPORTING MATERIALS
VIDEOS
• William McDonough on cradle to cradle design
“Green-minded architect and designer William McDonough asks what our buildings and
• Chris Anderson shares his vision of TED
“Chris Anderson gave this talk in 2002, prior to taking over leadership of TED. Founder
Richard Wurman was leaving and TED’s future was hanging in the balance. He seeks to
• Juan Enriquez on genomics and our future
“Scientific discoveries, futurist Juan Enriquez notes, demand a shift in code, and our
ability to thrive depends on our mastery of that code. Here, he applies this notion to the
field of genomics.”
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• Al Gore on averting climate crisis
“With the same humor and humanity he exuded in An Inconvenient Truth, Al Gore spells
INDIVIDUAL EXERCISES
1. Ask students to identify their short-, intermediate-, and long-range career plans. It
should be easy for them to differentiate between these three types. For example, some
students may express a long-term career objective of going to medical school. Their
2. When the World Trade Centers were destroyed on September 11, 2001, many
financial companies who held offices or were headquartered there lost untold
3. Although disaster planning is not always on the top of any CEO’s mind, ask students
how 9/11 forced many American businesses to plan consequently for the unexpected.
4. Ask students to think of a 3 month trip to Australia they have to make in the near future.
Divide them into pairs and ask them to describe to each other how they would plan the trip.
5. Ask students to think about their future for approximately 5 minutes (where they see
themselves in 10 years, their future identity, who they want to become, etc.). Ask them to
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6. SWOT analysis. Ask students to apply the SWOT analysis to themselves. Have them create
four columns on a sheet of paper and list their strengths, weaknesses, opportunities, and
TEAM EXERCISE
You are the executive board of a small oil company, Future Fuel, in Colorado. Your CEO
and founder, Tom Bennet, is very avid supporter of sustainability. He insists that money
invested now will pay off in big dividends down the road. You all have a legitimate
concern for the environment and share and support Bennet in his personal and business
philosophy. You are all also very aware of the momentum of the growing “green”
Break the class out into teams of 3-5. Have them discuss the above scenario as the
executive board of Future Fuel and answer the questions that follow the case study.
1. What are you actually aiming to achieve?
2. What is your policy/position on corporate social responsibility and ethics – your
corporate philosophy?
of your goal(s) from question 1?
Additional Research
Artificial Systems and Planning
Recently, a great deal of innovative research in planning has come not from management
and leadership literature but rather from literature on knowledge management
architecture and artificial intelligence. Wang[i] has noted that planning is often socially
learned by watching others plan. The author has identified three key lessons that
observers learn as they watch experts conduct planning: how actions are sequenced, the
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state (or context) in which actions are executed, and the state that results from action
execution. In other words, planning is not learned deductively (which involves a process
of reasoning from general premises to specific conclusions), but rather inductively, from
detailed facts to generalizations. Lane and Kaelbling[ii] tackle the problem of planning in