The word ‘strategy’ comes from Greek strategies, which refers to a military general and combines stratus (the army) and ago (to lead). The concept and practice of strategic management and planning started in the military, and, over time, it entered business and management.
Reasons for lack of Strategic management
Some companies do not undertake strategic management and planning. Some other companies do strategic planning, but receive no support from managers and employees. In some other cases, managers and employees do not get enough support from the top management. A number of such and other reasons explain why certain companies do not take to strategic planning and management. David (2003) has mentioned various reasons for poor or no strategic planning and management by companies. These are discussed below
Poor reward structure
When an organization achieves success, it often fails to reward its managers or planners. But when failure occurs, the company may punish the managers concerned. In such a situation, it is better for individual managers to do nothing than to risk trying to achieve something, fail and be punished
Content with success
If an organization is generally successful, the top management or individual managers may feel that there is no need to plan and strategize because everything is fine. However, they forget that success today does not guarantee success tomorrow.
As managers gain experience, they may rely less on formalized planning and more on individual initiative and decisions. But, this is not appropriate. Overconfidence or overestimating experience leads to complacency and ultimately can bring downfall. Forethought and planning are the right virtues and are signs of professionalism
An organization may be so deeply engrossed in crisis management and fire fighting that it may not have time to plan and strategize. This happens with many companies and is a clear sign of non-professionalization.
Waste of time
Some organizations view planning as a waste of time because no tangible marketable products are produced through planning. But they forget that time spent on planning is an investment, and there would be returns, both tangible and intangible, in due course.
Some organizations are culturally opposed to spending resources on matters like planning which do not produce instant or immediate results. They feel that spending on planning is a wasteful expenditure.
Previous bad experience
Managers may have had previous bad experience with planning, that is, cases in which plans have been cumbersome, impractical or inflexible. There could be experience of failures also. They would like to avoid recurrence of this.
Honest difference of opinion
Some managers may sincerely think that a plan is not correct. They may see the situation from a different viewpoint, or, they may have aspirations for themselves or the organization, which are different from those envisaged in the plan. Different people in different jobs in the same organization may have different perceptions of the same situation, and this may lead to difference of opinions among them and eventually to lack of planning due to lack of consensus.
When management has achieved status, privilege or self-esteem through effectively using an old system, it often sees a new plan or a new system as unnecessary or a threat.
Fear of the unknown
Managers may not be sure of their abilities to learn new skills or take on new roles or adapt to new system. This is basically inertia against change or fear for change.
Fear of failure
Whenever something new or different is attempted, there is a chance of success, but, there is also some risk of failure. Many companies and managers may like to avoid strategic planning and management for fear of failure.
Employees may not trust management, or, the management may not have enough confidence in the managers. This gives rise to mutual suspicion.