Corporate Planning

And Strategy

Prepared by:
Alexis Jeremie D. Turente
John Brix M. Regio
 How do you
see yourself
ten years from
now?
 PLANNING
Planning is an important aspect of the firm’s
operations because it provides road maps for
guiding, coordinating, and controlling the firm’s
actions to achieve its objectives (Gitman & Zutter,
2012).

Management planning is about setting the

goals of the organization and identifying ways
on how to achieve them (Borja& Cayanan,
2015).
 Characteristics of an Effective Plan
•Specific – target a specific area for improvement.
•Measurable – quantify or at least suggest an indicator of
progress.
•Assignable - specify who will do it.
• Realistic – state what results can realistically be
achieved, given available resources.
• Time-related – specify when the result(s) can be
achieved.
Long term goals set the direction of the company.

Short term goals are the specific steps or actions that

will ultimately reach the company’s long term goals.
Key Planning Questions:
What is Corporate Planning?
 Corporate Planning

It is a total system of planning which involves the determination of

the objectives for the company as a whole and for each department of
the it; formulation of strategies for the attainment of these objectives
(all this being done against the background of SWOT analysis);
conversion of strategies into tactical plans (or operational plans);
implementation of tactical plans and a review of the progress of tactical
plans against the corporate planning objectives.

Planning is the process of thinking about the activities required to

achieve a desired goal. It is the first and foremost activity to achieve
desired results. It involves the creation and maintenance of a plan, such as
psychological aspects that require conceptual skills. There are even a
couple of tests to measure someone’s capability of planning well. As such,
planning is a fundamental property of intelligent behavior. An important
further meaning, often just called "planning" is the legal context of
permitted building developments.
David Hussey (Corporate Planning: Theory and
Practice) defines corporate planning as:

“Corporate planning includes the setting of

objectives, organizing the work, people and
systems to enable those objectives to be
achieved, motivating through the planning
process and through the plans, measuring
performance and so controlling progress of the
plans and developing people through better
decision-making, clearer objectives, more
involvement, and awareness of progress.”
 Process of
Corporate Planning
Step 1.Environmental Analysis and Diagnosis

The first steps (which is, in fact, the background step), involved in
corporate planning is environmental analysis and diagnosis. (A detailed
account of this step is attempted subsequently, in the discussion about
corporate planning).

Step 2. Determination of Objectives

All planning starts with a determination of the objectives for the plan;
and corporate planning is no exception to this generality. In corporate
planning, after environmental analysis and diagnosis, the planners
determine objectives for the company as a whole and for each department
of it; which become the beginning point of corporate planning.

All objectives of corporate planning must represent an integrated or

coordinated system of objectives. In order to make corporate planning a
realistic approach to attaining objectives; objective setting for corporate
planning is done in the light of environmental analysis and diagnosis.
Step 3. Strategy Formulation

Strategy formulation is the core aspect of corporate planning. Strategy is, in

fact, the weapon of the planner devised for attaining objectives of corporate
planning. It is easier to set objectives; it is difficult to realize them. Strategies
facilitate the attainment of objectives.

 Step 4. Development of Tactical Plans

Strategies are translated into action plans called tactical plans or operational
plans. Tactical plans are necessary for implementation of strategies leading to the
attainment of corporate planning objectives. For example, if the strategy of a
company is to develop the skills and talents of manpower for realizing objectives;
then designing of suitable training programmes would amount to making tactical
plans.
Corporate planning and strategy formulation have a long-term perspective;
while tactical plans have a short-term perspective, as the latter are to be
implemented immediately, in the usual course of organisational life.
Step 5. Implementation of Tactical Plans

Mere paper planning is no planning; unless and until it is put into

practice. As such, tactical plans are put into a process of
implementation, just at the right time, as decided by management.
For implementation purposes, necessary communications are made to
the operating staffing; who are also provided with necessary facilities
to implement the tactical plans.

Step 6. Follow-Up-Action

After the tactical plans have been put into practice; a review of
progress is done i.e. an examination of what results are following from
the implementation of the plan and what feedback action is necessary,
for the betterment of the corporate planning process.
Types of Corporate Plans
 Strategic Planning

Strategic Planning consists of the

process of developing strategies to
reach a defined objective. It sets the
long-term direction of the
organisation in which it wants to
proceed in future.
Strategic planning includes a
high-level overview of the entire
business. It’s the foundational basis
of the organization and will dictate
long-term decisions. The scope of
strategic planning can be anywhere
from the next two years to the next
10 years. Important components of a
strategic plan are vision, mission and
values.
 Operational Planning
Operational or Tactical planning supports strategic
planning. It includes tactics that the organization plans to use
to achieve what’s outlined in the strategic plan. Often, the
scope is less than one year and breaks down the strategic
plan into actionable chunks.

It also sets out the tasks that a business needs to perform

in order to reach a certain outcome. It is a blueprint of sorts,
outlining the business’s current performance, while
implementing the management strategies that are needed to
succeed.
 Short-Term Planning

Short-term planning looks at the

characteristics of the company in the
present and develops strategies for
improving them. Examples are the skills
of the employees and their attitudes.
The condition of production equipment
or product quality problems are also
short-term concerns. To address these
issues, you put in place short-term
solutions to address problems. Employee
training courses, equipment servicing
and quality fixes are short-term
solutions. These solutions set the stage
for addressing problems more
comprehensively in the longer term.
REFERENCES:

Websites:
 www.smallbusiness.chron.com
www.leoisaac.com
lawpath.com.au
www.yourarticlelibrary.com
www.online.alvernia.edu

Books:
Cayanan, A. & Borja (forthcoming). Business Finance.
Quezon City. Rex Bookstore
Gitman, L.J., & Zutter, C.J. (2012). Principles of
Managerial Finance. (13th ed.). USA: Prentice Hall.