Strategic planning is utilized by many international firms across various industries even though research demonstrates that it may have benefits only in specific occasions. Companies are seeking to improve the performance effect of strategic planning. The article by Flores et al. 2008 examines this question by examining strategic planning in the context of Huber’s definition of organizational learning, where knowledge absorbed by any of the units of the organization that it recognizes as useful. As a result, organization may differ in their learning processes since information gathering and processing may be different as well. Therefore, learning perspectives may influence why only some firms benefit from formal strategic planning. The results of the study demonstrate that firms with moderate levels of learning can reap benefits while high levels of learning in a company fail to do so.
At a broad level, this indicates organization can selectively choose when to learn and plan. Firms that seek to utilize both strategic planning and organizational learning may have to cycle through alternating periods of learning and planning to ensure at least some parts function below the optimal threshold. On the other hand, organizations may maximize learning through planning by using them to guide activities and operations. The key takeaway is that strategic planning can be effective for various companies and industries, but few experience optimal performance results because they are unaware of the relation between organizational learning and strategic planning.
There are no unique frameworks from the article. However, it utilizes Huber’s framework of organizational learning and adapts it to the research regarding strategic planning. The definition states, “an organization learns if any of its units acquires knowledge that it recognizes as potentially useful to the organization.” Since formal strategic planning emphasizes a systematic acquisition of information or knowledge, the information is distributed and stored for future use to different parts of the organization. Formal strategic planning seeks to conserve and retrieve lessons of experience.
The outcomes of this article have some implications for managerial practice. Executive managers that are attempting to increase performance from formal strategic planning must ensure organizations have moderate levels of learning. Therefore, firms that seek to improve performance based on current competencies should focus on planning, while those organizations attempting to boost performance through learning, should minimize amounts of formal planning. From a managerial perspective, the availability of this information can be key in making strategic decisions for the company in terms of organizational learning and strategic planning. It requires a balanced approach to maintain moderate levels of learning in order to achieve the optimal performance from its units.
My personal research focuses on performance effects of organizational learning in the context of a digital transformation in UAE’s government entities. Change for organizations, particularly broad and inefficient as public entities is difficult and requires significant organizational learning to ensure employee performance and technology adoption. However, at the same time, the organizations must consider strategic goals of modernization and digitalization of government infrastructure and operations. This article can be directly helpful in applications of strategic planning and organizational learning in broad aspects, balancing the involved variables. Properly alternating planning and learning for UAE public entities is vital to ensure efficiency in achieving set objectives of the digital transformation in terms of time, resources, and financial outcomes.