Strategic planning and environmental judgements : the performance in SBU organized industrial groups

Abstract: Formal Strategic Planning, FSP, has become an instrument to find long-term directions under profitability constraints in industrial companies. This instrument is used to decentralize decisions and more effectively adapt to unstable environments. FSP must, however, to some extent be adjusted to unique situations of single organizational units. Such adaptation implies that anti-planning biases could be avoided and that premises for efficient FSP become more favorable. Furthermore, if FSP is seen as a way to orient units towards unstable environments, then it is necessary to know how planning actors judge their environments in FSP. When this is clear to a satisfactory degree, it is easier to concentrate on crucial matters.This doctoral thesis presents a model of outline of main FSP activities, diagnoses and formulations, and planning styles in organizational units. If the applied motivational type is adapted to needs for FSP in the various phases of implementation, FSP can be utilized as an effective instrument to guide strategically A model is also presented for general managers uncertainty in judging the environment. In order to deal with uncertainty, time horizons for judgements ought to be adapted to the uncertainty in each sector of the environment. Relatively short horizons generally ought to be applied to the business climate sector and relatively long horizons to established competitors.The performance in industrial groups, which are organized according to Strategic Business Units, SBU's, is accentuated. In longitudinal in-depth studies of the Swedish international groups ASEA, Ericsson and Gunnebo, primarily qualitative data have been used to obtain a holistic perspective of FSP. A complementary cross-sectional study has been carried out in the ASEA Group. Multi-variate analysis has been applied to quantitative data.