On (informal) planning – what is planning?

At the EURAM conference the past week I attended a presentation (Alanen & Rönkkö, 2011) which discussed the role of formal and informal strategic planning in organizations. The notion of informal planning garnered my attention – what does it mean? – and I reflect about it here. It seems to me that we need to first define planning.

Based on the classics of planning and management (e.g. Taylor, 1911) as well as on conventional wisdom, one can say that planning broadly means intendedly thinking about how to act in the future. That is, to ex-ante determine the actions we will later carry out and when we will carry them out (i.e. scheduling or programming). This is what we do in our calendars or agendas. Of course, organizational planning usually also entails the pre-allocation of resources and particularly the establishment of a budget, that is, the money we will spend in undertaking the planned actions and from where we will obtain these financial resources.

Formal planning in organizations mainly refers to both project scheduling and budget elaboration, which can be carried out by an individual alone or by a group of individuals at different units and levels of decision-making which are then ultimately aggregated by an individual at the top of the budgeting and/or project management function.

Formal strategic planning further refers to the determination of the organizational strategy and goals (e.g. Ketokivi & Castañer, 2004). Again, the formal strategic planning process can be undertaken by a single individual or involve multiple actors, also at different levels of the organization (e.g. Ketokivi & Castañer, 2004; Vancil & Lorange, 1975; Wooldridge & Floyd, 1990). However, formality refers to a pre-established (programmed or scheduled) series of meetings in which different organizational actors are invited to participate in order to formulate the plan and that the resulting strategy and goals will be written down in a document likely to be communicated to other actors at least in a succint version. 

Thus, what does informal planning mean? In opposition to the two features of formal planning mentioned above, informal planning must refer to processes in which planning does not:

a. consist in scheduled meetings and/or

b. result in a written document where the strategy, goals, schedule and budget are established. 

It makes sense to talk about informal planning meetings, i.e. unscheduled conversations about the organizational plan in meetings which were not planned for that purpose or in causal encounters among organizational members whether face to face (in the premises of the organization or outside) or virtual. However, when planning does not result in a written document (about strategy and goals, a budget or a project schedule) and remains in the head of an actor or a set of actors, it is indeed very hard to verify the existence of such plan, as retrospective rationalization might easily happen (e.g. Huber & Power, 1985; Golden, 1992).

That said, informal planning seems to be confused with the notion of emergent strategy, which refers to retrospective rationalization of actions (e.g. Mintzberg & Waters, 1982; Mintzberg & McHugh, 1985).

Alanen, L. & Rönkkö, M. 2011. Formal and informatl strategic planning in growth ventures. EURAM conference program, page 52.

Golden BR. 1992. The past is the past- or is it? The use of retrospective accounts as indicators of past strategy. Academy of Management Journal 35: 848-860.

Huber GP, Power DJ. 1985. Retrospective reports of strategic levels managers: guidelines for increasing their accuracy. Strategic Management Journal 6: 171-180.

Ketokivi M, Castañer X. 2004. Strategic planning as an integrative device. Administrative Science Quarterly, 49, 337-365.

Mintzberg H, Waters JA. 1982. Tracking strategy in an entrepreneurial firm. Academy of Management Journal 25(3): 465-449.

Mintzberg H, McHugh A. 1985. Strategy formation in an adhocracy. Administrative Science Quarterly 30: 160-197.

Taylor F. 1911. The principles of scientific management. Harper Bros, New York.

Wooldridge B, Floyd S. 1990. The strategy process, middle management involvement and organizational performance. Strategic Management Journal, 11: 231-241.