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This Chapter on the strategic management and strategic planning process provide an insight on the basic knowledge on what is strategy and strategic management. it further provide the strategic planning process theory and indicate the importance and benefits of strategic planning and provide the limitations of strategic management.

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Stevens Maleka: Strategic Management And Strategic Planning Process: South African Perspective

STRATEGY MANAGEMENT AND STRATEGIC PLANNING PROCESS

STEVENS MALEKA

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Stevens Maleka: Strategic Management And Strategic Planning Process: South African Perspective

SOUTH AFRICAN PERSPECTIVE

First edition

AUTHOR

Stevens Maleka

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Stevens Maleka: Strategic Management And Strategic Planning Process: South African Perspective

TABLE OF CONTENTS

CHAPTER 1: STRATEGIC MANAGEMENT PROCESS.................................................................. 4

1.1. Introduction ................................................................................................................................. 4

1.2. Strategy ....................................................................................................................................... 5

1.3. Categories of Strategy .............................................................................................................. 9

1.4. What is strategic management .............................................................................................. 12

1.5. Strategic Planning .................................................................................................................... 15

1.5.1. The Strategic Planning Process ............................................................................................ 16

1.5.2. The Strategic Plan Work Product .......................................................................................... 17

1.5.3. The Elements of a Compelling Vision ................................................................................... 19

1.5.4. Translating the Vision Into Strategic Direction .................................................................... 19

1.6. The Difference between Strategic Management and Strategic Planning ....................... 22

1.7. Importance of Strategic Planning .......................................................................................... 22

1.8. Benefits of Strategic Planning ................................................................................................ 23

1.9. Limitations of Strategic Management ................................................................................... 24

1.11. Conclusion ................................................................................................................................ 26

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Stevens Maleka: Strategic Management And Strategic Planning Process: South African Perspective

CHAPTER 1: STRATEGIC MANAGEMENT PROCESS

1.1. Introduction

New approaches to management in the public sector are imperative as governments enter the

new trajectory. Market dynamics have created challenges for public organisations, with the

emergence of the global economy, advances in technology, increased societal demands, and

the need to provide more social services with fewer resources. As well, a widespread desire for

increased organisational scrutiny has increased the pressure for change, given more accessible

globalized information systems and heightened media attention critical of government

inefficiencies in service delivery. Strategic management has gained a sustained prominence in

the management of public services in the past two decades or so. South African Public Sector

departments are increasingly being asked to use it as part of their management techniques. It

has become an attractive management tool to reformers, and it also instills accountability with

regards to the organisational management.

Bovaird (2009: 61) argue that an organisation without a strategy does not have direction and

lead to being incompetent. It is not an exaggeration to say that, the use of strategic

management particularly in this era, when public organisations are considered under-

performing and uneconomical in their use of public resources, could, among other things, help

to enhance public organisations' image and legitimacy. The general mood of the public has

been that public managers must 'do more with less', the situation that requires strategic thinking

in order to 'reduce wastes'. Berry (2001) noted that widespread recession of the early 1990s

precipitated the need to 'hold down the size of the government' thereby forcing political leaders

to initiate public sector reform process that takes strategic management to its heart.

Response mechanisms have emerged within the private market to meet these recent

challenges but government organisations have been slower to respond. This is understandable,

given fiscal constraints and the bureaucratic process axiomatic to governments. However, a

new approach, which incorporates modern strategic management tools, is necessary for the

public sector to achieve improved performance and overall service quality.

While current public policy models have certainly started to reflect a shift away from traditional

thinking about organisational design and public management, a systematic process for creating

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and sustaining improved performance that reflects changes in the environment is clearly absent.

There is enough confirmation which suggests that change is affecting the public sector, and this

change is manifest in the metamorphosing structures and processes of many public

organisations.

The guiding principles in any strategic management process, whether in the public or private

sector, are about understanding what changes are needed, how to implement and manage

these changes, and how to create a roadmap for sustaining improvements that lead to better

performance. The difficulty in strategic management is the challenge of laying a foundation for

success in the future while meeting today's challenges.

1.2. St rategy

What makes a good strategy? If you ask a collection of management gurus and you'll get a

variety of answers. Some say that you need a vision. Others emphasize focus on your core

competencies. Still others would insist that you innovate your business model and on it goes.

There is also a divide on who should formulate strategy. While some hold that it is a

management function, others believe that it should emerge from the bottom-up. Often it is

developed by high priced consultants who specialize in strategy (many of whom have never

actually run a business or organisation themselves).

Strategy is about making sure that your organisation arrives where you want it to at a given

time. However Mintzberg (1994:458) defined strategy as "a pattern in a stream of decisions" to

contrast with a view of strategy as planning while McKeown (2011) argues that "strategy is

about shaping the future" and is the human attempt to get to "desirable ends with available

means". Kvint (2009) defines strategy as "a system of finding, formulating, and developing a

doctrine that will ensure long-term success if followed faithfully". When there is uncertainty in the

organisation, strategy serves as an organisational compass, pointing the direction to where we

need to go without disregarding where we are or where we've been. Strategy is a crystal ball of

the organisation, around which all of the elements of the business can focus and rally.

Johnson and Scholes (2002) define strategy as "Strategy is the direction and scope of an

organisation over the long-term: which achieves advantage for the organisation through its

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configuration of resources within a challenging environment, to meet the needs of markets and

to fulfill stakeholder expectations".

Strategy is an action that managers take to attain one or more of the organisation's goals.

Strategy can also be defined as "A general direction set for the organisation and its various

components to achieve a desired state in the future. Strategy results from the detailed strategic

planning process".

A strategy is all about integrating organisational activities and utilising and allocating the scarce

resources within the organisational environment so as to meet the present objectives. While

planning a strategy it is essential to consider that decisions are not taken in a vacuum and that

any act taken by the organisation is likely to be met by a reaction from those affected,

competitors, customers, employees or suppliers.

As a manager, you need to know what good strategy looks like and understand how it can be

used to create the future for your team or organisation. When mapping out a strategy the

organisation is creating a future that may be three, five or more years ahead. It's not just the

plan itself that has the value, but all the thinking that goes into it, the questions organisations

should ask themselves, and the answers that come forward as strategy is a high level plan to

achieve one or more goals under conditions of uncertainty.

According to an article in "The Economist"- Why a strategy is not a plan, strategies too often fail

because more is expected of them than they can deliver. Freedman (2013) in his book Strategy:

A History, find a workable definition of what strategy is and to show how it has evolved and

been applied in war, politics and business. Above all, he argues, it is about employing whatever

resources are available to achieve the best outcome in situations that are both dynamic and

contested: "It is about getting more out of a situation than the starting balance of power would

suggest. It is the art of creating power."

Sun Tzu, a Chinese general, wrote "The Art of War", a book argue that the way to win is by

always doing the opposite of what your opponent expects. Sun Tzu gave birth to a long tradition

that believed strategic goals could often best be achieved by avoiding the destructive

uncertainty of pitched battle. It was preferable to use "stratagem and finesse" to defeat an

enemy—famine was a favourite tactic of Sun Tzu's—than to expose yourself to "the chance of

arms". His teachings are still used in business schools and military academies today.

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No one is more associated with strategies founded on deceit and psychological manipulation

than Niccolò Machiavelli, who is also still studied. Machiavelli believed that his prince needed

both the cunning of the fox and the strength of the lion to keep power. If David's slingshot had

missed the gap in Goliath's helmet, which unaided by God it might well have done, things would

have gone badly for him.

It is, however, not really until the late 18th century, partly as a consequence of the

Enlightenment and partly through the impact on military and political thinking of the Napoleonic

wars, that the concept of strategy as it is usually understood today made its first appearance. It

was seen as a way of uniting operational art in the military sphere with political objectives. As

Carl von Clausewitz, a great Prussian strategist, put it: "War is not merely an act of policy but a

true political instrument, a continuation of political intercourse carried on with other means."

Lawrence (2013) concludes that it may be better to look at strategy as a form of script, albeit

one which incorporates the possibility of chance events, which attempts to anticipate the

interactions of many players over a long time and which is open-ended.

It should be noted that strategic management is obligatory to achieve success in all type of

organisations. Nevertheless, the way strategy is understood and applied differs depending on

the sector in which your organisation operates, whether it is private, public or voluntary.

Williams (2009: 14) provide the clarity of different strategy of different sectors as follows:-

The private sector is defined by competition.

Companies continue to exist only if they

provide products or services that are better

than those of their competitors, so the concept

of sustainable competitive advantage is

usually at the heart of company strategy.

Another key dimension of private sector

strategy is time. Lead time for developing new

products and getting them to market are often

short and tension can exist between delivering

short-term profits and planning and resourcing

long term strategy.

The public sector delivers public policy and

undertakes functions such as collecting taxes.

It is largely immune to the forces of

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competition, although competition does exist

internally, such as between departments

seeking funding from a limited government

pot. If public sector organisations spend less

than they receive the difference is known as

"surplus", not "profit". Strategy in the public

sector is usually centred on delivering goals to

satisfy the political process and producing

conspicuous efficiency and value for money to

reassure taxpayers. Political pressure

commonly lead to changes in priorities to gain

voter supports, and to a short-term view that

impacts upon longer term strategic planning

Voluntary Sector Strategy

Voluntary organsations can be considered to

fall between public and private sectors. While

their objectives may be social or political, they

are subject to the same competitive forces as

the private sector. They must compete for

funding from public or private organisations,

and from individuals. Unlike the private sector,

however, it is not always clear who the

customers of a voluntary organisations are- is

it the recipients of funding, the donors, the

trustee, or the volunteers who help make it

run? Consequently, strategic management of

voluntary sector organisations is heavily based

upon satisfying all of these different groups,

through careful stakeholder management.

Voluntary sector organisation must be careful

not to spend more than they receive in

donations. Like public sector organisations, if a

voluntary organisation spends less than it

receives, the difference is known as "surplus"

rather than "profit", for social, political and

presentational reasons.

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Figure 2: Features of Private, Public and Voluntary Sectors

1.3. Categories of Strategy

There are three types of strategic planning that are essential to every organisation: corporate,

business and functional. The word strategy is ambiguous in many ways, not the least which is

the distinction of corporate-level strategy, contrasted to business-level strategy, and functional

strategy.

 When you are leading a strategic initiative for executing a corporate-level strategy, you

are creating a new business model

 When you are leading a strategic initiative for executing a business-level strategy, you are

improving several or all of the elements of a business model

 When you are leading a strategic initiative for executing a functional level strategy, you

are optimizing one or more of the elements of a business model.

Private

Organisation in the Market

Ussually strong

Competitive advantage

Profit marking

Gain market share

Voluntary

Donors, recipients &

volunteers

Usually strong

Competitive advantage &

stakeholder management

Surplus

Acting for the social good

Public

Public & Political Leaders

Usually weak

Public approval for resource

Surplus

Providing service

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Corporate strategy- Corporate strategy deals with the overall firm. This kind of strategy is

concerned with market definition: what businesses and markets do we want to be in? A strategic

initiative might be launched to answer that question, or more likely to realize the strategic intent

of a new chosen business or market.

These strategic decisions cannot be made at a lower level without risking sub-optimization of

resources. The first task is to conduct an environmental scan (study the business environment)

in order to identify strengths and weaknesses. Next would be to scrutinize the firm's mission, the

segmentation of its businesses and the integration of those businesses. Completion of these

tasks yields answers to the questions corporate strategy must answer: What are the corporate

performance objectives? How should the firm's resources be allocated to satisfy corporate,

business and functional requirements? Should the design of the managerial infrastructure and

the selection, promotion and motivation of key personnel change? The Red-Ocean-Blue-Ocean

metaphor has been popular over the last few years. A red ocean is a market where competitors

bloody each other up fighting for market share. A blue ocean is an emerging, growing business

arena; potential competitors have not yet identified it and the opportunity for success is large.

An example of corporate-level strategy: The February 2011 announcement an alliance between

Microsoft and Nokia Corp. The alliance involve Nokia will produce phones running Windows

Phone 7, a recognition that Nokia's investment in its own operating system has failed. The

alliance gives Microsoft access to the world's largest phone maker and its huge mindshare - in

many developing nations a mobile phone is known as a Nokia. The deal with Microsoft gives

both Nokia and Microsoft a route to the future in the smart-phone market.

There are four key aspects of corporate strategy. The first has to do with the strategic

management of the current set of businesses in the company's portfolio and the allocation of

resources among them. The second related aspect is the creation of shareholder value through

corporate strategy. The third aspect has to do with the realization of synergies across

businesses and the identification and management of direct linkages between businesses. The

fourth aspect is the strategy of diversification, whether through acquisition or internal

development.

Business strategy - This kind of strategy is concerned with succeeding in chosen markets,

focuses on competitive positioning (where to compete and how) in order to create an advantage

over competitors. An example of a business-level strategy was Domino's Pizza Turnaround

which required all areas of the organisation to pull together to achieve a simple understandable

business goal: have a clear win against competitor in a taste test.

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Business managers should run the business in a way that is in alignment with overall corporate

strategy. The framework for building a business strategy includes developing the mission of the

business, once again conducting an environmental scan and examining the key activities of the

value chain. The action plan that results directs the business strategy, programs and budget.

Functional strategy- This kind of strategy is concerned with making improvements to business

functions that support business and corporate strategy. Functional strategy include IT strategy,

marketing strategy, IT strategy, human resources strategy, and operations. Typically,

documents portraying functional strategy will list estimates and plans for operating expenses,

headcount, and continuous improvement. It carries out the objectives and mission set at the

corporate and business strategy levels. This is achieved by creating action plans and setting

budgets.

Functional-level strategy is the foundation that supports both corporate-level strategy and

business strategy. Many strategic initiatives are simply the implementation of functional

strategies, but often a strategic initiative straddles numerous functions and businesses.

An example of functional-level strategy: In 2008, Swiss Life Group, a Zurich-based insurance

company (ranked #373 on the Fortune Global 500 list) announced a change in its Information

Technology functional strategy priorities. The implications of this was a decision to considerably

scale back the number of IT projects in order to reduce costs through re-prioritization. This was

successful as shown in this November 2010 announcement,

Lastly, in regards to the strategic planning process, it is not a top-down or bottom-up flow of

ideas. It is a flow of objectives from managers at the corporate level combined with a flow of

program and budget alternatives from the business and functional levels. If sincerely executed,

the strategic planning process generates broad participation, a wealth of ideas, consensus and

clarity moving forward. Everyone knows what to do, when to do it and why he or she is doing it.

Regardless of the size of your organisation, are you considering the three types of strategy?

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The Diagramme below illustate the different kinds of strategy

Diagram 2: Categories of Strategies.

1.4. What is strategic management

Strategic management is the process in which an organisation develops and implements plans

that espouse the goals and objectives of that organisation. Strategic management process is

continuous and evolves as the organisational goals and objectives change. Organisations

engage in strategic management to ensure that they adapt to trends and external changes such

as globalization. Several key concepts characterize strategic management and the development

of organisational goals (Wicks, 2014:02).

Strategic Management can be defined as an ongoing the process Dess, Lumpkin and Taylor,

(2005) Indicates that strategic management of an organisation entails three ongoing processes:

analysis, decisions, and actions. That is, strategic management is concerned with the analysis

of strategic goals (vision, mission, and strategic objectives) along with the analysis of the

internal and external environment of the organisation. In essence strategic management

consists of the analysis, decisions, and actions an organisation undertakes in order to create

and sustain competitive advantages. In essence strategic management is centered around

Corporate Strategy

•In which business

should we be in?

•How do we grow in

these business

Business Strategy

•Cost Leadership

•Differentiation

•Focus

Functional Strategy

•Marketing strategies

•New products

development

•Financial strategies

•Human Resources

•Legal Strategies

•Supply Chain

Strategies

•IT Strategies

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businesses world and respond to the questions of "where do you want your business to go "

(goals), "how is your business going to get there" (strategy) and "how will you know when you

get there" (evaluation) (Hofstrand, 2007:1)

A strategic management is like taking a journey during your holiday, you first decide where you

want to go – Cape Town in Robbin Island. Then you develop a strategy of how to get there –

take an airplane (which Airline), drive your car (which highways), etc. This will be influenced by

the amount of money, time and other resources you have available. Then you monitor your trip

to see if your strategy takes you to your destination and how your strategy worked (missed

flights, poor road conditions, etc.). Therefore strategic management is the widespread set of

ongoing activities and processes that organisations use to systematically coordinate and align

resources and actions with mission, vision and strategy throughout an organisation. Strategic

management activities transform the plan into a system that provides strategic performance

feedback to decision making and enables the plan to evolve and grow as requirements and

other circumstances change.

In a nutshell the strategic management can be summarized and defined as the art and science

of formulating, implementing and evaluating cross-functional decisions that enable an

organisation to achieve its objectives",(David,2009:36 -37). "An integrative management field

that combines analysis, formulation, and implementation in the quest for competitive advantage"

(Rothaermel, 2012: 5).

Furthermore according to Johnson, Scholes and Whittington (2008: 11-12) point out that

Strategic management includes understanding the strategic position of an organisation, making

strategic choices for the future and managing strategy in action. Strategic management

therefore defined as the process by which organisation analyse the internal and external

environments for the purpose of formulating strategies and allocating resources to develop a

competitive advantage in an industry that allows for the successful achievement of

organisational goals (Cox, Daspit, McLaughlin. and Jones III, 2012: 27-28). Most importantly to

be noted that strategic management is not about predicting the future, but about preparing for it

and knowing what exact steps the organisation will have to take to implement its strategic plan

and achieve a competitive advantage (Blatstein, 2012: 32).

The following figure presents the relevant key concepts for strategic management process.

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Figure 2: Key Concepts for Strategic Management Process

Goal Setting

At the core of the strategic management process is the creation of goals, a mission statement,

values and organisational objectives. Organisational goals, the mission statement, values and

objectives guide the organisation in its pursuit of strategic opportunities. It is also through goal

setting that managers make strategic decisions such as how to meet targets and higher revenue

generation. Through goal setting, organisations plan how to compete in an increasingly

competitive and global business arena.

Analysis Strategy Formation

Analysis of an organisation's strengths and weaknesses is a key concept of strategic

management. Other than the internal analysis, an organisation also undertakes external

analysis of factors such as emerging technology and new competition. Through internal and

external analysis, the organisation creates goals and objectives that will turn weaknesses to

strengths. The analyses also facilitate in strategizing ways of adapting to changing technology

and emerging markets.

Strategy Formation

Strategy formation is a concept that entails developing specific actions that will enable an

organisation to meet its goals. Strategy formation entails using the information from the

analyses, prioritizing and making decisions on how to address key issues facing the

organisation. Additionally, through strategy formulation an organisation seeks to find ways of

maximizing profitability and maintaining a competitive advantage.

Goal Setting Analysis Strategy

Formation

Strategy

Formation

Strategy

Implementation

Strategy

Monitoring

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Strategy Implementation

Strategy implementation is putting the actual strategy into practice to meet organisational goals.

The idea behind this concept is to gather all the available and necessary resources required to

bring the strategic plan to life. Organisations implement strategies through creating budgets,

programs and policies to meet financial, management, human resources and operational goals.

For the successful implementation of a strategic plan, cooperation between management and

other personnel is absolutely necessary.

Strategy Monitoring

A final concept is monitoring of the strategy after its implementation. Strategy monitoring entails

evaluating the strategy to determine if it yields the anticipated results as espoused in the

organisational goals. Here, an organisation determines what areas of the plan to measure and

the methods of measuring these areas, and then compares the anticipated results with the

actual ones. Through monitoring, an organisation is able to understand when and how to adjust

the plan to adapt to changing trends.

1.5. Strategic Planning

Strategic planning provides a blueprint for achieving organisation's goals. When creating a

strategic plan, there are certain objectives that the organisation is trying to satisfy during the

execution of the strategic plan. Understanding the organisational objectives of a strategic

corporate plan will help to create efficient plans to guide organisation's growth (Root, 2014:1). A

strategic plan is a document used to communicate with the organisation the organisations goals,

the actions needed to achieve those goals and all of the other critical elements developed

during the planning exercise. However, s trategic planning is an organisational management

activity that is used to set priorities, focus energy and resources, strengthen operations, ensure

that employees and other stakeholders are working toward common goals, establish agreement

around intended outcomes/results, and assess and adjust the organisation's direction in

response to a changing environment. It is a disciplined effort that produces fundamental

decisions and actions that shape and guide what an organisation is, who it serves, what it does,

and why it does it, with a focus on the future. Effective strategic planning articulates not only

where an organisation is going and the actions needed to make progress, but also how it will

know if it is successful.

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There are many different frameworks and methodologies for strategic planning and

management, however one should note that there is no fixed rules regarding the right

framework most follow a similar pattern and have common attributes. Many frameworks cycle

through some variation on some very basic phases:

 Analysis or assessment, where an understanding of the current internal and external

environments is developed;

 Strategy formulation, where high level strategy is developed and a basic organisation

level strategic plan is documented;

 Strategy execution, where the high level plan is translated into more operational

planning and action items, and

 Evaluation or sustainment / management phase, where ongoing refinement and

evaluation of performance, culture, communications, data reporting, and other strategic

management issues occurs.

1.5.1. The Strategic Planning Process

Strategic planning is one of the most important responsibilities of the senior management of an

organisation. It is the vehicle that senior management should use to set the organisational

vision, determine the strategies required to achieve that vision, make the resource deployment

decisions to achieve the selected strategies, and build alignment to the vision and strategic

direction throughout all levels of the organisation.

Unfortunately, strategic planning is also one of the most misunderstood and poorly used tools in

many organisations. Strategic plans are often large documents with detailed plans created

arduously over months at great effort...only to gather dust and languish after they have been

duly acknowledged and then filed away.

There are several reasons why strategic plans are not developed properly, or not implemented

properly. Among the most common are:

 Senior management does not follow a defined process to accomplish this task. As a

consequence, months of effort are wasted in creating reams of paper that do not have

strategic import.

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 The process is delegated to a planning group, or assigned to the various functional

leaders to complete for their respective areas. If completed in individual functional areas,

the plan may work for individual departments, but is likely to sub-optimize the whole

organisation. If assigned to a planning group, the result is often not truly embraced and

endorsed by senior leadership.

 Senior management does not set aside the time to develop the strategic plan as a

collective team work product.

 The organisation does not understand what a strategic plan is actually designed to

provide. Therefore, the strategic plan is a tactical business plan with multiple year

extrapolations. There is very little about it that addresses actual strategic direction.

 Senior management does to follow a defined process or methodology that will result in a

strategic plan in a timely and efficient yet comprehensive manner.

 The plan is developed but there is no process to communicate it throughout the

organisation and build organisation-wide alignment to its implementation.

 The plan is developed with no implementation guidelines at all. At best, it is implemented

in pieces. At worst, it is unfunded and ignored.

This does not have to become the reality. Strategic plans can be developed in an efficient and

timely manner as long as the senior management team of an organisation is committed to

meeting and working together over a period of several months to develop it.

The general scope of work is a series of dedicated sessions for one day each conducted with

the senior management team once a month for 3-5 months. The number of work sessions may

vary, depending on the complexity of the organisation and the shifts in the business

environment. The process can also be conducted in a series of half day sessions once every

two weeks. In either case, once the process has begun it must be applied with consistency and

dedication by the senior team...as a team. In addition, members of the senor team should be

prepared to spend an amount of time equal to the length of each session for follow-up work from

each session. Members of their individual organisations may be required to provide some staff

input as well.

1.5.2. The Strategic Plan Work Product

The work product (the strategic plan) is a tightly developed, concise document that can then be

shared with the employees of an organisation. This work product (without the high level

implementation plan) should generally consists of the following:

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 SWOT analysis (Assessment of current business environment)

 Vision

 Mission (may also include core values)

 Critical success factors

 Overall organisational performance measures

 Core Strategies – External and Internal

 Performance measures for each strategy

 Major resource deployment decisions

 Assignment of strategic responsibilities

 High level macro implementation schedule

 Monitoring and control system

In addition to the Strategic Plan described above, the following additional supplemental work

products may be developed:

 Communications plan to build organisational alignment

High level tactical implementation plan for each strategy – to include major tasks, high level

schedule, resource requirements, and responsible personnel

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1.5.3. The Elements of a Compelling Vision

Some visions are remarkably short and compelling. In just a few words they capture the

imagination, minds and spirits of people. They are grand in scale and incredibly uplifting.

Sometimes they even have the sense of a slogan about them.

In an attempt to create this kind of vision statement, organisations often set about developing a

single sentence or short paragraph as their vision statement. Unfortunately, the senior team (in

the spirit of full participation and inclusion) often delegates this work to a committee. The

committee dutifully seeks widespread participation and collaboration, modifying its statement

until everyone can accept it. And the result is a meaningless statement filled with platitudes,

corporate pap, and no substance.

Visions are not created by the masses. They are not created by a committee. They are created

by the leadership of an organisation.

A single statement is typically inadequate as a functioning vision. Such a statement may contain

emotional appeal, but it does not have sufficient clarity to be translated into meaningful action.

A comprehensive vision that is also compelling MUST include the following:

 The vision statement itself – short, clear, compelling and distinct

 The core strategies that the organisation will follow to achieve that vision

1.5.4. Translating the Vision Into Strategic Direction

Once the vision has been articulated and agreed by the senior team, it must be converted into

the core strategies that will be deployed to turn the vision into reality.

This step is often omitted by leadership teams. Instead, the vision is converted into specific

goals which are divided into functional areas and assigned to the different members of the

senior team for implementation. Unfortunately, different members of this team – even though

they agree on the vision – may have profoundly different perspectives regarding the best ways

to achieve that vision. The result is disagreement, conflict and organisational confusion as the

organisation attempts to execute to its vision.

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The vision process is not complete until senor management- as a cross-functional integrated

team – has worked together to define and agree on the core overall business strategies that will

be used to achieve this vision

The process of developing this strategy document must include the articulation of the core

strategies. It may also include the measures to use as the benchmark of performance and

progress against this strategy. It may even include the assignment of specific members of the

senior leadership team as champions of specific strategies. This step is especially useful if the

strategies require cross-functional integration and implementation.

The following questions can help guide the strategy development process.

 How will this vision be achieved? What must we do differently?

o What are the key things we must start doing?

o What are the key things we must stop doing?

o What are the key things we must continue doing?

 What does this mean for:

o Our product/service mix

o Our target marketplace(s)

o Our customer base

o Our employees – our talent base

o Our core work processes

o Our infrastructure (locations, facilities, equipment, etc).

o Our business partners – alliances, suppliers, etc.

o Possible acquisitions or divestitures

o Capital requirements

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The Discipline of Execution

In order for a strategic plan to achieve its potential, it must be translated into determined

execution. For this reason the final session(s) of the work with the senior team include the

construction of the execution plan.

The six core execution drivers are:

 Clarity – employees must clearly know the strategic direction, goals and priorities

 Commitment – employees must buy into the goals

 Translation – employees must know what they must individually do to achieve the

strategic goals

 Enabling – Employees must have the proper structure, tools, resources and freedom to

do their job well

 Synergy – Employees must work well together to create results greater than the sum of

their individual contributions

 Accountability – Employees and managers must regularly hold themselves and each

other accountable to their commitments

The drivers are satisfied through four key disciplines of execution. The four disciplines are:

 Focus on the wildly important

o The 20% of the activities that will generate the 80% of the results

o Acknowledging and responding to the concept that people are naturally hard

wired to focus only on one (or at most a few) things at one time

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o Distinguish between what is merely important and what is wildly important

o Wildly important requirements are discovered by filtering through the stakeholder

screen, the strategic screen, and the economic screen

 Create a compelling scoreboard

o People play differently when they are keeping score

o Compelling, visible, accessibly scoreboard for the strategic plan and its crucial

goals

o The scoreboard makes clear from what-to-what – by whom – by when – for how

much

 Translate lofty goals into specific actions

o Establish the difference between the stated strategy and the reality of today's

work environment. The stated strategy is what is communicated and expected.

The current reality is what people are doing every day. Build the bridge through a

specific action plan that moves the organisation from today's reality to tomorrow's

strategic future.

o Everyone must know exactly what they are supposed to do to implement the

strategy and achieve the results being measured on the scoreboard.

 Hold one another accountable all the time

o Collective, shared and individual responsibilities and accountability

o Triage reporting in a team environment

o Finding third alternatives to overcome obstacles

o Clearing the path – removing roadblocks to success

1.6. The Difference between Strategic Management and Strategic Planning

According to David (2009:40) strategic planning is sometimes confused with strategy

formulation, because strategic plan is constructed in this stage. Both strategic management and

strategic planning terms mean the same. The difference is that the latter one is more used in the

business world while the former is used in the academic environment.

1.7. Importance of Strategic Planning

The strategic planning is a requirement for sustained competitive advantage on organisations.

Competitive advantage is what keeps great organisations ahead of their competitors.

Rothaermel (2012:5) pointed out that the organisations, which has a competitive advantage,

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performs financially much better than other companies in the industry or better than the industry

average. Some organisations may achieve it without thorough strategic plan but for the most

players out there it is vital to plan strategically, i.e. analyse, create, implement and monitor, and

do this continuously. It is not guaranteed that organisations will ever achieve competitive

advantage conducting strategic planning but it is an essential process if the organisations

The strategic planning also assists to view things from broader perspective. Johnson et al

(2008:12) argues that other reason why the organisations don't simply rely on their finances,

marketing or operations functional areas to create competitive advantage is that managers of

each area often view things only from their own specific angle, which is too narrow view for the

whole organisation to rely upon. Only the managers (e.g. CEOs or strategic planners) who see

the whole picture of the company and its surrounding environments can make the decisions that

bring the competitive advantage.

Furthermore strategic planning also facilitates collaboration. Nowadays, most companies

involve middle managers of functional areas into the process of formulating strategic plan.

Middle managers are the people who implement the strategies set out in a plan and if they

aren't involved in making the plan, then they aren't so committed to support it. Thus, strategic

planning is used to achieve the competitive advantage and to integrate all the functional areas

of the company by facilitating the communication between the managers of all levels.

1.8. Benefits of Strategic Planning

 Defines organisation's vision, mission and future goals.

 Identifies the suitable strategies to achieve the goals.

 Improves awareness of the external and internal environments, and clearly identifies the

competitive advantage.

 Increases managers' commitment to achieving the organisation's objectives.

 Improves coordination of the activities and more efficient allocation of organisation's

resources.

 Better communication between managers of the different levels and functional areas.

 Reduces resistance to change by informing the employees of the changes and the

consequences of them.

 Strengthens the firm's performance.

 On average, organisations using strategic management are more successful than the

organisations that don't.

 Strategic planning allows the organisation to become more proactive than reactive.

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1.9. Limitations of Strategic Management

Although strategic management brings many benefits to the organisation it also has its

limitations:

 The costs of engaging in it are huge.

 The process is complex.

 Success is not guaranteed.

Above are the reasons why small and medium enterprises are usually reluctant to have their

own strategic departments

1.10. Strategic Direction

A course of action that leads to the achievement of the goals of an organisation's strategy it is

referred as strategic direction . Organisations usually define a Strategic Direction that can be

seen as the organiation's roadmap. Vision is crucial for developing a strategy-focused

organisation and alignment within the organisation. A strong vision leads to enhanced

communication, participation, and commitment by employees. In an organisation people must

share certain values and pictures about where we are going. It is important that people must

have a real need to feel that they are part of the mission of the organisation. (Dess & Picken,

2000:19).

An organisation's strategic direction is created through the development of a strategic plan. The

direction an organisation chooses to take to achieve its goals is an important part of the

strategic planning process. The benefits of a clear strategic direction are felt all over the

organisation --- from ground-level employees, who work more efficiently with clear goals, all the

way up to shareholders, who remain confident in the company's potential for continued success

and financial prosperity.

A strategic direction within a department or business as a whole allows you as a business

owner or manager to focus your employees on specific goals. Employees are able to work with

greater efficiency and with better allocation of resources because each worker is pointed

towards a specific task aimed at achieving the larger goal. Employees should understand how

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each task fits into the larger business goal to gain a greater sense of importance in the larger

project.

With the strategic direction the organisation knows which its objectives are, how will they be

accomplished, what resources are required and creates a general scheme of how the

organisation must work. However a great deal of organisations does not include on their

strategic vision two components that are basic for nowadays: Internet and Technologies.

Internet and Technology components have greatly evolved in the last years (even decades) and

currently play a major role in any modern organisation. Few years ago Internet and

Technologies where thought as secondary characters, usually as support areas, but this has

been rethink due to changes in the market and business environment.

Organisations have to define a clear strategic direction that takes into account Internet and

Technologies. And these two components must be present with a 360° Vision where every

single area has a saying: top management, marketing, sales, financial, human resources,

logistics and any other area.

When defining a strategic direction that includes a 360° corporate vision, every single area of

the organasation must be analyzed, including all processes in order to gain the maximum

possible value. Organisations must establish their strategic direction and then translate its vision

to every area and process. This is done in this fashion because once the corporate objectives

are clear, organisations must can go into every single area of the organisation with ease and

calm and provide the greatest value (aligned with the corporate strategy). It's very difficult and it

is advised against it to define in just one instance how each area will take advantage of Internet

and Technologies. Much better results will be obtained if the corporate wide objectives are

defined at the beginning and then this are applied area by area.

While the benefits of a good vision are quite apparent and every business has some form of a

vision— either implicit or explicit—not all vision statements achieve these benefits. According to

Kotter (1996), an effectively worded vision statement should be, amongst other characteristics,

graphic, directional, feasible, and easy to communicate. Those that do not will likely be

considered bland, vague, overly broad, or generic. Collins and Porras (1991) noted,

Most vision statements are terribly ineffective at creating a compelling guiding force . . . They

don't grab people in the gut and motivate them to put forth their best efforts toward a compelling

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goal. They don't mean something to people all up an d down the organisation. they usually are

nothing more than a boring stream of words. They are not compelling, nor are they exciting.

They're not clear, crisp and gut-grabbing. (p. 31).

The challenge of creating a compelling vision begins with top management. John Seely Brown,

former chief scientist for the Xerox Corporation, argued, "The job of leadership today is not just

to make money: It's to make meaning" (Dess & Picken, 2000:19) . A clear and compelling vision,

relentlessly communicated by a organisation's senior team, is crucial for building organisations

that can respond to rapid changes in technology and markets (O'Reilly & Tushman, 2004).

1.11. Conclusion

This chapter has provided an overview of the strategic management process and thorough

definition of strategic management, strategy, strategic management and strategic planning has

been given. The key concepts of strategic management process were discussed and

importance and benefits of strategic planning in an organisation. Furthermore the limitations of

the strategic management were summarized.

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22. Key Concepts for Strategic Management and Organisational Goals :by Diana Wicks,

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... The influence of boundari geometry on security of iran's western ...; [Ashrafi & Janbabanejad;2014] Strategic planning and composing a vision of Saveh ...; 2014] The political organization of ...; 2014] Investigation of the Persian Gulf formation strategy and its impact on the national security of the Islamic republic of ...; 2014] Functional analysis of country divisions in implementing land use plans with emphasis on ...; 2016] Investigating the role of country divisions in regional development case study: Bovanat Township and Khorambid ...; 2015] A comparative study of the factors affecting the provincial abstraction after the islamic revolution from the viewpoint of political geography and regional development ...; [Cornell & Jude;2015] The system theory of management in modern day organizations-A study of aldgate congress resort limited port ...; [David; 2011] Strategic management, ...; [Hafeznia, et al;2013] Political management of space in simple system ...; [Ghorbani & Rahimi;2009] Urban strategic planning, dimensions and ...; [Hoseini, et al; Strategic planning for the development of Sabzevar ...; [Maleka;2014] Strategic management and strategic planning process. Strategic Planning and ...; [Manmohan;2015] The 4 stages of career planning ...; [Ministry of Interior;2016] Tehran: Ministry of Interior ...; [Nazari; Change levels of political management of space and its role in rural development, case study: Ghazvin ...; [Nickols; Strategy, strategic management, strategic planning and strategic ...; [Nezam pour & Nazmdeh; The role of strategic planning patterns at national ...; Transition from comprehensive planning to strategic planning case study: Baneh ...; [Sadeghi, et al;2015] What is geographical ...; [Saniei; Land use planning a way to balance the urban system and development; [Sheikh Alipour, et al;2019] Investigating the distribution of utilities in spatial justice case study: Four districts of ...; [Shokouhi, et al;2016] Strategic planning of Birjand city development based on SWOT and QSPM ...; [Thompson & Glas; Situational leadership theory: A test from a leader-follower congruence ...; [Wari;2006] Management of the urban environment using remote sensing and geographical ...; [Zaki, et al;2014] The role of political space management in urban development plans, with emphasis on ... ...

Arezu Alanchari Chavdorchi
Zahra Ahmadipour

Aims & Backgrounds: Strategic planning identifies the objectives of political management of space in accordance with its mission and through environmental studies, so that more realistic goals can be determined and implemented. Political managers of geographical space at the level of the cities to carry out their local tasks are bound to formulate strategic plans. The aim of this research is presentation of strategic plan for political management of the geographical space in Shahriar township, based on both systematic and contingency theories. Methodology: For this purpose, AHP method was used to determine the importance and weight of internal and external factors. For presentation of strategies SWOT method was used and to evaluate the attractiveness of each strategy QSPM matrics was utilised. Findings: The findings of the study indicate that within Shahriar township, weaknesses are more pronounced than strengths, and outside the township, threats are more than opportunities. Optimum strategies for political management of geographical space in this situation were defensive. Conclusion: Defensive strategies should be adopted in Shahriar city and these strategies are as follows: Reform the structure of the political divisions of township space in order to attract more capital and create employment; Allocate facilities and amenities to expand industrial agriculture and increase production in the sector; Prevent illegal land use change and reduce green land and its environmental consequences; Adopt effective mechanisms to manage the citychr('39')s water resources and tackle drought; Planning and Investing in Reducing Vulnerability of the City at the Time of Natural Hazards such as Earthquakes; Develop legal mechanisms for migration and management of immigrants to enhance security.

... Menurut Athapaththu (2016) Beberapa organisasi dapat mencapai hasil tanpa rencana strategis yang menyeluruh, tetapi untuk sebagian besar pemain di luar sana, sangat penting untuk merencanakan secara strategis, yaitu menganalisis, membuat, mengimplementasikan, dan memantau, dan melakukan ini secara terus menerus. (Maleka, 2015). ...

The main problem in this research is the demand for companies to change so they can always be able to adapt to external and internal developments so that they remain to exist and are competitive. One way to make a planned change strategy is managed well so that it will have a positive impact on achieving company goals. This study aims to analyze the change strategy undertaken by PT. JOINT ZATTA JAYA (ELCORPS) through changes incorporates values and culture. The method used in this study is qualitative research methods. Primary data collection techniques are done by triangulation of techniques in the form of interviews with informants from company managers, participatory observation, and questionnaire distribution. Secondary data collection by collecting data from journal sources and company reports. The results of this study indicate that change management at ELCORPS is in the form of changes that focus on changing individual values to support the formation of a new culture including professionalism and religious values. Forms of strategy design and implementation of changes that have been made are determining the size of the change, strategy outcomes, determining the competencies needed, design programs and activities, and evaluation systems both process evaluation and outcome evaluation. ABSTRAK Pokok permasalahan dalam penelitian ini adalah adanya tuntutan bagi perusahaan untuk berubah agar senantiasa bisa mampu beradaptasi dengan perkembangan eksternal mapun internal sehingga tetap exist dan kompetitif. Salah satu caranya dengan membuat strategi perubahan yang direncanakan dikelola dengan baik sehingga berdampak positif bagi tercapai tujuan perusahaan. Penelitian ini bertujuan untuk menganalisis strategi perubahan yang dilakukan oleh PT.BERSAMA ZATTA JAYA (ELCORPS) melalui perubahan nilai dan budaya perusahaan. Metode yang digunakan dalam penelitian ini yaitu metode penelitian kualitatif. Teknik pengumpulan data primer dilakukan dengan triangulasi teknik berupa dalam bentuk wawancara dengan informan dari pengelola perusahaan, observasi partisipasi, dan penyebaran kuesioner. Pengumpulan data sekunder dengan mengumpulkan data dari sumber-sumber jurnal dan laporan-laporan perusahaan. Hasil penelitian ini menunjukkan manajemen perubahan pada ELCORPS berupa perubahan yang berfokus pada perubahan nilai-nilai individu untuk mendukung terbentuknya budaya yang baru antara lain nilai profesionalitas dan nilai religi. Bentuk rancangan strategi dan implementasi perubahan yang telah dilakukan adalah penetapan ukuran perubahan, strategi outcomes, penetapan kompetensi yang diperlukan, rancangan program dan kegiatan, dan sistem evaluasi baik evaluasi proses maupun evaluasi hasil. Kata kunci : Manajemen Perubahan,

... The findings of the current study exhibited that the highest percentage of nurses and nursing leaders were not aware of the key performance indicators (KPI's) which might be due to nurses and nursing leaders were not trained appropriately to know the KPI's. Thus Maleka [36] confirmed that the strategic plan should specify the critical success factors. ...

Magda Atiya Gaber

Background: Although there were many cautions about a probable pandemic, the health organizations have not prepared to deal with the COVID-19 pandemic. Coronavirus outbreak is a dangerous threat to humanity. An essential concern to control this pandemic is to outline an action plan, set an evaluation frame, identify monitoring techniques, detect measures, and recognize key performance factors and investigations providing evidence-based information.Methods: The descriptive and methodological design was used to achieve the objectives of the present study. This study was conducted at Zagazig University Hospitals (ZUH's), Egypt. Three types of samples were used: A convenience sample (n = 110) including the nursing leaders, a stratified proportionate random sample (n = 302) from different categories of nurses, and a Jury committee (n = 9). One 1Questionnaire format and 2 opinionnaire sheets were utilized for data collection.Results: Statistically significant differences were found between nurses and nursing leaders concerning the dimensions of vision (p-value .000), mission (p-value .006), SWOT analysis (p-value .008), goals and objectives (p-value .000), the lines of business (p-value .000), the strategic business units (p-value .000), general strategic items(p-value .013), and action plan (role of nursing staff during the epidemic, p-value .000; immediate evacuation system, p-value .000; training, and hospital status during the epidemic, p-value .000; availability of the necessary equipment, supplies, and tools to face the epidemic and consumables, p-value .000; precautions inside the hospital, p-value .010; and infection control, p-value .002). However, there was no significant difference between nurses and nursing leaders regarding dimensions of planning for the planning, values, the key performance indicators, and the evaluation of the nursing strategic plan for COVID-19.Conclusion and recommendations: The questionnaire format of assessing nurses' awareness about the nursing strategic plan for COVID-19 is reliable, valid, and usable. Nurses' awareness about a nursing strategic plan for COVID-19 was generally poor and needs to be raised. The nursing strategic plan for COVID-19 was developed and validated. The suggested strategic plan for COVID-19should be utilized at ZUH's. ZUH's should allocate the needed and required resources for the application of the recommended plan for overcoming COVID-19 or any future occurrences.

... So, procurement planning is an important activity in achieving value for money in procurement means meeting the effectiveness, efficiency and economy aspect of procurement activities. Strategic planning offers a blueprint for an organization to achieve its goals (Maleka, 2014). Planning as a strategic practice enables an organization to establish its priorities and be able to serve the needs of its customers in a better way (Mori et al., 2014). ...

Purpose The significance of the public procurement function is on the survival and development of procuring entities and that of a nation at large. This study aims to focus on examining the influence of procurement planning on the effectiveness of public procurement, experience from selected public procuring entities in Dodoma city, Tanzania. Design/methodology/approach A cross-sectional design was adopted from which data were collected from 146 respondents who were purposively chosen from several public procuring entities located at Dodoma city in the United Republic of Tanzania by using a survey structured questionnaire and analysed through a binary logistic regression model. Findings Findings revealed that procurement planning as a strategic function significantly influences the effectiveness of public procurement. The binary logistic regression model included the implementation of prepared procurement plans ( p = 0.039), the involvement of users as stakeholders and important institutional actors in public procurement ( p = 0.033), compliance to procurement laws and regulations when planning ( p = 0.016) and adequacy of budget ( p = 0.042) as predictors of procurement planning were tested to be significantly related to the effectiveness of public procurement. It was concluded that public procuring entities can achieve public procurement effectiveness through procurement planning. Social implications The implications and policy recommendations of the findings of this study would be useful to procurement practitioners mostly in public procuring entities. Originality/value This study contributes to adding knowledge to the existing body of knowledge on procurement planning as an imperative activity in public procurement in Tanzania.

Valentina Vinšalek-Stipić

Strategic management can be said to have evolved over time and will continue to evolve. In order for companies to be more successful in their operations, they need a methodological approach to developing a strategic plan. Strategy implementation is a complex process because it is a consequence of complex relationships. In accordance with the above, an empirical study was conducted on a sample of 53 companies in the Republic of Croatia. The subject and goal of the research was to scientifically determine the importance of adopting and implementing long-term strategic plans. The main results of the research are that the degree of implementation of the strategy is not significantly related to the indicators of net profit margin (ROS 0.164) and return on equity (ROE 0.216), while it is partially related to the indicator of earnings strength (TSZ 0.304) but is significant for a successful business. The implementation of the research revealed that strategic planning is an extremely important and significant factor for stable growth and development of the company. The implementation of the strategy has an important contribution to the successful operation of the company.

Babatunde Bambi

This study is designed to investigate how strategic planning can be used to enhance the quality of services rendered in the Nigerian university system. The need for this study arose from the excellent performance of the University of Ibadan at the World University ranking, which was guided by a well-drawn strategic plan. Thus, the paper seeks to explain the concept and objectives of strategic planning as well as provide an overview into how the Nigerian university system was established. More so, the paper highlighted how the university management can incorporate strategic planning into their structure with the full knowledge of the SWOT analysis, which refers to the Strengths, Weaknesses, Opportunities and Threats. If properly managed, SWOT analysis can help Nigerian universities achieve their set mission. One major recommendation of this paper is that the university management must first be willing to adopt a strategic planning procedure; partner with all the university stakeholders for success to be recorded in its implementation.

Iyad A Al-Nsour
Iyad A Alnsour

This study aims at exploring the effect of using the BSC perspectives on planning of marketing communication activities in Jordanian pharmaceutical companies. The BSC consists of four perspectives: financial, customers, internal processes and growth and learning. The study also aims at determining the statistical differences in the market share of Jordanian pharmaceutical according to level of using the two variables (BSC and planning of MC activities). This study is descriptive. The questionnaire is the key tool of collecting the data needed from research population. The sample size reached to 231 managers, and the cluster random sample is used. The study concludes that there is a positive statistical effect of financial perspective on planning of marketing communication activities, but the other three non-financial measures statistically failed. It finds also that there a statistical difference in the market share of pharmaceutical companies having BSC perspectives and planning the marketing communication activities. Finally, the study recommends many implications and recommendations that support BSC applications and enhance the planning of marketing communication activities in surveyed companies.

Ira Blatstein

Many organizations do strategic planning in order to prepare for the future. The real value of strategic planning is not primarily in the final plan, but more in the intellectual journey that the participants take in exploring the future. This often sensitizes them to future possibilities that they had not been aware of. It also helps them prepare to shape that future. Over the past 10 years, the author has facilitated strategic planning efforts in two large (4,000 to 20,000 people) organizations, three small (25 to 100 people) organizations, and started teaching strategic planning. This paper will draw on the experiences from all of these strategic planning efforts, while focusing on the approach that one non-profit R&D organization used to take this intellectual journey. The research methodology is based on a strategic planning approach that calls for development of a core purpose, values, Big Hairy Audacious Goal (BHAG), and envisioned future. For a particular organization, a key element of the envisioned future was to "make critical contributions to critical challenges". Immediately this raised the question of how one measures this element. The author and a co-worker developed an approach that involved interviewing knowledgeable people inside and outside of the organization. They were asked to rate the organization's technical work on a grid and explain the basis for their grading. The narrative that accompanied the grading was very rich in feedback to the organization. The difference between the internal and external evaluations, in a few cases, served to focus the leadership group on several key strategic questions.

Vladimir Kvint

Despite the growing importance of the global emerging market (GEM) for the world's business, economies, and politics, it has received a relatively scant amount of academic attention in business and economics courses. This textbook is the first to focus on the GEM and its strategic and economic characteristics. The Global Emerging Market: Strategic Management and Economics describes the fundamental economic base and trends of the global marketplace (GMP) as well as business and management development for the conditions of emerging-market countries (EMCs). Focusing on the formation of a strategic mindset and the decision making process, it explains how to analyze the basic economic factors and the global order, especially in times of crisis. This text also explains how to classify countries related to this new market of tremendous opportunities. Furthermore, the book includes recommendations on how to develop entry and exit strategies for the GEM, work in it and create efficient management systems. Features include: Extensive tables, charts, and graphs illustrating the strategic considerations of the GMP and the GEM. End-of-chapter study questions. Practical examples based on the author's involvement in the development of the GEM, from both sides of the international transactions. This academic book is the ideal guide for current business leaders and students on how to make strategic, symmetric, and asymmetric time-sensitive decisions related to the GEM.

John C. Harsanyi

Equilibrium points in mixed strategies seem to be unstable, because any player can deviate without penalty from his equilibrium strategy even if he expects all other players to stick to theirs. This paper proposes a model under which most mixed-strategy equilibrium points have full stability. It is argued that for any game the players' uncertainty about the other players' exact payoffs can be modeled as a disturbed game *, i.e., as a game with small random fluctuations in the payoffs. Any equilibrium point in, whether it is in pure or in mixed strategies, can almost always be obtained as a limit of a pure-strategy equilibrium point in the corresponding disturbed game * when all disturbances go to zero. Accordingly, mixed-strategy equilibrium points are stable — even though the players may make no deliberate effort to use their pure strategies with the probability weights prescribed by their mixed equilibrium strategies — because the random fluctuations in their payoffs willmake them use their pure strategies approximately with the prescribed probabilities.

Robert J. Aumann
Adam Brandenburger

Sufficient conditions for Nash equilibrium in an 'n'-person game are given in terms of what the players know and believe - about the game, and about each other's rationality, actions, knowledge, and beliefs. Mixed strategies are treated not as conscious randomizations, but as conjectures, on the part of other players, as to what a player will do. Common knowledge plays a smaller role in characterizing Nash equilibrium than had been supposed. When 'n' = 2, mutual knowledge of the payoff functions, of rationality, and of the conjectures implies that the conjectures form a Nash equilibrium. When 'n [greater than or equal to] 3 and there is a common prior, mutual knowledge of the payoff functions and of rationality, and common knowledge of the conjectures, imply that the conjectures form a Nash equilibrium. Examples show the results to be tight. Copyright 1995 by The Econometric Society.

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Source: https://www.researchgate.net/publication/273757341_Strategic_Management_and_Strategic_Planning_Process

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