Strategic planning involves strategy formulation and strategy implementation.

The success or the failure of both stages is subject to the human element involved in the relevant processes. Dynamic organizations appreciating the importance of human element in strategic decision making still encounter conflicting views between top and middle managers. Organizations that have realized the significance of keeping employees satisfied face a high probability of strategy implementation failure as a result of an inherent "unbalanced balance" driving the strategic decision making. This "unbalanced balance" is the result of the cognitive differences between the "thinkers" and the "doers".

Strategy formulation and strategy implementation are both dynamic, real-time processes necessitating consistent commitment as to perceive the competitive realities existing in the market. However, strategy formulation implies change and as such it involves a transition period required to absorb this change, whereas strategy implementation applies the change and as such it involves a transition period required to evaluate it. Moreover, it requires a strong strategic consensus not anymore as result of successful strategy formulation but as a prerequisite for successful strategy implementation.

By performing a hypothesis test we can see that there is a distinct difference between strategy formulation and strategy implementation and this explains why only ten percent of the crafted strategies are actually successful. In the corporate environment we may encounter strong strategic decisions followed by weak implementations or strong implementation plans based on weak strategic planning.
In particular:

1. Strategy formulation stage

Hypothesis 1: Top management are the "thinkers"
A general view regarding the involvement of top management in the decision-making process within an organization is that they think and decide on the strategy to be pursued. However, (a) the manager's value system - how strongly the manager feels that organizational efficiency is subject to the personal growth of subordinates and (b) the manager's confidence in his subordinates - how important the manager considers the knowledge and experience of subordinates in order to involve them in the decision making process are two forces affecting the strategic decision making which should be considered.

Hypothesis 2: Roles determine the perspectives.
Similar sets of facts are perceived differently

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