Abstract
Innovation is wheel of change and development. Moreover, strategic planning is wheel and new mode of innovation and entrepreneurship. A growing body of literature, under the title of strategy planning and entrepreneurship, addresses the question of how strategic planning impacts on company's performance, competitive advantages, growth and market share. Therefore, almost every section in the chapter contains reports from empirical research conducted to investigate the different aspects of strategic planning in entrepreneurial companies worldwide. The research includes the most interesting parts of planning and entrepreneurship such as: environment, innovation, planning outcomes, benefits, limitations, etc. We find that surveyed companies introduce planning mostly because of their desire for growth, most of them use the entrepreneurial strategic mode, and their average time horizon for planning is less than three years. Importantly, this chapter opens the scientific door and avenue for new soundly empirical/theoretical studies and creative insights about strategic planning and entrepreneurship.
TopIntroduction1
Man plans and God laughs. -Old Yiddish proverb
Every man, every company and every country should have a plan. Old wisdom says that companies which fail to plan, actually plan their own failure. In other words, planning the future means planning success. Strategic planning has received tremendous attention from both practitioners and academics, as business environment has become more competitive and more dynamic. The new competitive landscape, painted by the permanent technological changes and significant globalization trends, is moving towards hypercompetition2, extreme emphasis on price, quality and customer satisfaction, and innovation activities, both in technology and new products/services. In this new competitive landscape, companies exist in highly turbulent and chaotic environments that produce disorder, disequilibrium and substantive uncertainty (Hitt, Keats, & DeMarie, 1998). Panta rhei! We are all familiar with the modern-day managers’ mantra that we live in times of great and constant change. Because the world is turbulent, it is said, and the competition is hyperturbulent, managers must take seriously the continually initiating and adjusting to change. Change, by definition, is good. Resistance to change is bad (Huy & Mintzberg, 2003, p. 79). From history, we can learn that only thing which is constant and certain is change. The environmental changes did not allow business inertia and short-term vision trap. They punished every effort toward past performance and useless business action which do not take consideration about future competitive position. Metaphorically, companies with short-term goal, objectives and myopic strategies are like hunter who was chasing a rabbit, but drove the wolf. Therefore, strategy-making is one of the most critical activities in times of change and in unfamiliar environments (Gavetti, Levinthal, & Rivkin, 2005). Propensity to change in the business environment is critical for every company. That is a to be, or not to be question. In thinking about the future, strategic planning helps to avoid time traps and to exploit changes in environment. Hence, it should not be surprising that many empirical studies find that lots of companies extensively use strategic planning (Rigby & Bilodeau, 2013).
Key Terms in this Chapter
Forecasting: Is a crucial systematic process which helps managers to anticipate the future business events and to reduce company risk.
Entrepreneurship: Is an essential process of creating industries and markets through seeking new and exploiting current market opportunities and resources.
Strategic Implementation: Is a main course of strategic action for translating the planning documents into reality with the help of organizational capabilities.
Strategic Planning: Is a set of steps that clarifies the future and defines or redefines the company position through preparation, selection and implementation of strategies.
Innovation: Is an entrepreneurial tool or product which leads to superior competitive position by creating new exceptional value for customers.
Time Horizon: In planning refers to the amount of time that management looks into the future when preparing planning documents and business operations.
Entrepreneurial Strategies: Are group of different decisions and actions within a company when launching a new product in order to achieve sustainable competitive advantage.
Planning: Represents the base for the other management functions and includes identification of the core competences, environmental trends, objectives, polices, and plans.