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Review of related literature in business management

Page 11 Share Suggested Citation: Strategic Planning and Management in Transit Agencies. The National Academies Press. It is a leadership and management tool that has been successfully used for decades to help organizations bet- ter prepare for the future and improve long-term performance. There is increased recognition that strategic planning is not enough by itself and that too many good strategic plans have been left to gather dust. Effective leadership is required to both develop and implement strategic plans.

Another trend has been to make the strategic planning process briefer and more flexible. Part of the problem in the past has been that formal and elaborate planning processes have often led to the development of comprehensive and thor- ough plans that are out of date by the time they are produced.

He goes further by suggesting that strategic planning, essentially analytical in nature, may even be antithetical to strategic thinking. Although it began in the military, the early nonmilitary use of strategic planning was primarily in the private sector.

How- ever, its use in the public and nonprofit sectors has increased substantially and there are now several good sources of infor- mation on performing strategic planning in these sectors. Sev- eral reports and articles that pertain specifically to public- sector transportation are also reviewed.

Effective strategic planning and management requires not only deciding what an organization should do, but also its having the knowledge and skills required to do it.

This includes devel- oping and retaining a workforce with the requisite knowledge and skills.

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If so, it could well be that strategic planning and management will be a crucial tool toward this end. There is also a fair amount written on strategic planning in the public and nonprofit sectors. How- ever, much less has been written specifically about strategic planning in public transportation.

This literature review will be selective rather than exhaus- tive. It will cover strategic planning in the private sector; how- ever, it will primarily focus on strategic planning in the public sector and in public transportation. Its ori- gins are often thought to have been in the military, where there was a need to develop comprehensive, long-term strate- gies to win a war as opposed to the shorter-term, more limited tactical planning needed to win battles or skirmishes. The practice of strategic planning achieved considerable popularity in private-sector organizations in the 1960s and 1970s.

In the 1980s, it became more and more prevalent in the public and nonprofit sectors. Unlike other management fads that have quickly disappeared, strategic planning is a management technique or practice that has demonstrated staying power and broad usage across a variety of organiza- tions in both the private and public sectors.

Review of related literature in business management effect of this has been to lengthen the process. An example of this is found in Strategic Readiness: The 1994 publication of The Rise and Fall of Strategic Planning by Mintzberg 2 presented a very comprehensive, complex, and contrarian view of the practice of strategic plan- ning. An analogy might be right brain versus left brain thinking, in which the right brain is considered to be more creative and holistic and the left brain is considered to be more linear and logical.

  • It will cover strategic planning in the private sector; how- ever, it will primarily focus on strategic planning in the public sector and in public transportation;
  • In addition, their financial struc- ture is often defined or controlled in large part by their enabling legislation or funding bodies.

In spite of his belief that strategic planning is not effective at creating business strategies strategic thinkinghe believes that it can play important roles including: Gen- erally, in the public sector, and in public transportation more specifically, the situation is usually more constrained.

For example, the purpose and geographic jurisdiction of public transportation agencies is usually prescribed by state legisla- tion.

For the most part, public transportation agencies are not going to be pursuing business opportunities outside of the area of public transportation. In addition, review of related literature in business management financial struc- ture is often defined or controlled in large part by their enabling legislation or funding bodies.

It might therefore be argued that strategic planning, when thought of as strategic programming as described by Mintzberg, may be the primary role it should play in public transportation. The more creative strategic thinking described by Mintzberg might be used only infrequently, when there is a need for more trans- formative organizational or institutional change.

To remedy this, they developed the balanced scorecard idea, an approach that provides a frame- work for helping an organization achieve its long-term strate- gic goals by viewing the organization from four key per- spectives: The balanced scorecard system involves the development, utilization, and analysis of performance metrics that are devel- oped for each of these perspectives.

This book was first published in 1988, and then substantially revised in 1995. He offers a generic strategic planning model that has been successfully used by many public and nonprofit agencies. This model consists of 10 steps that he refers to as the Strategy Change Cycle 5, p.

Initiate and agree on a strategic planning process including who should be involved, and their roles and responsibilities. Identify organizational mandates e. Identify the strategic issues facing the organization. Formulate strategies to manage these issues.

Review and adopt the strategic plan or plans. Establish an effective organizational vision. Develop an effective implementation process. Reassess strategies and the strategic planning process. There are some lessons to be learned in the revisions the author made to the book in 1995. For example, Steps 7, 9, and 10 were added, reflecting the need to not just produce a plan but to effectively implement it, and also to reassess the planning process as a prelude to another round of planning.

The emphasis is on strategic management, not just strategic planning. In addition, the author places more emphasis on the recognition that strategic planning is different than strategic thought and action a point strongly made by Mintzberg and noted previously.

In summary, the 1995 edition makes a more explicit linkage between leadership, strategic planning, and management.

  • The first is to make the enterprise act as intelligently as possible to secure its viability and overall success;
  • The final type of project is managing knowledge as an asset;
  • As technology develops even further, organizations will make new advances in transferring, sharing, and creating knowledge;
  • He also maintains the most important element in knowledge is action;
  • Like the study of communication, it has roots in many other areas of study—business, management, sociology, and economics to name just a few;
  • He developed this in response to a common knowledge management paradigm that provided a static and passive view of the organizational knowledge agenda.

Bryson is clearly a strong believer in the benefits of strate- gic planning, including the promotion of strategic thought and action, improved decision making, and enhanced orga- nizational responsiveness and performance 5, p. However, he also recognizes that strategic planning has limitations and should not be considered a panacea for all organizational problems or situations.

For example, strategic planning is most likely not an appropriate response to extreme adverse circumstances; if the organization does not have the necessary people, skills, or management commitment to pro- duce a good plan; or if the likelihood of plan implementation is low.

  1. Managers tend to look at the management of knowledge from the point of view that employees are their best asset, whereas those who favor the technological approach deal with what information technology is needed to support knowledge management.
  2. Finally, the last step is to market-test the format and content.
  3. This can be facilitated through best practice data bases, lessons-learned archives, or expert systems. Drucker argues that knowledge management is based largely on the work of Frederick Winslow Taylor, who studied manual workers p.

Bryson believes that strategic planning is here to stay because it effectively deals with substantive issues and con- cerns as well as the reality of political decision making. In 1993, the U. This act requires that federal agencies take a number of steps to operate in a more businesslike manner and that they become more accountable to taxpayers.

Under the GPRA, agencies were instructed to develop mul- tiyear strategic plans, annual performance plans, and annual performance reports. As a result, in 1996, the FTA published its first strategic plan, covering the period from 1997 to 2001.

The study report included a discussion of strategic planning and its benefits, a survey of 104 transit agencies, and a case study of a small transit system in Missouri South- east Missouri Transportation Services, Inc. The author observed that the crux of strategic planning is to create a process that answers three basic questions 7, p.

Where do we want to go? How can we get there? In the survey of transit properties, the following percent- ages of respondents answered that they conduct a formal strategic planning process: In short, there appeared to be a great deal of confusion as to what actually constitutes strategic planning.

The study identified the following managerial tools used by transit agencies that might become part of a strategic plan- ning process: It found that there were a number of obstacles to con- ducting strategic planning in agencies, and that these obsta- cles differed according to the size of the agency.

For exam- ple, inadequate staff resources was regarded as a significant obstacle by small agencies, but much less so by large ones. Conversely, a lack of good information was review of related literature in business management as a serious problem by large agencies, but not so serious by small agencies. Other obstacles cited by respondents included: The study also found that small agencies in particular have difficulty in regard to strategic planning.

In general, these dif- ficulties had to do with inadequate resources, including staff, expertise, data, and the money needed to hire outside exper- tise. Three key conclusions emerged from the study: The need to reinterpret the concept of strategic planning.

  1. Many of the practices set up in organizations can be broadly construed as contributing to the knowledge agenda.
  2. First of all, information technology leads to misconceptions about the differences between information and knowledge.
  3. It began as a loose confederation of interconnected computer networks to help military contractors share large sets of data. Polyani further states that the two aspects of knowing have a similar structure, and that neither is present without the other p.

The importance of organizational readiness. The need to mold strategic planning to the specific context of the organization. Moreover, it may be more than is nec- essary. Five strategies are suggested in regard to this issue: The formality of the process needs to be de-emphasized.

The level of data and analysis should be kept in rea- sonable relationship to the capabilities of the agency. The cost of the process should be kept in some reason- able relationship with the likely benefits.

There needs to be a better understanding that long- range planning is not the same as strategic planning. Long-range planning may be necessary and useful; how- ever, it does not fulfill the same purposes. Strategic planning might best be performed by seg- menting it.

Rather than implementing a single, rigid process, it might be more effective if it is kept more flex- ible and if it uses various tools for specific purposes e. The second conclusion was the importance of organiza- tional readiness; some organizations may just not be ready to undertake strategic planning. Key factors in whether an orga- nization is ready include organizational sophistication and stamina, the flexibility and commitment of management, and the skills and expertise of the participants.

Review of related literature in business management, in regard to adapting strategic planning to the orga- nizational context, management is encouraged to be realistic about the capabilities of the agency, set priorities and clearly define objectives for the process, design a process that reflects these considerations, and build on what already exists in the agency.

In 1985, an article was published about a case study of the development of a strategic management process in the Penn- sylvania Department of Transportation 8. This study made clear the importance of not just developing a strategic plan but of also creating a management process to implement and man- age the plan.

There were several factors that distinguished this effort from typical strategic planning processes at the time. For example, several key structural changes were made. Seven substantive subcommittees were also formed to help manage the effort. Organization-wide planning was centralized and program and project planning were decentral- ized.

All of these actions served to institutionalize the strategic planning process throughout the agency. Considered by some in the transit industry to be a classic text, this report provided an early guide or framework for strate- gic planning in transit.

The report goes on to describe why it is important to do strategic planning, and presents several case studies as examples of how to do it effectively. In addition, the report discusses the following key differences between planning in the public and private sectors 9, pp.