Page 13 - BA1 Integrated Workbook STUDENT 2018

The process of strategy formulation

2.5 Advantages of formal planning

Advantages include:

 identifies risks by forcing managers to look ahead

 ensures no strategic drift

 easier for the business to raise finance

 helpful for less skilled/experienced managers.

2.6 Drawbacks of formal strategic planning

Drawbacks include:

 too rigid – stifles innovation

 bounded rationality – key issues are missed

 time consuming, expensive and slow – a major problem in fast-
moving industries.

Illustrations and further practice

Now review Illustrations 1 to 4 and TYU 1 and 2 in Chapter 1 of the text.

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