What are the reasons behind lack of strategic planning? Explain the fatal visions in strategic planning.

 

Reasons Behind Lack of Strategic Planning

The five reasons behind the lack of strategic planning are,

1. Scarcity of Time 

Many of the entrepreneurs do not find enough time to formulate strategic plans because of their busy day-to-day schedules. 

2. Inadequate Knowledge 

Most of the entrepreneurs neither have any indepth knowledge about the planning process nor they understand the flow or sequence of planning process components. Many of them do not even know the sources of information that support formulation of planning process.

3. Lack of Proficiency 

Usually, entrepreneurs have only general knowledge about the venture. They doesn’t possess any proficiency regarding the planning process and its components.

4. Lack of Trust 

The participation of employees and external parties is essential for strategic planning. Entrepreneurs have a wrong belief that involving either employees or external parties in planning process of decision-making is risky job. Due to this reason, entrepreneurs avoid strategic planning.

5. Misperception about Costs 

Most of the entrepreneurs perceive that planning process is a costly affair. For this reason, they tend to stay away from strategic planning process. Beside above reasons, researchers identified some other difficulties or reasons which stopped entrepreneurs from carrying out strategic planning. They are, 

(i) Lack of planning climate 

(ii) Inexperienced managers and personnel 

(iii) Unsupporting economic conditions.

Fatal Visions Concerning Strategy Implementation

Michael E.Porter had identified six major fatal visions explaining mistakes which entrepreneurs do while implementing a strategy, which are as follows,

Fatal Vision 1: Misconceptions about Industry Attractiveness 

Most of the potential entrepreneurs have wrong perception about the attractive industries. They characterize attractive industries as fast growing, glamarous looking or use advanced technology. This is a great mistake that entrepreneurs does because attractive industries have high entry barriers, less products to be used as substitutes and face high degree of competition.

Fatal Vision 2: No Competitive Advantage 

Most of the entrepreneurs generally to meet the competition in the marketplace adopt and copy the strategies which are adopted by their competitors. They consider this step as an easy and risk free strategy, but this doesn’t gain competitive advantage. For achieving competitive advantage firms have to develop unique product and services.

Fatal Vision 3: Unattainable Expectations 

When many entrepreneurs start their new venture, they aim at attaining unrealistic position. Their busy schedules oriented around finding potential customers to their products make them forget about sustaining a competitive advantage.

Fatal Vision 4: Compromising Strategy for Growth 

For new venture to be successful, there should be a balance between growth and unique competitive strategy. In pursuit of fast growth, entrepreneurs usually leave their uniqueness behind which can thus result in reduced competitive advantage.

Fatal Vision 5: Lack of Clear Communication with Employees Regarding Ventures Strategy 

Every entrepreneur has to be open and communicate the venture’s strategy to employees so that employees become the real contributors to the venture’s success.

Fatal Vision 6: High Focus on Financial Returns 

High concentration on financial returns and less emphasis on other aspects, doesn’t lead to ventures success. Profit maximization is the main part of the goals but due consideration on other major and minor goals related to people products, processes etc., is also essential for attaining success. Always a balance has to be maintained between long-term and short-term goals.