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Abstract
Purpose – The purpose of this paper is to introduce the eight (8) steps designing the
Strategic Planning and to consider how to design the National (Indonesia) Renewable
Energy Strategic Planning that have not been published or designed.
Design/methodology/approach – Using the informants of 35 people from four different
countries, there are from the Republic Democratic of Timor Leste (there are eight
people, three ministers, one producer, and four users), Malaysia (one informant who is
the Dean of Faculty Mechanical Engineering-University of Technology of Malaysia),
German (one informant who is the Director of RDTL GTZ) and Indonesia (26 people,
there are one minister, three ex ministers, one board of committee of the Bank Danamon,
five producers, eight researchers, and the rest are users). The eight (8) steps designing the
Strategic Planning are Vision, Missions, Objectives, Strategies, Policy, Program,
Budgets, and Procedures. The method of analysis is Qualitative approach.
Findings – The paper finds that, practitioners can design the corporate strategic planning
using the eight (8) steps designing the Strategic Planning easily.
Practical implications – The findings of the study are useful for administrators, project
managers, and practitioners.
Limitations - The findings of the study do not discuss the business ethics, values, and the
external and internal factors.
Original/value – The paper is a part of the dissertation resulting the eight (8) steps
designing the Strategic Planning or is a part of the continuing study by the author
(Bambang Sugiyono Agus Purwono) on the strategic planning.
Introduction
The interesting phenomena in Indonesia (in some provinces) in the middle of the year
2005 is the longest queuing of the public transportation and private cars in the SPBU
(Public Gas Station). Some cars have to wait for queued fueling the gasoline or diesel oil
for a half day, because there is not enough fuel in the SPBU. If there is any gasoline or
diesel oil in the SPBU, the fuel price increases very highly and the volume is very
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limited. The problem solution is to substitute the fossil fuel or non- renewable energy
(the gasoline and diesel oil) with the non-fossil oil or bio-fuel or alternative energy or
renewable energy (e.g. Straight Jatropha Curcas Oil/SJC Oil, Cassava, Algae, sugar cane
residual, etc).
The background of this paper is the decreasing of the deposit of the fossil fuel (the crude
oil and diesel oil), the increasing price of the crude oil and diesel oil, the increasing need
for the crude oil and diesel oil, the need for the alternative energy or renewable energy,
creating the jobs for new workers in the agricultural and rural areas, concerning with the
pollution because content of the exhaust gas or the emission of the exhaust gas from the
public transportation system and private cars, and the publishing of the National Energy
Policy of The Republic Of Indonesia and The Availability of Bio-fuel Act in January 25,
2006.
The SJC plants specialist from ITB, Manurung, R, described that 1 Ha of SJC plant can
produce about 4.3 tons of oil per year or can be obtained about 4.7 kiloliter of bio-fuel
per year. Remembering that the SJC plant can grow in the dry areas and Indonesia has
extensive dry areas, so castor planting is expected to give an excess for the society.
Besides, the planting SJC plants for bio-diesel supply is also good for increasing the
productivity of the dry areas and later can increase the land owner’s income. This dry
area exploitation also will not affect the food supply, because it never happens in such an
area to cause compete between food plant and SJC plant. According to the data from
BPS, in 2003 the critical area in Indonesia is up to 22 million Ha. Based on the estimation
of Manurung, R, above, the planting of SJC plant in the critical area only 10% we can
obtain 10.3 million kiloliter of bio diesel every year.
After the realization and distribution of the bio-fuel or bio-energy, the government and
the people will receive:
1. The reduction of the operating cost in industries, because the price of the bio-fuel
is lower compared to gasoline and diesel oil.
2. The fishermen will be able to fish and sail their boats (fueling the bio-diesel oil)
which will allow them to produce for the domestic and export commodities.
3. The involvement of the people who live around the bio-fuel factories as workers
(create new jobs).
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4. The reducing of the operating cost of the factories, because the bio-fuel price is
lower than the gasoline and diesel oil.
5. The increasing of the knowledge and skill of the people who live around the bio-
fuel oil factories.
6. The increasing of the regional income or tax for the regional government.
Government Commitment
There are many of the Government commitments such as the Presidential Regulation No.
5 (2006), about National Energy Policy, the Presidential Directive No. 1 (2006), about
supplying and exploiting of Bio-fuel as another (alternative) fuel, the Government is
planning to mix diesel oil with SJC oil or bio-diesel up to 10% in 2010, PT Pertamina’s
target to change 400.000 kiloliter of diesel oil with bio-fuel from SJC oil in three years
and later will be marketed through more than 200 gas Station in Jakarta, Surabaya and
Denpasar (Hanung Budya, Vice Director of Commercial of PT Pertamina, Ltd), LoC
(Letter of Commitment) between Eco-Securities with 11 Indonesian companies to
guarantee SJC oil market (November 22, 2005), the forming of the National Team to Bio-
fuel Program, which is recognized by Al-Hilal Alhamdi, Director General of Oil and
nature Gas decree no. 3674K/24/DJM/2006 dated on March 17, 2006 about allowing the
mixing gasoline with 10% ethanol, and the Government has determined SNI 04-7182-
2006, that is standard for substitution of fuel of diesel motor (B10). With these Letters, it
means the using of B10 and E10 can be used legally by the society.
Hitt, MA (2005: 7) stated that the strategy is an integrated and coordinated set of
commitments and actions designed to exploit core competencies and gain a competitive
advantage. Koontz, H and Heinz Weihrich (1988: 58) stated that Strategic Planning can
be used as a set of concepts or statements that integrates the organizations’ goals,
policies, and action in order to fulfill the organizations’ future mission. Strategic planning
can help the organizations to achieve their long-term objectives. Strategic planning is the
systematic identification of opportunities and threats that lie in the future. Strategic
planning can build expected future trends, data, and assumptions. Strategic planning is
much more action oriented than long range planning. And the Strategic planning will
improve the company performance.
In this paper the writer will discuss the eight (8) steps that anyone can design their own
strategic planning using these eight (8) steps designing the strategic planning. The eight
(8) steps are:
1. Vision,
2. Missions,
3. Objectives,
4. Strategies,
5. Policy,
6. Program,
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7. Budgets, and
8. Procedures.
Figure 1 presents the eight (8) steps designing the strategic planning.
Figure 2 presents the definition of every step in the eight (8) steps designing the strategic
planning.
For the purpose of this discussion some of the steps will be taken separately.
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The eight (8) Step discussion
Step 1 - Vision
A vision is a statement about what the organization wants to become. All members of the
organization should be able to identify themselves with it and it should help them to feel
proud, excited, and be part of something that is much bigger than themselves. A vision
should stretch the organization’s capabilities and image of itself. It gives shape and
direction to the organization’s future.
Vision ranges in length from a couple of words to several pages, the shortest is, the
easiest to remember. Effective vision statements are clear, concise, catchy, and
memorable.
• It is clear,
• It is challenging,
• It can be, and
• It must be.
Step 2 - Mission
1. What do we do?
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2. How do we do it?
3. For whom do we do it?
The mission can enable large groups of individuals to work in a unified direction toward
a common cause. A good mission statement is compelling, passionate, and energizing. It
should be risky and challenging, but also achievable.
1. Market oriented,
2. Realistic,
3. Specific,
4. Market environment,
5. Distinctive competencies, and
6. Motivating.
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Figure 3 presents the mission of National Renewable Energy Strategy.
Step 3 - Goals/Objectives
Mission and vision, although frequently short statements, are broad, encompassing and
far-reaching. They can often seem overwhelming and perhaps even impossible to
achieve. Goals and objectives create the bite size pieces, the road map and manageable
stepping stones to achieve the mission, make the vision a reality, and navigate the course
we have set for our business, or for ourselves.
Goals are the bigger fuzzy things and objectives are the SMART:
• Specific,
• Measurable,
• Attainable (accountable),
• Rewarding (realistic), and
• Timed (timeliness).
To be effective goals and objectives they must be written. If they aren’t written they’re
merely ideas with no real power or conviction behind them. Written goals and objectives
provide motivation to achieve them and can then be used as reminder to you and others.
Clearly and specifically written, they also eliminate confusion and misunderstanding.
As time goes on and goals are achieved, or conditions and situations change, it’s
important to reevaluate and establish new goals and objectives. Failure to periodically set
new or more challenging goals can lead to stagnation in the business and boredom among
employees.
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The key objectives ingredients are:
Step 4 - Strategy
For years the military used the word “strategies” to mean grand plans made in the light of
what is believed and adversary might or might not do. While the term “strategies” still
usually has a competitive implication, managers increasingly use it to reflect broad areas
of an enterprise operation.
Three definitions are indicative of the most common usages of the term strategies are
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2. the program of objectives of an organization and their changes, resources used to
attain these objectives, and policies governing the acquisition, use, and disposition
of these resources; and
3. the determination of the basic long-term objectives of an enterprise and the
adoption of courses of action and allocation of resources necessary to achieve
these goals.
1. Market penetration,
2. Product development,
3. Market development, and
4. Product diversification.
Step 5 - Policy
Policies also are plans in that they are general statements or understandings which guide
or channel thinking in decision making. Not all policies are “statement”; they are often
merely implied from the actions of managers (Figure 6).
Policies define an area within which a decision is to be made and ensure that the decision
will be consistent with, and contribute to, an objective or is a broad guideline for decision
making that links the formulation of strategy with its implementation. Policies help
decide issues before they become problems, make it unnecessary to analyze the same
situation every time it come up, and unify other plans, thus permitting managers to
delegate authority and still maintain control over what their sub-ordinates do.
Step 6 - Program
Program are a complex of goals, policies, procedures, task assignments, steps to be taken,
resources to be employed, and other elements necessary to carry out a given course of
action; they are ordinarily supported by budgets (Figure 7).
Step 7 - Budgets
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hours, unit of product, machine-hours, or any other numerically measurable term. It may
deal with operations, as the expense budget does; it may reflect capital outlays, as the
capital expenditures budget does; or it may show cash flow, as the cash budget does.
The definition of the budgets is the cost of programs or some budgets are also control
devices (Figure 8).
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Figure 7 The Program statements
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Step 8 - Procedures
Procedures are plans that establish a required method of handling future activities. They
are guides to action, rather than to thinking, and they detail the exact manner in which
certain activities must be accomplished. They are chronological sequences of required
actions.
The definition of the procedures is sequence of steps needed to do the job (Figure 9).
Conclusions
The eight steps designing the strategic planning are Vision, Missions, Objectives,
Strategies, Policy, Program, Budgets, and Procedures.
The eight steps designing the strategic planning is a part of the strategic management
process. It helps to create a corporate strategic planning by administrators, project
managers, and practitioners easily.
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