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 Investigate the concepts, techniques, and practices of long-range planning in a large organization

Unit 4 Planning Group Activities

Long range planning is best done with a dedicated group. In some organizations, especially those in the private sector, the planning is completed by a individuals in leadership positions in the organization. The pubic and not-for-profit sectors have been using a more collaborative approach that involves a broader base of individuals. Thinking of your organization, what type of planning would you expect to see? Why do you think this type of planning would be used?


This unit focuses on activities that need to be performed by the planning group. By the end of this unit, students will be able to:

 Identify issues that impact strategic planning
 Investigate the concepts, techniques, and practices of long-range planning in a large organization
 Conduct an environmental assessment and incorporate the assessment into the strategic planning process
 Identify priority setting processes


Your prior learning experience provides a context for the background information essential for developing the strategic plan. The next part of the planning process may be more complex and time-consuming. In this phase, the planning group must establish priorities for its future efforts. As organizations look at establishing a direction for the future, it is necessary for them to look at the environment in which they exist as well as their internal environments as the priorities are being set. This requires use of the different data obtained in different analyses.

The strengths, weaknesses, opportunities, and threats (SWOT) analysis provides different factors that may interrelate. In this analysis, and others as well, choices have been defined. In some cases, choices have been made as the best of the alternatives. At other times, there was an abundance of information and data through which to sort in order to select the best alternative. The planning committee needs to develop priorities that conform to the vision and mission of the organization and are in line with the various assessments.

A number of critical issues may have been discovered during the information gathering phase. An example may be the results of the gap analysis, which is the gap between the expected level of performance and the actual performance the organization provides. These issues need to be discussed and strategies need to be evaluated for addressing each issue. This unit will investigate the process for establishing organizational priorities.

Different Analyses

Organizations need to be aware of different factors that may be affecting them. Although the SWOT analysis is the most commonly used, there are other types of assessments that can be considered. A stakeholder analysis should be conducted. There is a need to understand the forces and trends that impact the organization. These can be defined using a PEST analysis, where PEST is the acronym for political, economic, social, and technology. An assessment of key resource controllers should also be considered. In addition, there should be a review of actual or potential competitors as well as collaborators. In addition, Porter’s Five Forces can be used by the private sector.

Stakeholder Analysis – Stakeholders are any people who can lay a claim on the resources of the organization. Stakeholders include those individuals, groups, and institutions who may have a positive or negative influence on your plan. The stakeholder analysis needs to start with identifying who the stakeholders are. Once this has been done, it is important to determine what the stakeholders want from the organization. In other words, what expectations do the stakeholders have of the organization? Another consideration is that not all stakeholders have the same level of importance to the organization. For example, the Mayor may be a stakeholder of the police department, and based on his or her position, that individual may be of a higher level of importance than other stakeholders of the Department.

Some of the stakeholders may be placed into a group with similar characteristics. Using the police department as an example, the patrol members may be grouped together, and the officers may be another group of stakeholders. Once the stakeholders are identified and classified, it is important to prioritize the stakeholders in terms of their importance to the organization and its success. As you think of what you want from the stakeholders, you may want to consider if and how you can utilize some of these in the planning process.

PEST Analysis – As the environment is being scanned, there are a number of forces and trends that may be impacting the organization. PEST stands for political, economic, social, and technology. Depending on the sources, there are also other forces and trends that can be assessed.

The political forces may be seen in terms of what the leadership wants to do. The political influences may be seen in laws and mandates placed on organizations, also. As the organization is engaged in the planning process, it needs to assess specific mandates that may influence the final decisions.

The impact that the downturn in the economy has had on all organizations has created some problems and the need for alternatives. For example, the workforce may be very costly, and with reduced income, the organization may need to determine how to stay within the budget while maintaining essential services and or products. It is also important to recognize that the economic ups and downs may be somewhat cyclical. When engaging in long term planning, projections of the future economy must be considered. In some cases, it may be necessary to plan for alternative scenarios. For example, if the unemployment rate is x%, an organization may be expected to perform a level of service of a. If the rate increases to x+2%, the organization may be expected to perform a level of service of b.

Social trends can be seen with immigration patterns, in ages and gender, and with other demographic changes. For example, in Ocean County, New Jersey, there are a number of communities that have an average in excess of 65. This is due to large gated and other senior citizen housing complexes. With the increase in these older citizens, there may be a need to change services that are provided or the way the services are provided. Alternatives need to be considered in the planning process.

Another social consideration is the different generations within the workplace. These individuals bring to the workplace their own general characteristics. The general classifications include: the Traditional, the Boomers, Generation X, and Generation Y.

Traditionals – These were born between 1925 and 1945. These individuals adhere to the rules and believe that contributing to the collective good is an important consideration. They believe in delayed rewards and also work with the concept of pain before pleasure. This means that the job has a high level of importance and needs to be done before the individual takes time for himself or herself. Hard work, a strong work ethic, loyalty to the organization, and family are all important to these individuals.

Boomers – These individuals were born between 1946 and 1964. The Boomers are anti-war and anti-government. They focus on their children, but they also seek personal gratification and personal growth. In general, these individual believe in spending now and worrying later. They feel they are able to handle a crisis and are ambitious. They are loyal to their careers and their employers. They seek to balance work and their personal lives.

Generation X – These individuals were born between 1965 and 1980. This group is highly educated and has high job expectations. They do not have a high degree of loyalty to the organization. As self-reliant individuals, they are more likely to be entrepreneurial in their focus. They seek to balance work and life. They are crave independence, are competent, and ethical. They are driven by results and not the process.

Generation Y – These individuals were born between 1981 and 2000. This group exhibits high morals and are very competitive. They are self-confident and optimistic. Although they are ambitious, they are not focused. They like gadgets and are independent. They are part of the digital generation. In the work life, they exhibit an attitude of “me first.”

As the different generations exist in the workplace, they have different needs and expectations. All of these may impact how the organization will adapt to changes as the organization attempts to meet its long range plans.

Technology impacts all of us. For individuals who are older, they may remember the use of carbon paper to make a copy. Then there was the Xerox copier, which was replaced by a fax process. Now individuals can scan documents into their computers and then email them to the intended recipient. For law enforcement, there are Mobile Data Terminals that allow the patrol officer to check various data from their cars. Field representatives have cell phones to keep in touch with their offices, and there is the global positioning system (GPS) that allows us to find our way to unfamiliar places. Instead of desk top computers, there are laptops and tablets that can be used, and some cell phones have some of the same capabilities that computers have but can keep individuals in touch wherever they may be.

Other factors that need to be considered include globalization, legal, and education.

Many organizations understand globalization, but the public and not-for-profit sectors may feel that they are immune from the impacts of globalization. As people are able to travel around the world, there is the potential for pandemics to travel as well. Although history has witnessed other such pandemics, such as the Bubonic Plague, that have been transmitted via travelers, the rapidness with travel now can mean that individuals who are infected may not be exhibiting any symptoms. This becomes potentially dangerous for other individuals throughout the world. There also is the potential for organizations to off-shore certain processes. In some hospitals, there are doctors that send their verbal medical records to other countries to be translated into data records and sent back to the hospital.

In the legal area, we see a high number of laws passed as a reaction to specific incidents. These laws then need to be reviewed for their impact on the organization. The organization should be reviewing laws and ordinances on a regular basis to see which may create issues for the organization in the future. The plan needs to address these specific issues in order to stay ahead of changes.

The area of education is important for the organization. More individuals are better educated. This creates some potential issues as these individuals want to participate in the decision process. They are not content with taking orders but want to help make decisions.

Porter’s Five Forces Analysis – Porter’s five forces analysis is used to help the organization determine its overall profitability. These forces include: the Competitive Rivalry; the Threat of Substitute Products; the Threat of New Entrants; the Bargaining Power of the Customers; and the Bargaining Power of the Suppliers. As a private organization looks at profitability as its main indicator of success, this analysis is useful in determining success.

SWOT Analysis

The organization should have conducted a SWOT analysis as part of its scanning and assessment process. It might be easier to see the interrelation of the strengths, weaknesses, opportunities, and threats if these factors are placed in a two by two grid. In the major categories, you need to identify the primary strengths and weaknesses as well as major opportunities and threats. There should be identification of a clear match between the opportunities and strengths since these will lead to comparative advantage.

An example of the grid appears below. If we assume that the strengths are outstanding staff, stable funding, and good record of service, then the weaknesses are lack of sufficient staff; opportunities are new mandates, new customers, and new service mix; and threats are new competitors.

Outstanding staff
Stable funding
Good record of service OPPORTUNITIES
New Mandates
New customers
New service mix
Lack of sufficient staff

New competitors

The organization must analyze the current service mix and ask some straightforward questions including:

 What are our current services?
 Based on our current customers, how well do these services meet their needs?
 Does our way of delivering these services meet the customers’ needs?
 Are there different methods for providing these services?
 Are there projected changes in our current customer base?
 Will these changes cause us to change our services or the way they are delivered?
 Are we the best provider of these services?
 If yes, why are we the best provider?
 Do we have the ability to provide high quality service to our customers?
 Are our capacities limiting our ability to sustain our operations?
 Do we have strategic partnerships that will enable us to provide such services?
 Can working with a partner or series of partners enable us to provide better services?

Criteria for Organizations and Service Mix

In 1983, in an article titled “Competitive Strategies for Not-for-Profit Agencies,” Professor J. C. MacMillan of Columbia University wrote about the criteria for determining the appropriateness of service mix to the organization. He outlined the criteria to be used in establishing a matrix for organizations to assess whether their services were appropriate for the organization. Since organizations cannot be all things to all people, using these criteria allowed organizations to make decisions regarding their services or processes.

The initial criterion is fit. Good fit can be determined by asking questions related to certain aspects of service. The service must be congruent with the mission of the organization. Does the service support the purpose of the organization? The current skills of the organization must be sufficient to provide the service. Does the organization have the ability to partner with other agencies or can it share resources with other agencies to provide the necessary service?

In many organizations, there is a desire to provide a specific service. The organization has the expertise to complete the necessary tasks. The particular service seems to fit the organization’s mission, but there is a lack of sufficient resources (e.g., personnel or funds) to actually provide the services. In this case, there is not a good fit between the service and the organization.

The second criterion is the ability to attract resources. This is related to the attractiveness of the service. Does the service attract resources? Is the organization regarded favorably by others? Do other agencies or entities want to be associated with the organization?

Other entities may look favorably on the organization because it complements their own existing programs or services. In some cases, there is a large customer base creating high market demand that can only be addressed by a number of agencies working together. Stability in funding is usually a good magnet for other agencies looking to maximize services during periods of tight budgets. Looking at historic results in the operations is also a factor that can attract partners.

The third area is alternative coverage. In this aspect, organizations look at similar services that are provided in the area. Lack of large service providers or only a few small providers would be a low coverage area. In areas where there are many providers, the coverage would be classified as high. Low coverage areas usually allow for organizations to enter new markets or expand offerings at a lower cost.

The final aspect of the matrix is the organization’s competitive position. This is the organization’s strength and its potential to provide the services relative to other similar agencies. An organization’s competitive position includes factors such as the quality of the service, how effective the organization is, and its market segment or market share.

There are many factors contributing to an organization’s strong competitive position. The location of the organization is a prime factor as is a logical method for delivering the service or product. The loyalty and support from a strong customer base is also important. The organization’s fund raising success must also be considered. In the public sector, this might include securing funds from a supportive legislative body or obtaining grant money from funders.

The organization’s image is also important as is the previous successes of the organization. When organizations serve a large customer base, the competitive position is increased, but the organization cannot lose sight of the necessity of providing the best quality service to the customers. In some cases, the organization can improve its competitive position because of outstanding managerial or technical skills needed to provide the service. Being the most cost-effective provider might also add to the organization’s competitive position.

Cost-Benefit Analysis

In many instances, organizations make decisions based on the benefits that the organization will gain by implementing a specific choice in relationship to the cost of that choice. Private sector organizations want a profit or to show greater benefits than costs. To do this analysis, all costs associated with a service or program must be considered. This includes both direct and indirect costs.

Problems arise in the public and nonprofit sectors when attempting to conduct a cost-benefit analysis. There are many services that have benefits and costs that are not easily quantifiable. In a community policing effort, what is the benefit of having a police officer prevent the first crime of a juvenile? There is a general belief that there is a substantial benefit to this activity, but what is it? Also, the costs of crime prevention are difficult to determine at times. Does having a police presence reduce crime because of the police presence alone?

Cost-Effectiveness Analysis

In some areas, there are concerns about intended consequences and unintended consequences. Some programs or services can clearly state their goals or intended consequences. At other times, the program yields intended consequences as well as unintended consequences. Whereas the intended consequences can be evaluated and counted, the unintended consequences are less noticeable. In attempting to perform a cost benefit analysis, both the intended and unintended consequences must be weighed.

Another manner for determining whether a service or program is worthwhile is a cost-effectiveness analysis. When a teacher provides a given curriculum, can we determine if that teacher is effective? Are there times when the teacher is very good at delivering the information, but the students are unable to understand it for a wide range of reasons? Is there a way that schools can determine teacher effectiveness? Also, there may be a cost for a given level of performance. Does increasing the costs improve the performance?

Organizations must determine if the cost-benefit or cost-effectiveness analysis could or should be used to assist in determining the priorities for future planning. Can the benefits or effectiveness be measured? Can all of the costs be determined? Are there benefits that are intangible? If so, can they be measured in any way? For example, many police departments have invested monies in placing defibrillators in cars. To determine if this is cost effective, the department could determine the cost of the equipment and installation along with the cost of training of the officers. The best case scenario would be that the police officers would never have to use the defibrillator. The benefit would not occur if the equipment is not used. Is this still a good decision to place this equipment in the cars? Should the decision be based on costs factors? Is a decision good if the equipment costs $3,000, but not so good if the equipment costs $20,000?

Public and nonprofit organizations cannot always determine true costs. A number of subsidies may influence the cost of the product or service for which the organization is responsible. These subsidies may not even be known. This makes the analysis process even more difficult to complete.

Core Strategies

Strategies are the action steps that an organization takes to meet its objectives. The organization needs to identify its core strategies and the major focus of the organization’s scarce resources. Future strategic issues need to be reviewed and evaluated in terms of what the organization’s strategies need to be to address such issues.

In the private sector, core strategies might involve a strong financial position or market position. The public and nonprofit sectors may not seek strong financial standing, but may want a break-even point for services provided. As organizations work to maintain their operations, they may have to make decisions that require a reduction in expenditures or an increase in funding. Organizations may also rely on specific fund raising strategies to supplement basic funding. This might include seeking grants or instituting strategies including fees for service.

As organizations work to increase quality, an appropriate core strategy might be implementing a Total Quality Management (TQM) program, seeking International Organization for Standardization (ISO) 9000 certification (, or seeking the Malcolm Baldrige Quality Award ( If the core strategy selected is seeking the ISO 9000 certificate, there may be a number of basic assumptions or facts that the planning group must consider, such as:

 A company desiring international trade status with European countries needs the certification to be allowed to engage in such trade
 The customers in Europe expect such certification of quality processes
 The certification designates a high quality process, but it does not guarantee a high quality product

There can be a number of obstacles to implementing a new strategy. The obstacles might include:

 The organization may not be able to attain the certification
 Staff may be resistant to change and not willing to see the advantages of the certification
 There might be extensive staff training to ensure the processes are done in a manner to ensure the certification

As organizations start to implement the strategies, specific action steps need to be taken to eliminate the obstacles.

The organization should have core values that help define what the organization is and what it stands for. These values will assist the planning group in identifying those strategies that are appropriate since decisions should be in conformity with those values if the organization wants to succeed. As the organization looks toward implementing its strategies, obstacles should be identified so that they can be overcome in the implementation. Additional aspects to be reviewed include basic assumptions about the organization that would make the strategies feasible. For example, when the organization has expertise in a particular area essential to making the strategy work, the possession of this expertise is a basic assumption. If additional staff is required to have that expertise and that staff can be trained, the basic assumption would be that the organization has the ability to obtain the skill through training. Some of these items are facts and some are assumptions that can be made concerning the organization in the given environment.

Organizations need to also identify indicators of success or of failure in their strategies. It would be good to identify such indicators before implementing any strategies. If the organization relies heavily on federal funding, indicators might be changes in legislation or funding decreases in for a particular functional area. For example, the federal government’s increased spending on homeland security is a good indicator for first responders, but significant increases in these areas and a reduction in other budget area might mean that less money is available for social service programs.

Establishing Priorities

Once the planning group identifies the core strategies that it feels are appropriate for the organization, the strategies need to be prioritized. Some of them may be short-term or long-term strategies designed for operational change or growth. Others may be strategic in nature and considered part of the long-range strategic plan. Regardless of their operational or strategic status, a consensus needs to be developed about which strategies have the highest priority for the future given the vision and mission of the organization. It is also essential that necessary resources be allocated for each strategy.

There may be strategies that are considered a high priority, but they may not be feasible at the current time based on internal and external factors. The lack of sufficient staffing or the inability to acquire the necessary skills within the requisite time frame may preclude their consideration at this time. Since public sector and nonprofit organizations frequently work under these constraints, there is some difficulty in developing priorities.

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