Corporate finance criticism
The article is a descriptive study about effective strategic process to use in solving issues within a company. The study used survey as its research design. It offers a more effective strategic process that is decision focused.
STATEMENT OF THE PROBLEM
Mankins and Steele’s main objective is to give a more effective strategic process that would result in making faster and better decisions. They studied and showed the major reasons why strategic plans fail. Responses to the survey they conducted indicate the companies’ perception of strategic planning, the strategic process they traditionally use, and the new strategic process (if any) they use to fix major issues.
Mankins and Steele gave an adequate description of their research problem. They identified the major issues to be tackled such as the misperception and misuse of strategic planning. They also gave specific examples of the traditional planning models of some large companies, such as Boeing Commercial Airplanes, Microsoft, and Texron and the new strategic process they use.
DESCRIPTION OF RESEARCH PROCEDURE
The researchers surveyed senior executives from 156 different companies worldwide all of which have sales more than $1 billion. They “asked these executives how their companies developed long-range plans and how effectively they thought their planning processes drove strategic decisions.”(Mankins & Steele, 2006). The survey they conducted was sponsored by Marakon Associates, a strategy and management firm, in collaboration with the Economist Intelligence Unit.
FLAWS IN PROCEDURAL DESIGN
The researchers only included companies with sales more than $1 billion which means that they only interviewed successful companies. This may be because they have already interviewed more than a hundred different companies and so interviewing more will pose a difficulty in the data analysis. However, this could have been resolved if they reduced the number of large companies they interviewed and included some companies that have sales less than $1 billion. This will help us in comparing what strategic process is more effective by comparing strategies between successful companies and not-so-successful companies, measuring success by the quantity of their respective sales.
ANALYSIS OF DATA
The study showed that the major obstacles in delivering good decisions are the timing and structure of strategic planning. Specifically, they found that the companies that use traditional strategic planning cover only 2.5 major strategic decisions each year. By traditional strategic planning they mean that the companies follow a strategic plan made at some point during the year for each business unit. Furthermore, they also found that the traditional planning models are out of tune with what the executives want and hence, top managers are forced to make decisions that often disregard these plans.
LIMITED AND JUSTIFIABLE CONCLUSIONS
The main objective of this study is to find an effective strategic process that will result in making more, better and faster decisions. Their conclusion is that strategic planning should be more decision focused. Executives should continuously review major issues that concern the company instead of having calendar-driven plans that are usually focused on the business units. By giving examples, the study supports this conclusion.
Mankins, M. C., & Steele, R. (2006). Stop Making Plans Start Making Decisions. Harvard Business Review, 84(1), 76-84.