Lack of Strategic Management in Companies

Lack of Strategic Management in companies leads to many problems. Some companies do not undertake strategic planning and management. Some other companies do strategic planning, but receive no support from managers and employees. In some other cases, managers and employees do not get enough support from the top management. A number of such and other reasons explain why certain companies do not take to strategic planning and management.
Researchers have mentioned various reasons for poor or no strategic planning and management by companies. These are discussed below:

Poor reward structure

When an organization achieves success, it often fails to reward its managers or planners. But when a failure occurs, the company may punish the managers concerned. In such a situation, it is better for individual managers to do nothing than to risk trying to achieve something, fail and be punished.

Content with success

If an organization is generally successful, the top management or individual managers may feel that there is no need to plan and strategize because everything is fine. However, they forget that success today does not guarantee success tomorrow.


As managers gain experience, they may rely less on formalized planning and more on individual initiative and decisions. But, this is not appropriate. Overconfidence or overestimating experience leads to complacency and ultimately can bring downfall. Forethought and planning are the right virtues and are signs of professionalism.


An organization may be so deeply engrossed in crisis management and firefighting that it may not have time to plan and strategize. This happens with many companies and is a clear sign of non-professionalization.

Waste of time

Some organizations view planning as a waste of time because no tangible marketable products are produced through planning. But they forget that time spent on planning is an investment, and there would be returns, both tangible and intangible, in due course.

Previous bad experience:

Honest difference of opinion

Some managers may sincerely think that a plan is not correct. They may see the situation from a different viewpoint, or, they may have aspirations for themselves or the organization, which are different from those envisaged in the plan. Different people in different jobs in the same organization may have different perceptions of the same situation, and this may lead to a difference of opinions among them and eventually to lack of planning due to lack of consensus.


When management has achieved status, privilege or self-esteem through effectively using an old system, it often sees a new plan or a new system as unnecessary or a threat.

Fear of the unknown

Managers may not be sure of their abilities to learn new skills or take on new roles or adapt to new system. This is basically inertia against change or fear for change.

Fear of failure

Whenever something new or different is attempted, there is a chance of success, but, there is also some risk of failure. Many companies and managers may like to avoid strategic planning and management for fear of failure.


Employees may not trust management, or, the management may not have enough confidence in the managers. This gives rise to mutual suspicion

Sarav Author

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