Concept of Long term planning
In the long term, companies want to solve problems permanently and to reach their overall targets. Long-term planning reacts to the competitive situation of the company in its social, economic and political environment and develops strategies for adapting and influencing its position to achieve long-term goals. It examines major capital expenditures such as purchasing equipment and facilities, and implements policies and procedures that shape the company’s profile to match top management’s ideas.
When short-term and medium-term planning is successful, long-term planning builds on those achievements to preserve accomplishments and ensure continued progress.
Strategic management activities enable companies to sustain their operations over the long term. Companies can maintain a competitive edge by taking innovative approaches that solve complex business problems. Once the strategy gets set by a company’s executive leadership, each lower-level manager conducts long-term planning activities to set priorities, align resources, focus attention on common goals, and ensure that the company delivers on promises to sponsors and stakeholders.
Using strategic management processes, you establish the mission, vision and strategy for the business. As conditions change, you refine the mission and focus your efforts on achieving your strategic goals. Using long-term planning processes, you align project work with these strategic goals. After assessing stakeholder requirements, you create a comprehensive plan and then execute the plan according to the defined timeline and milestones. Long-term planning also involves monitoring and evaluating activities. For example, in long-term planning you plan the amount of materials required to conduct operations. Then, your purchasing department can use the data about future demands to estimate orders. This helps them negotiate contracts with suppliers and schedule deliveries.
The Association for Strategic Planning certifies strategic management professionals and publishes standards, competencies and encourages business professionals to think, plan and act strategically. Strategic management professionals incorporate change management and leadership development activities into their vision. By questioning your own opinions, seeking out the opinions of creative people and taking a break every now and then, you can improve your own strategic thinking. To demonstrate your expertise in long-term planning, get a credential from the Project Management Institute, which certifies project management professionals and publishes tips, tools and techniques related to all kinds of planning.
Effective strategic management occurs on an ongoing basis. Long-term planning typically involves establishing goals that you expected to achieve five or more years ahead. Strategic management involves assessing relationships to ensure that each department’s objectives align to the company’s overall goals. Long-term plans focus on activities that start now and continue well into the future. This includes activities associated with acquisitions and other complex business transactions. Strategic management defines the direction for the entire company and long-range planning usually differs for each department.
Effective companies use strategic management activities to define policies, procedures and themes for their organizations. For example, many companies emphasize sustainability in their business operations, such as reducing energy use or supporting the use of alternative energy sources and reducing greenhouse gas emissions. Long-term planning allows managers to allocate resources to achieve these objectives. Both strategic management and long-term planning contribute to an organization’s overall financial health. Both enable growth.