value insights

Strategic Programming Environments- Valutrics

One approach to strategic “planning” that incorporates soft analysis as well as hard is
called strategic programming. Strategic programming provides a framework that delineates
the roles of planning, plans, and planners. This framework constitutes an operational def-
inition of planning.
The central premise of strategic programming is that effective organizations engage in
formal planning not to create strategies but to program the strategies they already have,
that is, to elaborate and operationalize their consequences formally. Thus, strategy is not
the result of planning, but its starting point. Programming is a management activity
which translates decisions into specific action patterns for implementation. The primary
tasks involved in programming are:
1. Scheduling activities in support of decisions
2. Assignment and scheduling of resources in support of decisions (i.e., budgeting)
3. Establishing patterns of work flows in the firm
4. Establishing patterns of authority and responsibility
5. Establishing communication flow networks
Early authors on strategic planning viewed strategic programming as a “narrow con-
text” in which to define planning. However, after decades of experience with planning,
strategic programming is coming to be seen as planning’s preeminent role.

Strategic programming makes sense only when
the world is expected to hold still or change predictably while intended strategies unfold,
so that formulation can logically precede implementation. I.e., it makes sense only after
strategic learning has identified predictable patterns. Naturally, strategic programming
also assumes that the firm will benefit from the rigor involved and the result of the exer-
cise, a clearly codified and elaborated strategic program. It is entirely possible that, for
some firms in some circumstances, the strategic programs rigidity will do more harm than
good. Mintzberg lists the following conditions that seem favorable to strategic program-
• Stability—Strategic programming is done to implement strategy. If the conditions
on which the strategy depend change radically, then the strategy is no longer viable
and the implementation should stop.

Industry maturity—This relates to stability: mature industries tend to be more sta-
ble. Research confirms that industries with high rates of growth tend to do less well
using formalized planning. Markets in mature industries also seem to be controlled
to some extent by the players in that industry.
Capital intensity—Heavy capital investment provides an incentive to engage in
planning. The greater the resource commitment to a single program, the more care-
ful the control required. High levels of capital investment also tend to have longer
payback periods, which also require greater predictability of returns.
Large size—While planning isn’t confined solely to large firms, bigness helps make
planning more effective. Larger organizations also tend to have greater market con-
trol and higher levels of capital investment, which are additional favorable factors
for strategic programming. In addition, formal planning involves considerable
expenditure for planning staff, which smaller firms may not be able to justify.
Elaborated structure—The ideal organization for planning is highly structured.
Loose organizations do not mesh well with highly ordered plans. Imagine trying to
implement a Soviet-style economic plan in the United States without the coercive
power of government.
Tightly coupled organizations—An organization is tightly coupled if the activities
in one part of the organization are highly dependent on the activities in another part
of the organization. A beauty shop is a loosely coupled organization: each beauti-
cian’s work is largely independent of the work of other beauticians. An operating
room is tightly coupled: every activity must be done in a certain order and at a cer-
tain time. The same applies to organizations as a whole. Tightly coupled organiza-
tions may require the structure imposed by strategic programming.
Simple operations—Tight coupling and simplicity are related ideas. Prior to
Frederick Taylor, machine shops were loosely coupled organizations that employed
highly skilled machinists who worked more-or-less independently. Taylor decom-
posed the work into tiny elements that could be done using unskilled workers, but
the result was a department of “machine operators” instead of machinists. The
machine operator organization was tightly coupled; unless each worker did each
operation in the correct order, production would stop. Work now required the coor-
dination of centralized planners. What is generally not recognized is that planning’s
capacity to coordinate work requires simplicity on this scale. Planning’s powers of
synthesis are weak. In the administrative realm, planning must also follow a simple
model. The plan should be capable of being decomposed into simple steps elabo-
rated by a variety of simple checklists and supported by the simple procedures of
scheduling and budgeting.
External control—Another factor that encourages planning is an external influence
with the power and intent to control an organization from the outside. Planning is
a means of providing such control.

So,  strategic programming works best in stable environments and in simple,
tightly coupled organizations with highly elaborated structures. Strategic programming is
facilitated when the firm is a large, capital intensive firm in a mature industry. Strategic
programming is an effective tool for external control of such an organization.

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