Strategic assumptions are the assumptions that are held by decision-makers when building a strategic plan. All strategic plans should be built upon a grounded, validated and accepted set of strategic assumptions. Any
strategic plan
Strategic planning is an organization's business process, process of defining its strategy or direction, and making decision making, decisions on allocating its resources to attain strategic goals.
It may also extend to control mechanisms for gu ...
or decision is only as good as the strategic assumptions upon which it is based. Strategic assumptions surface and are usually identified when
scenario planning
Scenario planning, scenario thinking, scenario analysis, scenario prediction and the scenario method all describe a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and gener ...
is undertaken during a
strategic planning process. The strategic assumptions surfacing and testing method (
SAST
South African Standard Time (SAST) is the time zone used by all of South Africa as well as Eswatini and Lesotho. The zone is two hours ahead of UTC ( UTC+02:00) and is the same as Central Africa Time. Daylight saving time is not observed in e ...
) is one rigorous method of identifying strategic assumptions.
Like other types of assumptions, strategic assumptions are the assumptions held by decision-makers about different types of factors and drivers of change that have influenced their thinking, decision-making or planning. Strategic assumptions may be assumptions about events that happened in the past, what is currently happening or what may happen in the future.
There are nine categories of strategic assumptions. These nine types are the assumptions being made about:
:
# macro-environmental forces (from a STEP or PEST analysis),
# the market dynamics (e.g. from an analysis of the Porter's Five Forces model),
# the needs of customers,
# the expectations and behaviours of other stakeholders,
# the availability and allocation of money,
# the organization's internal processes,
# the strengths and weaknesses of its assets,
# its workforce, and
# the "Background of Shared Obviousness", that is, the
groupthink
Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Cohesiveness, or the desire for cohesiveness ...
that exists within the organization around what the company is, what it is able to do and not able to do.
Strategic assumptions are the equivalent in strategic planning to financial assumptions when doing financial projections, economic assumptions when making economic forecasts and scientific assumptions when proposing new scientific models.
References
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Decision-making