Time: The hidden dimension in strategic planning

Long Range Planning, Vol. 24, No. 3, pp. 49 to 57, 1991 Printed in Great Britain

0024-X1301 /91 S3.00 + .OO Pcrgamon Press plc

Time: The Hidden Dimension Strategic Planning

49

in

T. K. Das

Recent research indicates that business executives differ in their orientation toward the future, and that these orientations are associated with individual preferences for different corporate planning horizons. However, very little is known about the process of setting planning horizons and its interrelationship with the setting of corporate objectives. Such conditions thus call for a study of the temporal aspects of strategic management. Toward that end, this article discusses (a) the role of individual future orientations of corporate executives in setting planning horizons, (b) the case for considering planning horizons as a means in the traditional goal-means complex, and (c) the idea of planning horizons as unacknowledged negotiating currency in the politics of strategic decision making.

Planning has to do with the future. However, different concepts of ‘the future’ have not been critically examined in the planning literature, either by practitioners or academics. Consider the following typical situation in business. Executives A and B are debating the most realistic revenue expansion targets for their company in the next 5 years. Executive A believes that, given his assessment of the company should plan for an the future, expansion of S500m over the 5-year period. Executive B, however, based on her best business judgement, is convinced that a more realistic plan for the same period would be to aim at a more conservative expansion level of S200m. Off hand, one may be tempted to characterize the difference in plan recommendations in terms of the relative aggressiveness or risk-taking propensities of the two executives. Consider, though, the probability that one of them, say Executive B, has the innate ability to ‘see’ farther into the future and a better ‘grasp’ of the flow of future time. Psychological research has shown that individuals differ in their extent of future orientation (just as people differ in T. K. Das is Associate Professor of Strategic Management in the School of Business and Public Administration, Baruch College, City University of New York.

intelligence, risk propensity, optimism, self-confidence, conceptual ability, and so on). Using the concept of goal-direction, Elliott Jaques has described the temporal horizon of an individual as ‘the longest forward planned task in his active present, the farthest forward that he is looking at that In our example, we would have to moment’.’ seriously consider whether the recommendations of the two executives differ in their intrinsic worth on account of how well each of them can ‘visualize’ the future. Executive A, for the sake of argument, has a near-future orientation, and lacks any subjective sense of the 5-year span of the future. He is thus basing his recommendation mainly on an extrapolation of a relatively short future, without of course being conscious of his own limitation in apprcciating the future dimension. On the other hand, Executive B is endowed with a distant-future orientation, and can visualize better the dynamism and evolution of an undulating future With less compulsion to resort to extrapolation of a limited future time-spread, Executive B may see more problems and less opportunities for expansion. Having a better understanding of the future time dimension, her assessment of realistic targets is intrinsically more valuable than that of her compatriot. Thus, the jirture orientations of decision makers have a crucial role in the planning enterprise. The prevailing approach toward the idea of the future, however, is that it is something which is the same for all those involved in planning. In particular, it is implicitly assumed that all exccutivcs engaged in planning have the same undiffcrcntiatcd ability to ‘grasp’ the future. More importantly, there is hardly any awareness in either planning literature or planning practice about the impact that individual abilities in conceiving the future have on the intrinsic value of the planning function. Specifically, we need to acknowlcdgc that long range planning, without a special insight into the future, is tantamount to a mere extrapolation of the past and the prcscnt.

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The article begins with a discussion about why we need to understand how individual executives conceive of the future, how that conception plays a significant role in determining the nature and quality of the planning function, and how the existing planning literature deals with the notion of the future. Later on, the article deals with the most significant practical implication of acknowledging the role of differing individual future orientations in the planning enterprise, namely, the hitherto unexamined complexities in the choice of planning horizons.

Time-The

Hidden Dimension

However, despite such findings, temporal orientations have received hardly any recognition in the strategic planning literature.2 And yet time can in certain ways be considered as more fundamental than space. The primacy of the time dimension has been widely supported. However, time continues to retain its status as the ‘hidden dimension’ of strategic planning. As Ewing3 observed almost two decades ago :

1. Different Aspect

concepts of time

In part at least, this would explain the relative neglect of the temporal dimension as a subject of serious investigation in the area of strategic planning. Specifically, the literature does not seem to reflect an adequate appreciation of the critical role that strategic planners as individuals have in terms of their subjective knowledge of the temporal dimension.’

Different

The performance of a business organization, in consequence of the implementation of a strategic plan, is universally seen against the backdrop of the passage of time. The plan gives a sense of direction to an organization as it continues in time. The strategic planning process is clearly embedded in the phenomenon of time-flow. How an executive views this temporal dimension thus assumes particular importance in strategic planning. It has been found that individuals differ in their visualizations of the future time dimension, in terms of the relative cognitive dominance of near-term future and distant future.

Table

The utterly essential dimension of planning is time. Yet time is the one dimension of planning that ncvcr gets discussed. It is treated as if it wcrc a constant that everyone understands.

Ideas of Time

The strategic planning literature has many different usages and meanings of time. It would be instructive to briefly discuss the typical ways in which the time dimension has been conceived in the strategy literature. As points of departure for our discussion, we will use the three representative examples given in Table 1. (A) Fast Cycle Capability The most widely prevalent view of time is that of clock-time or calendar-time. This conception of time, which is also called physical time, is evident in all discussions of time management. Here, the objective is to become efficient in terms of utilizing whatever time is available. Time flows in a linear fashion and in one direction.” Item (A) in Table 1 illustrates the assumption of time having the nature of the clock or the calendar. The emphasis, though, is not on personal time management, but on organizational functioning as a whole. The goal is to speed up all organizational processes. ‘Producing more faster is the order of the day. Emphasizing the

of time Description

Meaning

of time

of time

(A)

Fast cycle capability

‘Today, executives in more and more large, complex businesses are achieving sustained competitive advantage by making radical changes in how they manage time within their companies. These companies make decisions faster, develop new products earlier, and convert customer orders into deliveries sooner than their competitors’ 5

Clock-time

or calendar-time

(B)

Planning

‘With regard to the temporal dimension, three aspects are of relevance to strategic planning. These three aspects are span or duration, frequency and horizon’6

Clock-time

or calendar-time

(C)

Future vision

‘By making explicit the dimension of time the CM (Creative Management) model allows the renewal function to be seen as a learning process. The time dimension . is not the objective time of physics but subjective time, views of the future and memories of the past as seen from the perpetual “now” in which all human cognitive systems function .”

Psychological

horizon

time

Time:

The Hidden

importance of time is one key. . . . Merck and CO. races its new drugs into production by using multipurpose modular facilities consisting of flexible units that can be rapidly altered to meet changing requirements.’ 9 In this conception, all organizational decision makers (who are enjoined to better manage the product development cycle) are presumed to share the view that time flows linearly and at the same pace (clock-time). This view of time is clearly the most pervasive one in the literature. Consider this excerpt from a contemporary paper: ‘Cutting-edge Japanese companies today are capitalizing on time as a critical source of competitive advantage: shortening the planning loop in the product development cycle and trimming process time in the factory-managing time the way most companies manage costs, quality, or inventory.’ ‘” We shall presently argue for a more problematic view of time. Especially when the notion of future time becomes central, as in strategic planning, understanding the time dimension assumes fundamental importance.

(B) Planning Horizon Item (B) in Table 1 relates to horizons or periods or lengths of time for purposes of planning. While recognizing explicitly the importance of the temporal dimension in strategic planning processes, the author employs only the calendar view of time. He discusses, in the paper cited, the relative merits of annual, triennial, and quinquennial frequencies in incremental and synoptic formal planning exercises.

(C) Future Vision The conception of time in item (C) in Table 1 comes closest to recognizing the role of psychological time of organizational members. While discussing the four strategic archetypes of Miles and Snow,” the authors have observed, for instance, that ‘truly prospecting organizations have dominant coalitions which search for new ways of doing business and continually use visions of possible futures, ideas about new and different ways of doing business, to feed forward into present behaviour and actions.‘” While the notion of strategic actors having ‘visions of possible futures’ is mentioned, we should note that the crucial point that coalition members may differ in individual capabilities to envision the future is not recognized. In other words, the futurevisioning capabilities are considered the same for all members, and hence non-problematic. This approach is evident in other writings on the idea of the future in strategy. For example, Tregoe and his colleagues’3 have observed: ‘We have never met a senior manager whose mind was a blank slate when it came to strategic thinking. . . . But without a clearly articulated strategy, what is “there” in the heads of key people may represent different, even conflicting visions of the future. Differences in experience, judgment, values, functional responsibility, and the like provide different launching pads

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to the future and different interpretations of what should be.’ Here again, we note that while individual differences concerning non-temporal factors are mentioned as impacting on ‘visions of the future’, there is no recognition of the pre-existing individual differences in the psychological conceptions of the future. Our focus in this paper is that it matters profoundly what value one places on ‘visions of possible futures’ supplied by strategic actor A in comparison with those of another strategic actor B. Referring back to the example we used at the beginning of the paper, if A’s capabilities in grasping the future are very limited in scope, and B’s are comparatively cxtensivc, then the organization would do well to discriminate between the proposals put forward by A and B. A seemingly brilliant proposal by A is patently misconceived as it is based on a very truncated view of the future. In contrast, strategic actor B could be relied upon to base herself on a more comprehensive and enveloping appreciation of the future time dimension. In summary, while Hurst et al. acknowledge the role of subjective time, they do not actually incorporate the fundamental characteristic of that subjectivity in their model. When an extended future is at issue, as in strategic planning, this individual subjectivity in temporality assumes critical significance. It is not difficult to see the potential relevance of the future orientations of corporate executives in strategic planning. To take a specific example, an executive who is subjectively oriented to a distant future could be expected to prefer a longer planning period for an organization than an executive whose dominant orientation is the near-term future. Taking a broad conception of organizational politics, one could say that by virtue of the various preferences that individual decision makers have about planning horizons, there is at play a certain ‘silent politics of time’ among the executives concerned, which involves the implicit negotiation of planning-period choices and adjustments. It follows that individual differences in future time orientations would lead to a range of preferences of planning horizons, and that organizational consensus in this regard is not a pre-existing condition. It is evident that the notion of a temporal horizon is significant in determining the effectiveness of organizational functioning. While we are concerncd with the temporal horizons of organizations, it is important to recognize that the organizational temporal horizon is constituted collectively by all the individual executives. The process of strategic planning is after all one in which thcrc is an aggregation of many strategic actors. This provides the rationale for discussing individual time oricntations of executives. It is the strategy making executives, through their perspective on the future time dimension, who eventually help constitute the specific temporal horizon of the organization.

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Setting Planning Horizons The subject of planning horizons is usually treated peripherally in most texts on strategic management. In terms of research it has garnered even less attention. The literature has generally failed to appreciate the critical role of planning horizons in the strategic planning process. This has resulted in a lack of understanding about the process of setting planning horizons, a process which is intimately related to the setting of planning objectives. The neglect of the role of horizon setting can be seen in three important areas.

(1) The

role of individual executives in horizon setting has not been examined in the literature. One specific area deserving attention is that of future orientations of corporate executives.

(2) There

is very little discussion of the process of setting planning horizons, in stark contrast with discussions on the determination of planning objectives and goal setting. Planning horizons have been conceived in exclusively mechanistic terms, and are usually considered as more or less fixed in most organizations.‘4 This is especially curious, because a dynamic process view is routinely adopted when planning objectives are considered.

(3) The

interdependence of planning horizons and planning objectives has not been explicitly recognized in strategic planning research.

This lack of adequate attention to planning horizons as a topic of research could be ascribed to a failure to recognize the part played by the time perspectives of individual executives. There has been very little recognition of the fact that strategic planning is housed within the temporal dimension of the executives who create it. In the following sections we shall discuss certain critical, but neglected, aspects of planning horizons. The underlying concept is the temporal orientation of corporate executives in the largely unexamined process of horizon setting. The next two sections deal with planning horizon choices and the role of individual future orientations in horizon setting. These are followed by an argument for considering planning horizons as the means component in the conventional goal-means trade-off matrix. The subsequent discussion turns to what is termed ‘the arising from silent politics of time’, a phenomenon individual executives ‘using’ their temporal oricntations as negotiating chips in strategic decision making.

Choosing

however, of a problematic nature, vitally impacting on organizational effectiveness and the choice of an appropriate organizational form. Taylor and Hawkins” have emphasized the issue in the following manner: A significant part of every strategy is the time horizon on which it is based. In choosing an appropriate time horizon, we must pay careful attention to the goals being pursued, and to the particular organization involved. Goals must be established far enough in advance to allow the organization to adjust to them. Organizations, like ships, cannot be ‘spun on a dime’. . . The time horizon is also important because of its impact on the selection of policies. The greater the time horizon, the greater the range in choice of tactics.

Goodman” has approached the notion organizational time horizon as follows:

of

an

A crude definition of organizational time horizon can be teased out of the question, ‘How far into the future does an organization look before taking conscious action?’ The existential pressure placed upon actions by perceived futures can be thought of as a basic construct and then time horizon can be defined as the distance into the future which leads to significant management action.

The research of Lawrence and Lorsch” and Lorsch and Morse” indicates that time orientation of unit members in effective organizations is consistent with the time-span of the feedback that the organizational unit receives from the environment. Also, the pioneering work of Elliott Jaques” has shown how the felt weight of responsibility on the part of an organizational member is related to the maximum period of time for which discretion is required to be exercised in carrying out the assigned duties. Planning horizons are ordinarily determined at a few specific years in most organizations, and tend to stay unchanged. For example, a survey among banks having long-range planning systems revealed that a 4-5-year planning horizon was by far the most common.“’ In practical terms, though, perhaps because of increasing business turbulence, a shorter planning horizon of around 3 years appears to be more prevalent.” The planning horizon may be defined as the period of time for which the plan is developed. ‘The rationale of a given horizon is that the time span should be long enough to permit planning for expected growth and for change in strategy, and yet be short enough to make reasonably detailed plans to Goodman,23 ‘For most possible.’ 22 According organizations callsforpositive service.’

there is a time horizon action, all longerplans

which consciously receiving only lip

a Planning Horizon

The notion of a time horizon is the basis for what constitutes the planning period or planning horizon of a business organization. The determination of how long the planning horizon might be is,

Future Orientations Horizons

and Planning

The essential nature of time horizons

has been aptly

Time: described by Taschdjian:” ‘A horizon is a boundary which moves back as we move toward it. A time horizon is a bourzdary which separates the -foreseeable from the unforeseeable future.’ This idea of a receding boundary has been adopted by Elliott Jaques in a slightly different manner, using the concept of goaldirection. As we noted earlier, he describes the temporal horizon of an individual as ‘the longest forward planned task in his active present, the farthest forward that he is looking at that moment’.‘” The time horizon is thus associated with a conscious intention about engaging in some type of activity which lies in the future.2h However, it is not an imaginary or blank kind of future, but one which contains the anticipated activities or events.” The nature of that future changes as time passes, as the present moves along, and the individual in that present is also carried along. Ever-newer pcrceptions of that ever-receding future, in which reside the anticipated events and activities, define the character of the temporal horizon. The idea of looking into or ‘grasping’ the future is central to the determination of an appropriate planning horizon. The relevant notion is that of futurity. According to Drucker:‘* To say ‘long-range’ or ‘short-range’ planning implies that a given time span defines the planning; and this is actually how businesses look at it when they speak of a ‘five-year plan’ or a ‘ten-year plan’. But the essence ofplanning is ta make present decisions with knowledge oftheirfuturity. It is thefirturity that determines the time span, and not vice versa.

The idea of futurity is related to individual judgement or perspectives about the future. All individuals unavoidably have some perspective about the future. Fortunately, this very future perspective brings to the risk-taking strategic dccisions something supplementary to mundane continuations of the past and the present. Herein lies the relevance and utility of the concept of future orientations of executives. However, the role of individual future orientation of executives has traditionally been ignored in understanding the process of determining appropriate planning horizons. The futurity aspect is attended to solely in mechanistic and quantitative terms. The criteria for determining planning horizons mostly comprise the expected interest rate (expectations beyond a certain period being meaningless and hence zero), nature of different organizational goals, size and growth rate of an organization, forecasting validity, life cycle of product, payback period, lead-time between planning and actualization, and accounting period.29 The mechanistic character of these approaches, coupled with non-recognition of the subjective future orientations of strategic planners, has probably led to extrapolatory practices in long range planning. Note, for instance, the following observa-

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tions by Bower”” based on his field research in a corporate division : ‘While all business plans provide estimates of a variety of quantitative measures for 5 years, often they are no more than mechanical extrapolations of a more or less arbitrarily assumed growth rate.’ The phcnomcnon of unthinking extrapolation in corporations, such as the one cited above, is rarely assimilated into strategic planning research. Some refreshingly insightful observations, though, have been made by Trcgoc and Zimmerman.” Based on their expcricncc of strategy making in over 200 major organizations all over the world, they underscored the csscntially cxtrapolatory and short-range nature of the actual practice of long range planning : Long-range plans tend to be based on projections of current operations into the future. . . Long-range plans are built up from the lowest levels, where information exists to make projections. The comment of one chief executive immersed in the planning cycle is typical: ‘By the time WC get through with our long-range planning cycle, we are all so engrossed in the precision of our projections that we have lost our ability to question whether they are taking us where we want to go.’ Long-range planning is really more shortrange than anyone cares to admit.

These observations, of course, relate to organizations in the round. We should remember that the exercise of corporate planning is informed with a considerable amount of individual subjectivity through the agency of the strategic planners. Thus the fact that the strategic planners may have intrinsic predilections about future time dimensions would imply that not all people arc predisposed toward, say, a l-year or a 5-year planning horizon. In a study involving 207 upper-level one of the largest U.S. commercial found that those with a ‘distant’future

executives of banks, it was

time orientation tended to prefer longer planning horizons.‘” The reverse was true of the executives with a ‘near’future orientation, who preferred shorter planning horizons (see Figure 1).

This was true irrespective of the hierarchical level or corporate titles of the executives, from Executive Vice Presidents to Assistant Vice Presidents. A second important study addressed the tcmporai concerns of business from a diffcrcnt standpoint.” The sample comprised 37 chief executive officers of small to medium size high technology companies. The research was concerned with the testing of hypothesized relationships between the temporal perspectives of the CEOs and the different phases of the strategic attention process. Time perspective was derived from the manner in which the subjects perceived personal events in time. Strategic attention was denoted by the way in which the executives scanned the external environment for cues relating to opportunities and threats. The study empirically demonstrated several linkages between the temporal perspective of the CEOs and their strategic attention. For instance, it was found that CEOs

with longerfuture

horizons

used more impersonal

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Preferred F ming Horizon Short

C $ (D z 0

9 3

‘; I.!_

Near Future

I I Distant Future

I I

Figure

1. Future

orie

Most Executives with Near-future Orientation ‘Prefer’ Short Planning Horizons

Near-future Orientation ‘Prefer’ Long Planning Horizons

Few Executives with Distant-Future Orientation ‘Prefe? Short Planning Horizons

Most Executives with Near-future Orientation ‘Prefer’ Long Planning Horizons

:ations and planning

horizon

strategic information sources (such as trade journals, conferences, etc.) than those with shorterfuture horizons.

In general, it seems from these research studies that a certain heightened sense of the future time dimension on the part of the executive is needed in order that current decisions do not become mere projections ofpresent knowledge into an unknown future.

Time

as a Resource

The interdependency of goals and means in the sphere of decision making is critical, as has been argued by Simon. 3’ In this section we shall explore how planning horizons can be visualized as the ‘means’ component in the conventional goal-means matrix. To the extent that a planning horizon indicates a certain period or slice of time, it would be illuminating to examine the manner in which the notion of time is customarily employed in metaphorical expressions. Lakoff and Johnson” have discussed the metaphorical concept of ‘time is money’. Some of the metaphorical expressions they mention are : ‘I don’t have the time to give you’, ‘How do you spend your time these days?‘, ‘You need to budget your time’, and ‘You do not use your time pro$tably.’ They suggest that the practice of conceptualizing time in terms of money, a limited resource, and a valuable commodity, is a product of Western culture, and is not universally followed. Time in our culture is a valuable commodity. It is a limited resource that we use to accomplish our goals. . Corrcsponding to the fact that we arr as if time is a valuable commodity-a limited resource, even money-we conceive oftime that way. Thus we understand and experience time as the kind of thing that can be spent, wasted, budgeted, invested wisely or poorly, saved, or squandered.”

The resource-related metaphorical expressions concerning time are evidently reflections ofhow people conceive of and use time. They use time as a meaqs to attain desired goals.

choices

It may be useful here to draw an analogy between time and money as different forms of organizational resources. We know that money can be converted into various forms of resources or means. We need to appreciate that the time horizon can also be treated as a resource in the strategic planning context. If the analogy makes sense, as discussed below, an organization can effectively convert the length of the time horizon into other forms of resources or means. Indeed, in discussing the cutting-edge source of competitive advantage, Stalk” has observed that ‘as a strategic weapon, time is the equivalent of money, productivity, quality, even innovation’. In other words, like money, time can bc considcrcd an exchangeable resource in the attainment of strategic objectives. Let us begin by understanding the essence of money resources in the planning context. It is clear that one can decide to allocate an extra amount of financial rcsourccs or economize on them in order to reach an organizational objcctivc. This kind of approach is routinely found, for instance, in project rcsourcc allocation problems. The trade-off is between project duration and project cost, so that short completion times arc bought by proportionately high rcsourcc commitments. In much the same way, an organization can plan to attain an objective at a slower or faster pact by selecting the appropriate time period or planning horizon. In the high-velocity microcomputer industry, for example, it is necessary to make speedy decisions. In a recent paper, Eisenhardt”” has shown that fast decisions makers USC more information (that is, higher resource commitment) than the slow decision makers. Clearly, such interdependence between planning objectives and planning horizons needs to be considered in any strategic decision making. When, for instance, a longer planning horizon is selected for a it is equivalent to employing particular objective, ‘cheaper’ temporal means. The economizing of the

Time: temporal resource, implicit in the more relaxed pace of activity, suggests that the surplus could be converted into financial savings. On the other hand, the choice of a shorter planning horizon for the same planning objective would connote a costlier temporal means or more of this resource. This is cquivalcnt to saying that additional financial commitments would be needed. Thus, the planning horizon could be considered as a means to attain objectives. The means in the form of planning period could also be understood as a convertible resource like money. It needs to be emphasized that the attainment of a consensus on means (or planning horizons) is as important as on goals (or planning objectives). Indeed, research has shown that a consensus on planning horizons is relatively more difficult to attain, and thus becomes more critical than a consensus on planning objectives.3’ The study of planning horizons as a means should help in better understanding the dynamics of horizon setting in the overall process of strategic management.

The Silent Politics of Time We noted earlier that planning horizons considered appropriate by different executives varied significantly according to individual future orientations. The natural inclination of executives would thercfore be to try and influence decisions so as to ensure more desirable planning horizons in terms of their individual temporal orientations. Thus, the executives probably ‘use’ their planning horizon preferences as a means (discussed above) in their strategy negotiations much as any other means, such as resources like money, power and effort. In corporate decision making, the role of convcntional resources (like financial allocations) in the negotiation process is well understood. The meaning of alternative planning objectives is clearly comprehended in terms of financial resource units. Negotiation of planning objectives is easily carried on through the bargaining of such resource units, the metric of which is universally comprehended. Stated otherwise, these resources are the exchange currency or medium of negotiations for deciding upon the planning objectives. This has been the conventional reading ofthe decision making process in organizations, remembering only that the financial resource alluded to above is a proxy for all other ‘known’ forms of negotiating chips that form part of a complex decision environment. An important implication is that the process of negotiation among executives may involve a kind of bargaining chip that is not explicitly understood by the participants, namely, the individual future orientation. The temporal factor is evidently at play in the decision making process, but not quite within the awareness of the participants. Yet, as has been

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Planning

evident throughout this discussion, the temporal perspective appears to have a definite relationship with certain facets of the strategic planning process. It seems reasonable therefore to recognize that the executives do function with due regard to their temporal compulsions, although the precise dynamics of these compulsions are unclear at this stage. Unbeknown to them, the executives in effect bring to bear their temporal perspective on the decision making process. They thus use a currency of which only some of them are at best semi-aware. The bargaining, meanwhile, is comprehended only within the partial universe of explicitly understood negotiating currency, like financial rcsourcc units. The subtle play of the temporal factor remains unrecognized, but nevertheless potent. One could well call this phenomenon ‘the silent politics of time’. As explained elsewhere:“’ Even while (the executives)

are seeking a consensus on mutually acceptable planning objectives along with appropriate implementation periods, they are also, in actuality, silently involved in a tussle of innate preferences for long and short planning periods. They are adjusting the planning objectives to conform to these temporal preferences, but without any clear awareness of it. In the ordinary course, executives are conscious only ofconventional trade-off units like financial resources while engaged in decision making about planning objectives. The critical, if subtle, part played by subjective temporal compulsions goes unnoticed.

Because strategic planning is intrinsically concerned with the temporal dimension, it makes all the more sense to attempt a fuller understanding of the roles-subtle and almost wholly ncglcctcd today-that the future orientations of exccutivcs can and do play in the organizational scheme of things. The dynamics of this silent politics of time needs to be cxplorcd and incorporated into the broader study of the strategic planning process.

Expanding Frame

the Executive’s

Time

This article has attcmptcd to establish the significance of individual future orientations of decision makers in the strategic planning process. It has noted that the literature needs to move from the inappropriatc, clock-time conception of the future to the psychological or subjective tirne. Even the rather omnibus idea of strategic vision, for instance, does not take into consideration the critical concept of time pcrspcctive. In psychology, cvcry individual has a characteristic time perspective. It is prcdominantly either the past, prcscnt, or future. In particular, it was noted that individuals differ in their oricntation to the future. Empirical research insights were noted which established that individual business executives differ in their future orientations; some of them can be categorized as the near-future type, and others the distant-future type. The significance

of executives’

attitudes

to time for

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strategic planning is easily appreciated. The length of time spread out before a planning executive varies. The future dimension, in terms of subjective time, differs from person to person. Hence, when a particular executive formulates a plan, the plan is inevitably conditioned by the specific subjective future of that executive. Another executive, also formulating a plan for the same purpose, would accomplish it on the basis of a different subjective idea of the future. The fact that the future time period is expressed in terms of the conventional physical or calendar time, does not speak to the psychological time which forms the vehicle for the activity of planning. What constitutes the future would be likely to be different as between the two executives. Of much more significance, though, is the fact that the relative worth of the two planning efforts cannot be evaluated without a sense of what the future looked like in the subjective perceptions of the two executives who formulated the plans. Furthermore, it stands to reason that the intrinsic worth of a long range plan may be severely limited if it is the formulation of an executive whose subjective conception of the future is comparatively restricted. Fpllowing up on this discussion about the importance of future orientations of individuals engaged in planning, the article proposed the thesis that planning horizons should be included in strategic analyses in tandem with planning objectives. The two are interrelated in the manner of a goal-means trade-off matrix. Such an integration would be necessary to gain a comprehensive understanding of the strategic management process. It would also help bring to the fore the largely unacknowledged politics of temporal preferences, which have thus far remained hidden within the rubric of planning horizons. Moreover, a process view of the setting of planning horizons would accommodate the significant role of individual temporal orientations of executives. The paper has discussed some aspects of the interaction of planning objectives and planning horizons in terms of the future orientations of Arguments were also executives. corporate advanced for considering planning horizons as a means and as the currency of temporal politics. It has been noted that in recent times a more flexible approach is being taken about planning horizons. This is partly because there is a growing realization that much of the historical practice of long range planning was essentially extrapolatory in nature. The need to invest time and energy in thinking about the future thus becomes even more serious than before. Indeed, planning horizon decisions are assuming increasing importance in these turbulent times. Also, as has been argued here, planning horizons are a potent, albeit unrecognized, means of negotiating corporate objectives. The potential for choosing horizon is clear. The relevant

a wrong planning point is not that the

planning horizon in a particular company happens to be 5 years or 1 year, whether for reasons of unquestioned tradition or general indifference. The appropriateness of the planning horizon is dependent on the temporal orientation of the executives. Executives with a more distant future orientation tend to prefer longer planning horizons. It would only be logical to inquire whether future orientation can be fostered among business executives. This question needs to be researched. Meanwhile, it is important not to fall into the trap of mere extrapolation without any substantive grasp of the future. An extension of the planning time horizon may not necessarily imply a gain in future orientation in real terms.J’ A longer planning time horizon would be a hollow development if it were not based firmly upon an improved subjective ‘grasp’ of the future. Suggestions for encouraging more longer term thinking in business executives have usually taken very tangible forms, such as a modification of the executive compensation system to include pcrformante criteria on long-term corporate objectives. Another method used by Shell and other companics is to provide the top managcmcnt with better information about environmental changes in the form of scenarios. Research into possible methods of extending the future perspective of corporate executives is clearly needed to enable organizations to apply the knowledge for planning purposes.” In summary, it is necessary to recognize the critical role of individual temporal orientations in strategic planning. Especially in the practical world of business, there needs to bc an awarcncss of the interdependence of planning objectives and planning horizons. This should be supplcmcntcd by a recognition of the potent, though subtle, role that the future orientations of cxecutivcs play in conditioning planning horizon choices. In terms of research, there is very little cvidcncc of efforts to understand how managers think about the future. Efforts arc also needed for developing an awareness of the importance of time in other arcas of managcmcnt.“’ It is hoped that this paper helps business executives to become more aware of their own perception of time and the views of their associates in conjunction with the corporate planning process.

References (1)

Elliott Jaques, York (1982).

(2)

See, for a recent example, Spyros G. Makridakis, Forecasting, Planning, and Strafegy for the 27st Century, Free Press, New York (1990).

(3)

David W. Ewing, The time dimension, in David W. Ewing (Ed.), Long Range Planning for Management, 3rd Edn, p. 439, Harper & Row. New York (1972).

The Form of Time, p. 135,

Crane,

Russak,

New

57

Time: The Hidden Dimension in Strategic Planning (4)

T. K. Das. The Subjective Side of Strategy Making: Future Orientations and Perceptions of Executives, Praeger. New York

(1986). The book sets out in greater detail some of the initial thinking and empirical findings which provided the basis for this article. (5)

Joseph L. Bower and Thomas M. Hout, Fast-cycle capability for competitive power, Harvard Business Review, p. 110, November/December (1988).

(23)

Goodman, op. cit., p. 215.

(24)

E. Taschdjian, Time horizon: the moving boundary, Behavioraf Science, 22, 41 (1977).

(25)

Elliott Jaques, The Form of Time, p. 135.

Psychologyof

(26)

Paul Fraisse, The

(27)

Thomas J. Conle, Perceiving tion with Men and Women,

(6)

(7)

(8)

(9)

John C. Camillus, Reconciling logical incrementalism and synoptic formalism-an integrated approach to designing strategic planning processes, Strategic Management Journal, 3. 280 (1982). David K. Hurst, James C. Rush and Roderick E. White, Top management teams and organizational renewal, Strategic Management Journal, 10, 89-90 (1989).

(11)

Yoram Friedman and Eli Segev, Horizons for strategic planning, Long Range Planning,

(36)

Joseph L. Bower, Managing Study of Corporate

Planning

87 (1976). the Resource Allocation Process:A and Investment, pp. 46-47, Divi-

sion of Research, Graduate School of Business Administration, Harvard University, Boston, MA (1970).

Das, op. cit.

Translating

p. 189, Free Press,

(33)

Omar A. El Sawy, Temporal Pespective and Managerial Attention: A Study of Chief Executive Strategic Behavior, unpublished doctoral dissertation, Stanford University (1983).

Innovative

Strategies

into Action,

George Stalk, Jr, Time-the next source of competitive advantage, Harvard Business Review, p. 41, July/August (1988). Raymond

E. Miles Structure,

and and

Benjamin B. Tregoe, John W. Zimmerman, Ronald A. Smith and Peter M. Tobia, Vision in Action: Putting a Winning Strategy to Work, p. 36, Simon and Schuster, New York (1989). George A. Steiner, Top Management Macmillan, New York (1969).

Planning,

pp. 21-25,

Bernard Taylor and Kevin Hawkins (Eds), A Handbook Planning, Longman, London (1972).

of

Strategic

Richard Alan Goodman, Environmental knowledge and organizational time horizon: some functions and dysfunctions, Human Relations, 26, 215-216 (1973). Paul R. Lawrence Environment:

and Jay W.

Managing

Lorsch, Organization

Differentiation

and Integration,

and

Har-

(34)

Jay W. Lorsch and John J. Morse, Organizations and their Contingency Approach, Harper, New York (1974).

(19)

Elliott Jaques, Taking time seriously in evaluating jobs, Harvard Business Review, September/October (1979).

(26)

Richard W. Sapp, Banks look ahead: a survey of bank planning, The Magazine of Bank Administration, 56 (7). 33-40 (1980).

(21)

Das, op. cit.

(22)

Sapp, op. cit., p. 35.

Herbert A. Simon, Administrative

of Deci-

sion- Making

3rd Edn,

Behavior: A Study Processes in Administrative Organization.

Free Press, New York (1976). (35)

George Lakoff and Mark Johnson, Metaphors University of Chicago Press, Chicago (1980).

(36)

Ibid..

(37)

Stalk, Jr, op. cit., p. 41

(38)

Kathleen M. Eisenhardt, Making fast strategic decisions in highvelocity environments, Academy of Management Journal, 32, 543-576 (1989).

(39)

T. K. Das, Planning objectives and planning horizons: differences in perceived consensus, Southern management Association Proceedings, pp. 345-347, Orlando, FL (1985).

(46)

T. K. Das, Strategic planning and individual temporal orientation, Strategic Management Journal, 8, 208 (1987).

(41)

T. K. Das, Future orientations of decision makers and the reality of strategic thinking, in Howard F. Didsbury, Jr (Ed.), Chaflenges and Opportunities: From Now to 2001. pp. 40-43. World Future Society, Bethesda, MD (1986).

(42)

T. K. Das, How to make American business more future-oriented. Presentation at the Sixth General Assembly of the World Future Society, Washington, DC (1989).

(43)

There is some evidence of increasing attention to the temporal aspects of manaqement. See, for instance, Allen Bluedorn and Robert B. Denhardt, Time and organizations, Journal of Management, 14 (2). 299-320 (1988); and T. K. Das, The Time Dimension: An Interdisciplinary Guide, Praeger, New York (1990).

vard University Press, Cambridge, MA (1967).

Members:A

Benjamin B. Tregoe and John W. Zimmerman, Top Management What it is and How to make it Work, pp. 23-25, Simon and Schuster, New York (1980).

Strategy:

Charles C. Snow, Organizational Process, McGraw-Hill, New York

(13)

(18)

9 (5).

(32)

Hurst et a/., op. cit., p. 96.

(17)

(29)

Plus: Five Steps to

(12)

(16)

Peter F. Drucker, Long-range planning means risk-taking, in David R. Ewing (Ed.), p. 13.

James F. Bandrowski, Corporate Imagination

(1978).

(15)

(28)

(31)

Strategy,

(14)

lnvestiga-

Wiley, New York (1976).

Readers interested in the subject of temporal orientations across cultures may refer to James M. Jones, Cultural differences in temporal perspectives: instrumental and expressive behaviors in time, in Joseph E. McGrath (Ed.), The Social Psychology of Time: New Perspectives. pp. 21-38, Sage, Newbury Park, CA (1988).

New York (1990). (10)

Time, Harper, New York (1963).

Time: A Psychological

We Live By,

p. 8.