Strategic planning theory: An institutional perspective

The article elaborates on the essential elements of institutional theory of strategic planning (ITSP). This theory specifies the general institutional planning theory (IPT), previously presented by the authors. The differences between ITSP and other versions of IPT are described. As the analysis shows, most of current approaches either treat strategies as strategic plans or view strategy development as a stage of strategic planning. We suggest that the strategy development may even be an intuitive process, and methods of strategy development differ from the methods of strategic planning. From this perspective, we define strategic planning as a planning that is based on a previously developed strategy, the latter may be developed implicitly. Further, the authors apply this approach to the strategic planning in public organizations. Findings from the literature review show that planning in public organizations does not necessarily take into account spatial planning experience and differences in institutional environment among the countries. Strategic planning implementation success depends on interorganizational institutional environments. The strategy itself may become an important institution, once employees assume that they can benefit from the new relationships. Sensemaking and leadership can help in arriving at a strategic consensus. We argue that public sector reforms implemented according to the new public management philosophy have a negative impact on these processes.