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planning annually. Leaders use common tools to assess how the corporation
efficiency.
objectives. Any organization's mission statement clearly elucidates its purpose of existence.
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Through this, the organization projects a corporate image to the customers and provides
direction
objectives.
These are tangible and measurable targets the organization is aiming to achieve.
With these
measurable targets, the organization can monitor growth and make necessary
corrections.
2. Situation Analysis
After the establishment of objectives, the organization devises a plan to reach those
in
accordance to its current situation. The changes in the environment provide newer ways to
reach them. The organization conducts an environmental scan to assess available opportunities
and
external
technological aspects. Micro environment analysis is the study of the industry in which the
firm
analysis.
This is analyzing the strengths and weaknesses (internal environment analysis) and
formulated. Three generic strategies that are considered while formulating strategy
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are cost
leadership, differentiation and focus. Only one of the three should be used for any
product.
Then the formulated strategy is implemented. It is then translated into elaborate
policies
for everyone in the organization to understand. The functional areas for which
4. Control
The
Modifications are
implemented
strategies
are
continuously considered
and
appraised.
made from time to time to avoid deviations on the plan. The standards of
performance are set, performance is monitored and necessary action is taken to guarantee
success.
goal in an efficient and effective way. In fact, having a long term goal can serve to unite
employees and supervisors, because everyone is working towards a common purpose.
Focus
Creating a strategic business plan provides focus. One of the first steps of corporate
planning involves writing a mission statement. The mission statement clearly tells the rest
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of the world what the company does. Once a company has a mission statement, it can focus on
fulfilling
its task. For example, if a company's mission statement declares its purpose is to
tasks.
Better Decisions
By developing a plan, a company can make better business decisions. The business
plan
needs to spell out what choices will further the company's interest, such as what personnel
it
needs, and what equipment it requires. When the business knows what it needs to
accomplish to be successful, its leaders can steer it towards hiring the best possible people for
open positions,
opportunities.
A Measure of Success
Corporate planning also acts as a yardstick for a company. A company should
frequently
examine its progress in regards to its corporate plan. If the business has not met a
particular goal
on its strategic map, its executives must ask themselves what must be done
in order to get things back on track. The yardstick function of business planning works best when
companies build a
mechanism into the strategy which allows for change -- in case the company
direction.
Saving Money
Corporate planning has the additional benefit of saving companies money. Part of
creating a business strategy involves developing a budget. Budgeting allows businesses to
allocate their financial resources to the projects which need them most, while cutting out
unnecessary expenses. Budgets also eliminate confusion. With a budget, everyone knows
what
the company earns, what it spends, what it can afford, and what it cannot.
I. Strategic Plan
A strategic plan is a high-level overview of the entire business, its vision, objectives, and value.
This plan is the foundational basis of the organization and will dictate decisions in the long-term.
The scope of the plan can be two, three, five, or even ten years.
Managers at every level will turn to the strategic plan to guide their decisions. It will also influence
the culture within an organization and how it interacts with customers and the media. Thus, the
strategic plan must be forward looking, robust but flexible, with a keen focus on accommodating
future growth.
The crucial components of a strategic plan are:
1. Vision
Where does the organization want to be five years from now? How does it want to influence the
world?
These are some of the questions you must ask when you delineate your organizations vision. Its
okay if this vision is grandiose and idealistic. If there is any room to wax poetic within a plan, it is
here. Holding ambitions to make a dent in the Universe (Apple/Steve Jobs) is acceptable, as is a
more realistic vision to create the most customer-centric company on Earth (Amazon).
2. Mission
The mission statement is a more realistic overview of the companys aim and ambitions. Why does
the company exist? What does it aim to achieve through its existence? A clothing company might
want to bring high street fashion to the masses, while a non-profit might want to eradicate
polio.
3. Values
Inspire. Go above & beyond. Innovate. Exude passion. Stay humble. Make it fun
These arent fragments from a motivational speech, but Fab.coms values. Like Fab, each
organization has its own values. These values will guide managers and influence the kind of
employees you hire. There is no template to follow when jotting down the values. You can write a
1,000 page essay, or something as simple as Googles Dont be Evil its all up to you.
As you can see, there are really no rules to writing the perfect strategic plan. This is an open-ended,
living document that grows with the organization. You can write whatever you want in it, as long
as it dictates the future of your organization.
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Operational planning is the process of deciding, the most effective use of the resources already
allocated and to develop a control mechanism to assure effective implementation of the actions so
that organisational objectives are achieved.
These plans are to support strategic and tactical plans whenever some difficulty is faced in its
implementation. Any changes in internal organisation or external environment have to be met
through tactical plans.
The operational plan describes the day to day running of the company. The operational plan
charts out a roadmap to achieve the tactical goals within a realistic timeframe. This plan is highly
specific with an emphasis on short-term objectives. Increase sales to 150 units/day, or hire 50
new employees are both examples of operational plan objectives.
For examples, there is sudden change in prices of products, difficulty in procuring raw materials,
unexpected moves by competitors; tactical plans will help in meeting such unforeseen situations.
The success of tactical plan depends upon the speed and flexibility with which management acts to
meet sudden situation.
However, to fully understand operational plans, we should first look at the overall planning process
within a business. This diagram shows three levels of planning.
Type
Plan
Strategic
plan
Tactical
plan
of
Created By
Scope
Includes
Top
management
Entire organization
Mid-level
management
Operational Low-level
plan
management
Level of Detail
Specific actions
and ideas, but
not
very
detailed
within a division)
Let's summarize the characteristics of an operational plan. First, it assumes that upper management
has prepared both a strategic plan and a tactical plan. This means that lower management should
have a clear sense of what they are trying to achieve. They just have to come up with a detailed
plan to make it happen!
Second, the operational plan is limited to only one part of the organization. For example, a large
corporation (strategic plan) has a manufacturing division (tactical plan) that produces products A,
B and C. Each product is manufactured in a separate plant run by a plant manager who prepares a
separate operational plan.
Operational plans can be either single use, or ongoing, as described below:
1. Single Use Plans
These plans are created for events/activities with a single occurrence. These plans address only
the current period or a specific problem. This can be a one-time sales program, a marketing
campaign, a recruitment drive, etc. Single use plans tend to be highly specific.
An example would be a plan to cut costs during the next year.
2. Ongoing Plans
These plans can be used in multiple settings on an ongoing basis. These plans are carried forward
to future periods and are changed as necessary.
An example would be a long-term plan to retrain workers instead of layoffs.
Ongoing plans can be of different types, such as:
Policy: A policy is a general document that dictates how managers should approach a
problem. It influences decision making at the micro level. Specific plans on hiring
employees, terminating contractors, etc. are examples of policies.
Rule: Rules are specific regulations according to which an organization functions. The
rules are meant to be hard coded and should be enforced stringently. No smoking within
premises, or Employees must report by 9 a.m., are two examples of rules.
Ongoing plans are created on an ad-hoc basis but can be repeated and changed as
required.
This is where the macro meets the micro. Running a successful company requires paying
an equal attention to not just the broad objectives, but also how the objectives are being met on
an everyday basis, hence the need for such intricate planning.
Tactical vs. Strategic: An Alternative Definition
When most people think of the difference between something Tactical and something Strategic,
they often think along one of a few lines:
1) Tactical is short-term and Strategic is long-term, or
2) Tactical is small and Strategic is big, or
3) Tactical is kludgey and Strategic is high-quality
These definitions are generally useful and thats why they persist. But I think they lose one useful
quality that my alternative definition captures:
4) Tactical is something youre willing to change to meet local conditions and Strategic is
something you wont change to meet local conditions
This definition gets to the heart of the problem and it implies all kinds of good things: suddenly,
something Tactical can also be high-quality and something Strategic can take less than a day.
Lets take web services as an example. As technologists, its really easy to get distracted by shiny
things like Enterprise Service Buses and to get bogged down in arguments with each other about
REST vs. SOAP. But then were burning lots of energy on Tactics, and losing sight of what was
really the Strategy. The real Strategy is: connecting business processes together in a way that can
be orchestrated, re-mixed, and reconfigured relatively cheaply. If sending SOAP payloads over an
IBM Enterprise Service Bus with 128-bit encryption implements that Strategy best in your
organization, then use it. If calling well-defined stored procedures on one humongous SQL Server
database running under somebodys desk implements that Strategy best in your organization, then
do that. As long as youre realizing the Strategy, then who cares what your Tactics are (as long as
theyre legal and ethical, or course) as long as they work.
All too often, we find ourselves clinging too tightly to a failed Tactic instead of adapting to
conditions as we find them on the ground. During such times, what we really need to do it step
back, remind ourselves of what the original Strategy really was, and find a new Tactic (using what
we learned from its failed predecessor)
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To make it happen. Just because your first Tactic failed doesnt necessarily mean your Strategy is
unsound, it just means you need to find a new Tactic.
But if youre on your third or fourth failed Tactic for the same Strategy lets just say thats a whole
other ballgame.
Tactical Planning is Short range planning that emphasizes the current operations of various parts of
the organization.
Short Range is defined as a period of time extending about one year or less in the future.
Managers use tactical planning to outline what the various parts of the organization must do for
the organization to be successful at some point 1year or less into the future.
Tactical plans are usually developed in the areas of production, marketing, personnel, finance and
plant facilities.
COMPARING AND COORDINATING STRATEGIC & TACTICAL PLANNING:
Basic differences between strategic planning and tactical planning:
1.
Since upper managers generally have a better understanding of the organization as a whole
than lower level managers do, upper management generally develops the strategic plans and
because lower level managers generally have better understanding of the day to day organizational
operations, generally the lower level managers develop the tactical plans.
2.
Because Strategic Planning emphasizes analyzing the future and tactical planning
emphasizes analysing the everyday functioning of the organization,facts on which to base strategic
plans are usually more difficult to gather than are facts on which to base tactical plans.
3.
Because strategic plans are based primarily on a prediction of the future and tactical plans
on known circumstances that exist within the organization, strategic plans are generally less
detailed than tactical plans.
4.
Because strategic planning focuses on the long term and tactical planning on the short term,
strategic plans cover a relatively long period of time whereas tactical plans cover a relatively short
period of time.
Despite their differences, tactical and strategic planning are integrally related. Manager need both
tactical and strategic planning program, and these program must be closely related to be successful.
Tactical planning should focus on what to do in the short term to help the organization achieve the
long term objectives determined by strategic planning.
I.
The Company and its Environment
A. NATURE OF A COMPANYS ENVIRONMENT
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Technological Environment
Technological developments may increase or decrease the demand for some existing products
Examples:
Voltage stabilizers help increase in sale of electrical appliance in markets characterized by frequent
voltage fluctuations.
Introduction of televisions, refrigerators etc with in-built stabilizers affects the demand for voltage
stabilizers.
Economic Environment
Economic Environment refers to all forces which have an economic impact on Business.
The economic environment consists of the demand dynamics, supply situation, pricing
factors, degree of competitiveness, and impact of profitability. It includes the fiscal policy,
monetary policy and the taxation policy, the FDI norms, the investment criterion and
financing decisions. Economic environment includes:
Growth strategy
Industry
Agriculture
Infrastructure
Money and Capital Markets
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Inflation
Interest rates
Growth rates
Unemployment levels
Levels of disposable incomes
Whether the country is experiencing boom/recession
Examples:
Increasing disposable incomes would mean that people would have greater demand for products.
Therefore, firms would respond to such increasing incomes by expanding their businesses in such
areas.
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An increase in interest rates would mean increase in borrowing costs for both consumers and firms.
Therefore, investments would curtailed or postponed resulting in lower growth rates for the entire
economy.
.Socio-Cultural Environment
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2
A set of customs, beliefs, behaviors and practices that exists within a population.
Companies often include an examination of socio-cultural environment before entering
their target markets.
Demographic factors
Attitude of people
Social responsibilities
Religion
Taste and preference
Education
Family
Natural and technological factors
Income and lifestyle
Political environment
Political Environment refers to the influence exerted by the three political institutions ie.
legislature, executive and judiciary in shaping, directing, developing and controlling business
activities.
The constitution of a country
Political Organisation
Political Stability
Image of the country and its leaders
Foreign Policy
Laws governing business
Flexibility and adaptability of laws
The Judicial System
Political factors are the factors relating to policies and nature of the government. Some factors are:
-
Taxation policy
Regulatory framework
Governmental stability
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International Environment
The global environment refers to those factors which are relevant to business, such as the WTO
principles and agreements; other international conventions/ treaties / agreements / sentiments in
other countries etc. For eg hike in crude oil prices has a global impact etc.
World is becoming one market
Improving quality
Competition from MNCs
Capital and technology transfers
Deciding which markets to enter and what products to manufacture
Adjusting the management process
B. Tracking the changing environment
Adapting to Change in a Rapidly Changing Business Environment
Supervisors' job responsibilities are changing. As both individuals and members of an
organization's managerial team, supervisors need to prepare themselves to adapt successfully to a
rapidly changing business environment. This article presents a number of tips supervisors can use
to deal with change, to the betterment of their organization and their own careers. As a supervisor,
the primary measures you can take to adapt to change include:
becoming aware of your situation
understanding change
building your skills and knowledge
Become Aware of Your Current Situation
What is going on now in your job? If you don't know, you must take steps to find out! Relevant
questions to ask include:
What is the mission of your unit?
What is the purpose of your job?
What are your key responsibilities and assignments?
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they present with the attitude of a new employee and, as a new employee would, take on these
challenges enthusiastically and with a desire to learn all you can to perform well.
When you recognize the possibilities created by change, you're more prepared to exploit them. You
will find change as not something to fear, but as something to welcome and turn to your own
advantage.
Build Your Skills and Keep Learning
Adapting to change frequently requires the effective use of all your acquired skills. In some cases,
adapting to change will call for the use of other skills as wellskills which you might not yet have
mastered, or even begun to acquire! In a fast-changing work environment, skills also become
obsolete. To be prepared to deal with change successfully, it is important to build as many skills as
you can before their use becomes essential for organizational survival. You don't want to be caught
short in a crunch.
You can never stop learning if you want to maintain your value in the job marketplace. Nor can
you wait for your employer to send you to seminars or pay for additional education. You need to
take responsibility to educate yourself. Doing so will help you keep your skills current, and it will
demonstrate an initiative for self-improvement that makes you a more visible and viable candidate
for a promotion or new assignment.
You may also want to consider making lateral moves to learn new skills and become a wellrounded employee. Read trade magazines and attend conferences, when possible. Take refresher
training in your area of competence. Enroll in a college course that interests you, even one not
given for credit. See if your professional association offers training sessions and workshops. Look
into correspondence or distance education. If circumstances allow, pursue an advanced degree. If
college is not an option, broaden your reading and personal study. Join others with similar interests
to form a discussion group or study team. Read a technical manual or recent review of research in
an area of interest to you.
This is the one of the most important tips for adapting to change, because it places you ahead of the
curve: anticipating change and implementing it before many people think to adapt. It is important
to keep your learning skills fresh; learning how to learn is also too valuable a lesson to allow it to
atrophy over time. The bottom line is, the more you know how to do and the more current your
skills and your ability to apply them effectively, the more valuable you are to an organization.
Other Tips
Aside from these major efforts, you can also take smaller measures to ensure that you are
compatible with change and adapt easily to it:
Embrace Technology. Embrace technological change and learn how to use it for your own
benefit. Don't run from new technologies; try them! Some people are afraid to try new
technology for fear of looking foolish or old fashioned in front of othersparticularly
younger people who are more technologically adept. If you are uncomfortable with new
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technology, try it out in the privacy of your own home, or in the presence of trustworthy
friends and teachers.
Increase Your Speed. Greater opportunities come to organizations that can respond quickly.
Customers value speed in providing services and delivering orders and are sometimes
willing to pay extra for a quick response. Employees who are fast and flexible generally
reduce costs by minimizing their expended time on a project. As a supervisor, you need
to continuously review how you can reduce the time spent on work, either in increments
or in quantum leaps. Always look for breakthroughs, especially in information
technology, that will allow you to get more done faster and with fewer people.
Learn to Live with Ambiguity and Uncertainty. Most people do not like ambiguity or
uncertainty, which are major sources of anxiety, but they are also facts of life in this fastchanging world. Often you will have to make decisions without having all the facts you
need or knowing with any certainty what will happen. But, if you are willing to accept
ambiguity and uncertainty and not let them prevent you from trying new things, you
ultimately enhance your value to the organization. Learning to improvise and adapt to
different and unexpected situations will give you important skills that will help you
progress in your career.
Act like an Entrepreneur. Entrepreneurs are always concerned with doing their best and
getting the most out of their employees. Why? Entrepreneurs behave this way because
it's their company, their responsibility to keep customers satisfied, their reputation, and
their money. These factors provide them with powerful incentives to perform at a high
level. An entrepreneurial attitude can also serve supervisors and employees well. Having
an entrepreneurial attitude can provide you with the extra push to cut costs, improve
productivity, and go out of your way to keep customers satisfied. As change continues
and organizations begin to use more outside contractors, you may become one yourself.
An entrepreneurial attitude will help prepare you for that possibility.
Adding Value to the Organization. The organization should always be able to make a profit
on your work. If you add value, you bring in a return on your work that is higher than
your cost to the organization. If that is not the case, your job is in peril. This is especially
true today, when organizations are eagerly looking for ways to cut costs. Always ask
yourself whether your activities add value or add costs for the organization. When
someone asks what you are contributing, be able to provide specific examples of what
you do and the difference you are making.
Be a Fixer, Not a Blamer. In any organization, there will always be problems that arise from
changing circumstances. In noting these problems, some people get the reputation of
being complainers rather than problem solvers. Those who complain and blame are not
helping themselves or the organization. There are two difficulties with playing the blame
game.
Most problems are due to common causes, meaning no one person or event can be
identified as the cause.
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Treating these problems as though there were an identifiable cause gets in the way of
solving them.
To become a fixer, you should identify the source of the problem and suggest direct actions to deal
with it. The person who blames doesn't solve problems; the person who fixes does, and becomes a
valued member of an organization as a result.
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and
for identifying both the Opportunities open to you and the Threats you face. What makes SWOT
particularly powerful is that, with a little thought, it can help you uncover opportunities that you are
well placed to exploit. And by understanding the weaknesses of your business, you can manage and
eliminate threats that would otherwise catch you unawares. More than this, by looking at yourself
and your competitors using the SWOT framework, you can start to craft a strategy that helps you
distinguish yourself from your competitors, so that you can compete successfully in your market.
Strengths and weaknesses are often internal to your organization, while opportunities and threats
generally relate to external factors. For this reason the SWOT Analysis is sometimes called InternalExternal Analysis.
To help you to carry out a SWOT Analysis, write down answers to the
following questions.
Strengths
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
What is your organization's Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your
customers and people in your market. You should also be realistic. Also, if you're having any
difficulty with this, try writing down a list of your organization's characteristics. Some of these will
hopefully be strengths! When looking at your strengths, think about them in relation to your
competitors. For example, if all of your competitors provide high quality products, then a high
quality production process is not a strength in your organization's market, it's a necessity.
Weaknesses
What could you improve?
What should you avoid?
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Again, consider this from an internal and external basis: Do other people seem to perceive
weaknesses that you don't see? Are your competitors doing any better than you? It's best to be realistic
now, and face any unpleasant truths as soon as possible.
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Opportunities
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes, and so on.
Local events.
Threats
What obstacles do you face?
What are your competitors doing?
Are quality standards or specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
When looking at opportunities and threats, PEST Analysis can help
to ensure that you don't overlook external factors, such as new
government regulations, or technological changes in your industry.
Example SWOT
A start-up small consultancy business might draw up the following SWOT Analysis:
Strengths:
We are able to respond very quickly as we have no red tape, and no need for higher
management approval.
We are able to give really good customer care, as the current small amount of work means
we have plenty of time to devote to customers.
Our lead consultant has strong reputation in the market.
We can change direction quickly if we find that our marketing is not working.
We have low overheads, so we can offer good value to customers.
Weaknesses:
Our company has little market presence or reputation.
We have a small staff, with a shallow skills base in many areas.
We are vulnerable to vital staff being sick, and leaving.
Our cash flow will be unreliable in the early stages.
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Opportunities:
Our business sector is expanding, with many future opportunities for
success.
Local government wants to encourage local businesses.
Our competitors may be slow to adopt new technologies.
Threats:
Developments in technology may change this market beyond our ability to
adapt.
A small change in the focus of a large competitor might wipe out any market
position we achieve.
Reference:
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http://study.com/academy/lesson/what-are-operational-plans-for-a-businessdefinition-types-examples.html
http://www.yourarticlelibrary.com/planning/planning-types-corporateoperational-functional-and-proactive-planning/25637/
http://www.ehow.com/how-does_5233873_process-corporate-planning.html
http://www.ehow.com/about_7549046_importance-corporate-planning.html
http://smallbusiness.chron.com/differences-between-business-planning-corporate-planning-882.html
http://www.ehow.com/facts_5566059_meaning-corporate-planning.html
http://smallbusiness.chron.com/meaning-corporate-planning-60737.html
http://www.ehow.com/how-does_5233873_process-corporate-planning.html
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