Corporate planning and implementation
Chapter 9
9.1 Corporate planning
Corporate plan: a plan containing details of a business’ central objectives and
strategies to achieve them
Corporate planning: the process used by companies to set long-term plans to meet
a certain objective, such as business growth and higher return on capital employed
Components of corporate plans
A typical corporate plan will include:
● The overall objectives of the
organisation to be achieved within a
time frame could be profit-target,
sales growth or market share target
related
● The strategy to be used to attempt to
meet the objectives
● The main objectives for the key
departments of the business are
derived from the overall objectives
● Once the strategies have been implemented, the results should be measured
and evaluated
● The results are then compared with the original objectives and help to
determine the corporate objectives for the next period (fig 9.1)
Potential benefits of corporate plans
● Senior managers have a clear focus and sense of purpose for what they are
trying to achieve
● The plan helps to communicate this sense of purpose and focus to all
managers, employees and other stakeholders
● The control and review process - the original objective can be compared with
the outcomes to see how well the business performance matched its aims
● Planning and preparing the corporate plans force the senior managers to
consider the organisation’s strengths and weaknesses in relation to the
business environment
Potential limitations of corporate plans
● Unexpected internal or external changes can ruin the business plan
, ● Part of the planning is considering how to respond to unforeseen events
● However, if the managers don't plan for external or internal changes during a
long-term plan, the inflexibility might become disastrous
● The corporate planning process should be as adaptable and flexible as
possible to allow corporate plans to continue to be relevant and useful during
periods of change
The main internal influences on a corporate plan
Financial resources: can the new proposed strategies be afforded?
Operating capacity: will this be sufficient if expansion plans are approved by the
director
Managerial skills and experience: might be a major constraint on the plan’s
success, especially if diversification is chosen (Ansoff Matrix)
Employee numbers and skills: workforce planning is a key factor in the success of
any corporate plan
Culture of the organisation
The main external influences on a corporate plan
Macroeconomic conditions: expansion may have to be put on hold during the
recession
The central bank and government economic policy changes
Likely technological changes: these could make the corporate plan outdated
Competitor’s actions: the competitive nature of the market
9.2 Corporate culture
Corporate culture: the values, attitudes and beliefs of the people working in an
organisation that affect the way they interact with each other, and with external
stakeholders
● “The way we do things around here” – how people within an organisation
make decisions and interact with each other, and with other stakeholders
● Different organisations have different cultures
● The culture of an organisation gives it a sense of identity
● Culture is based on the values, attitudes and beliefs of the people who work in
it - especially senior managers
● Values, attitudes and beliefs have a very powerful influence on the ways in
employees in a business act, take decisions and relate to others in the
organisations
● What people do and how they behave is largely determined by the culture
The main types of corporate culture
Power culture:
● A culture that concentrates power among just a few people
Chapter 9
9.1 Corporate planning
Corporate plan: a plan containing details of a business’ central objectives and
strategies to achieve them
Corporate planning: the process used by companies to set long-term plans to meet
a certain objective, such as business growth and higher return on capital employed
Components of corporate plans
A typical corporate plan will include:
● The overall objectives of the
organisation to be achieved within a
time frame could be profit-target,
sales growth or market share target
related
● The strategy to be used to attempt to
meet the objectives
● The main objectives for the key
departments of the business are
derived from the overall objectives
● Once the strategies have been implemented, the results should be measured
and evaluated
● The results are then compared with the original objectives and help to
determine the corporate objectives for the next period (fig 9.1)
Potential benefits of corporate plans
● Senior managers have a clear focus and sense of purpose for what they are
trying to achieve
● The plan helps to communicate this sense of purpose and focus to all
managers, employees and other stakeholders
● The control and review process - the original objective can be compared with
the outcomes to see how well the business performance matched its aims
● Planning and preparing the corporate plans force the senior managers to
consider the organisation’s strengths and weaknesses in relation to the
business environment
Potential limitations of corporate plans
● Unexpected internal or external changes can ruin the business plan
, ● Part of the planning is considering how to respond to unforeseen events
● However, if the managers don't plan for external or internal changes during a
long-term plan, the inflexibility might become disastrous
● The corporate planning process should be as adaptable and flexible as
possible to allow corporate plans to continue to be relevant and useful during
periods of change
The main internal influences on a corporate plan
Financial resources: can the new proposed strategies be afforded?
Operating capacity: will this be sufficient if expansion plans are approved by the
director
Managerial skills and experience: might be a major constraint on the plan’s
success, especially if diversification is chosen (Ansoff Matrix)
Employee numbers and skills: workforce planning is a key factor in the success of
any corporate plan
Culture of the organisation
The main external influences on a corporate plan
Macroeconomic conditions: expansion may have to be put on hold during the
recession
The central bank and government economic policy changes
Likely technological changes: these could make the corporate plan outdated
Competitor’s actions: the competitive nature of the market
9.2 Corporate culture
Corporate culture: the values, attitudes and beliefs of the people working in an
organisation that affect the way they interact with each other, and with external
stakeholders
● “The way we do things around here” – how people within an organisation
make decisions and interact with each other, and with other stakeholders
● Different organisations have different cultures
● The culture of an organisation gives it a sense of identity
● Culture is based on the values, attitudes and beliefs of the people who work in
it - especially senior managers
● Values, attitudes and beliefs have a very powerful influence on the ways in
employees in a business act, take decisions and relate to others in the
organisations
● What people do and how they behave is largely determined by the culture
The main types of corporate culture
Power culture:
● A culture that concentrates power among just a few people
