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BUFE METHOD
Abstract
Purpose – The purpose of this paper are to introduce and develop the BUFE methods
or eight steps for designing the Strategic Planning
Design/methodology/approach – The two types of research variables are internal
and external environments. Internal environments including strengths and weaknesses
and external environments including opportunities and threats. The variables of
strengths consist of inbound logistics, operations, outbound logistics, marketing and
sales, service. The variables of weaknesses consist of firm infrastructure, human
resources management, technological development, and procurement. The external
environments consist of technology, demographic trends, economic trends, political
and legal environment, and socio-cultural environment. Participants were regulators,
providers or producers, researchers, and end users who concern with the renewable
energy. The method of analysis used qualitative approach. The qualitative approach
were interviewed twenty five participants. The interviews were recorded by audio-
visual or handy-cam.
Findings – The paper finds that, the qualitative approach arranged the eight steps for
designing the Strategic Planning are Vision, Missions, Objectives, Strategies, Policy,
Program, Budgets, and Procedures.
Practical implications – The findings of the study are useful for lecturers,
administrators, project managers, and practitioners easily.
Limitations - The findings of the study did not discuss about business ethics, and
values.
Original/value – The paper was a part of a dissertation resulting the eight steps for
designing the Strategic Planning.
1. Introduction
An interesting phenomena in Indonesia (in some provinces) in the middle of
the year 2005 was the longest queuing at the Gas Station (SPBU/Stasiun Pengisian
Bahan Bakar Umum). Some cars have waited for a half day, because there was not
enough fuel at the Gas Station. If there is any gasoline or diesel oil in the SPBU, the
1
fuel price increases very highly and the volume was very 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, Coconut
Palm/Cocos nucifera, African Oil Palm/Elaeis guineensis, cassava/manihot esculenta,
Zea mays L., Arenga pinnata, etc).
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. According to
the data from Centre Beaurau of Statistics (BPS/Badan Pusat Statistik), 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 critic area is only 10% can
obtain 10.3 million kiloliter of bio fuel every year.
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. 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 (a creating new jobs).
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 knowledge and skill of the people who live around the bio-
fuel oil factories.
6. The increasing revenues or tax for the regional government.
2
3
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 an alternative energy, the
Government will plan to mix diesel oil with 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 bio-diesel market (November 22, 2005), the
forming of the National Team to Bio-fuel Program, which is recognized by Al-Hilal
Hamdi, Director General of Oil and nature Gas (Tubagus Haryono) decree no.
3674K/24/DJM/2006 dated on March 17, 2006 about allowing the mixing gasoline
with 10% ethanol/alcohol, 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.
2. Literature Review
Strategic Planning
The function of management consist of planning, organizing, actuating, and
controlling (POAC). Strategic planning is a part of the planning function.
4
Figure 1 Strategic Management Process
Harold Koontz and Heinz Weihrich (Koontz, 1988: 62, 82) stated that the
strategic planning steps are Purposes or missions, Objectives, Strategies, Policies,
Procedures, Rules, Programs, and Budgets (Figure 3).
Bititci’s observation (Lee, 1998: 527, 531) stated that hoshin kanri (policy
deployment) is not a solution to all planning problems but a process which enables
managers to plan effectively and translate those plans into actions. And the steps for
designing strategic planning are vision, Business Objectives, Strategic goals, Critical
success factors, Critical task action plan, and Performance measure (Figure 4).
In other words, the writer defined the strategic planning steps as Vision, Missions,
Objectives, Strategies, Policy, Program, Budgets, and Procedures (Figure 6).
5
Figure 3 Hierarchy of plans
6
of firm infrastructure, human resources management, technological development,
and procurement.
The other approach for determine the external environment/variables using
Michael E Porter’s Value Chain Analysis (Hitt, 2005: 89) and the external
environments consist of technology, demographic trends, economic trends, political
and legal environment, and socio-cultural
cultural environment (Figure 5).
Figure
igure 5 Michael E Porter’s Value Chain Analysis
7
Figure 6. Factors that influenced the Strategy
Figure 7 presents the definition of every step in the eight steps designing the strategic
planning.
For the purpose of this discussion some of the steps will be taken separately.
8
Figure 6 The eight steps designing the strategic planning
9
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.
In another word, a vision is defined by realizing the impossible dreams in the future.
Step 2 - Mission
10
When properly constructed, a mission statement should provide a clear, concise
description of an organization’s overall purpose. A mission statement should answer
three questions (Thompson, 2003: 32):
1. Who we are?
2. What do we do?
3. Where we are now?
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.
11
Figure 9 The Mission statements
Step 3 - Goals/Objectives
12
2. A desirable direction in which we want to move (Dervitsiotis, 1981: 9).
3. The ends toward which activity is aimed (Koontz 1988: 62).
4. The end results of planned activity (Wheelen, 2004: 12).
The prerequisite of the objectives should be as specific as possible.
Figure 10 presents the objectives statement of National Renewable Energy Strategy.
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.
13
3. The decisions and actions that determine the long-run performance of an
organization (Robbins, 2009: 273).
4. The act of the general or plan the destruction of one’s enemies through
effective use resources (Calingo, 1997: 5).
5. The act of the general or a general leading an army (Calingo, 1997: 5).
6. Both proactive/planned (intended and deliberate) and reactive (adaptive)
(Thompson, 2001: 12).
7. Strategy is the skill in managing or planning (Feurer, 1995:11).
H Igor Ansoff (Kotler, 2009: 85) stated that the prerequisite of the strategy are
Market penetration, Product development, Market development, and Product
diversification.
14
5 - Policy
Policies also are plans in that they are general statements or understandings which
guide or channel thinking in decision making.
This alternative energy will create a new jobs. The government should
arrange the condusive rules, or give the tax holiday for the investors.
15
Figure 12 The policy statements
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.
The definition of the program is activities needed to accomplish the plan.
Figure 13 presents the program statements of National Renewable Energy Strategy.
Step 7 - Budgets
A budget is a statement of expected results expressed in numerical terms. It
may be referred to as a “numberized” program. In fact, the financial operating budget
is often called a “profit plan.” It may be expressed either in financial terms or in terms
of labor-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.
We can invite the foreign investors, but if we can use the local investors
is better than the first.
The definition of the budgets is the cost of programs or some budgets are also control
devices.
16
Figure 13 The program statements
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.
17
Figure 15 The Procedures statements
4. Conclusions
The eight steps designing the strategic planning are Vision, Missions, Objectives,
Strategies, Policy, Program, Budgets, and Procedures.
Implications
There are two implications of the research are theoretical implications and
practical implications.
Theoretical implications
The research findings is the steps for designing the strategic planning are
Vision, Purposes or missions, Objectives, Strategies, Policies, Programs, Budgets,
and Procedures. This finding will improve the statements of the past researchers -
Harold Koontz and Heinz Weihrich (Koontz, 1988: 62, 82) stated that the hierarchy
of the plans are Purposes or missions, Objectives, Strategies, Policies, Procedures,
Rules, Programs, and Budgets. This finding is supported by the Bititci’s observation
(Lee, 1998: 527, 531) stated that hoshin kanri (policy deployment) is not a solution
to all planning problems but a process which enables managers to plan effectively and
translate those plans into actions. And the steps for designing strategic planning are
vision, Business Objectives, Strategic goals, Critical success factors, Critical task
action plan, and Performance measure. The findings provided the statements of
Thomas L Wheelen and J David Hunger (Wheelen, 2004: 9-10) stated that Strategic
Management Process consist of four basic elements: Environmental scanning,
strategy formulation (missions, Objectives, Strategies, Policies), Strategy
implementation (Programs, Budgets, and Procedures), and Evaluation and Control
(Performance). Environmental scanning is the monitoring, evaluating, and
disseminating fo information from the external and internal environments to the key
people within the corporation.
Practical Implications
The findings of the study are useful for lecturers, administrators, project
managers, and practitioners easily.
Limitations
The findings of the study did not discuss about business ethics, and values.
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