Fall 2022 Midterm Exam on Corporate Planning- Texas A&M University
Do you have an upcoming exam on corporate planning that you need to study for? This blog is for you. It includes four questions done in Fall 2022 at Texas A&M university in the midterm exam. We have provided some well-researched answers to these questions. You can use them to prepare for your test and they will help you ace it. If you need extra help, you can hire our management exam helpers and they will assist you.
Planning the progress of a company lies on the shoulders of the chief executive. What are some of the reasons why planning may fail?
- Faults of the Chief Executive
- He does not believe in it but has a planner because it seems like the thing to do.
- Insufficient backing by the chief executive leads line managers to underestimate its importance.
- Instructs planner to take no interest in current activities and to avoid upsetting line managers.
- Gives planner too low a status for him to be able to converse with general managers on equal terms.
- Creates a planning committee rather than giving planning tasks to one individual.
- Allows some managers to opt out of the system.
- Spends too little time on planning.
- Faults of the Planner
- Tries to do all the planning himself.
- Planner of low caliber.
- Planner has only a part-time interest in planning and has to spend too much time on other activities.
- No control mechanism or other procedures to convert plans to action are included in the system.
- Planner is a narrow specialist who cannot see the full scope of his task and views planning only in terms of his discipline (e.g. O.R., accounting).
- Lack of attention to one or more of the basic steps.
- Faults of the Company
- Company as a whole does not understand the corporate-planning process (not all companies with "planning departments" carry out formal planning).
- Managers are judged on current results only and no account is taken of their plans.
- Company tries to move into an advanced management area before it is ready (e.g.: companies with no accounting function).
Explain in detail the role a corporate planner plays in a company. State his job description, principal responsibilities, qualifications and experience needed.
- Job description of a corporate planner.
- Principal responsibilities of a corporate planner
- Introducing a system of formal long- and short-range planning covering all areas of the organization.
- Assisting management in the definition of objectives and goals.
- Identifying long-term internal and external factors and their potential effect on the company.
- Assisting the Chief Executive in the development of strategies to achieve corporate objectives.
- Analyzing and making recommendations on alternative courses of action, including capital investment, acquisitions, divestment, and expansion.
- Ensuring that the future implications of all decisions are taken into consideration.
- Appraising corporate strengths and weaknesses.
- Advising all management levels on planning matters.
- Writing strategic plans to reflect the decisions of the Chief Executive: coordinating the plans of line managers.
- Monitoring plans and the assumptions on which they are based so that the Chief Executive can control progress.
- Maintaining a manual to describe the planning system and to specify the part each person has to play in that system.
- Initiating special studies and research appertaining to the future of the company. (Where available, working through appropriate departments within the organization).
- Training management in planning principles and methods.
- Applying appropriate techniques to the solution of problems.
- Qualifications of a corporate planner
Title: Corporate Planner
Reports to: Chief Executive
Purpose: To assist top management to plan the future of the company in an orderly way.
Should be qualified to degree standard in an appropriate discipline, but should not be a narrow specialist A wide range of disciplines are suitable. E.g.: Economics, Business Administration, Market Research, Mathematics, Statistics, and Marketing.
Should have experience with corporate-planning principles and methods, and ability in some management techniques (ability in ALL techniques is virtually impossible). Appropriate techniques include:
Should also be thoroughly experienced in management theory and philosophy. Must be able to express his thoughts fluently both verbally and in writing. Must have integrity in his approach and must not be afraid to make recommendations that may be unpopular.
Must be able to communicate with all levels in the organization.
Age: Not younger than 30.
The right climate has to be created for the success of corporate planning. Explain what the pre-planning stage involves and the steps that the chief executive takes.
We must consider the situation when the right man has been appointed to a company where the chief executive has been at pains to create the right climate for the success of corporate planning. It is worthwhile thinking about some of the steps which the planner will have to take to make planning happen. This is when the chief executive's decision to undertake the corporate planning approach begins to move very definitely into the action phase.
It seems to me that the planner has several things to do before he can set a planning system into motion. This is a pre-planning stage when time must be taken to "plan the plan". As I see it, he has four basic steps to take:
- Management education.
- Design of planning system.
- Issue of planning instructions.
The only problem with writing down a series of steps is that there immediately appears to be a neatly ordered sequence. In practice, the steps all have blurry edges: some will be started before others have finished, and in the middle of it the planner will be beginning those elements of the planning process which have to be carried on, regardless of the final shape of the system. Objectives will be set, the corporate appraisal begun, and, because he will be walking into a dynamic situation, there will be ad hoc situations which will require his attention. Only in a company that begins corporate planning before incorporation is it possible to prevent anything from happening until the planner is ready for it! So there will be capital investment decisions, new products and a thousand and one other decisions which will make claims on the planner's attention, long before he has helped the company to produce its first long-range plan.
With this in mind, it is possible to interpret the four steps in the way in which they will occur in the hustle and bustle of the normal business environment. And, of course, the order will gradually appear out of the apparent chaos.
The first step has been covered in the description of the planner himself. If he has been appointed from within and has no planning expertise, his first task must be to acquire some. If he has been hired from outside he must first learn enough about the company to begin the other steps: but in this case, the learning can be linked with the preliminary moves towards the corporate appraisal. In any event, step one should not last more than a matter of weeks (although this does not suggest that the planner should then close his mind and assume he knows everything!).
The next stage is a vitally important one. Something new is happening in the company which will affect the life of every manager. It is only fair that a determined effort is made to explain what is happening it is not only fair, but it is prudent since many misunderstandings can be avoided if managers are shown what planning is before any other demands are made on them.
The development of managers' knowledge of methodology can be approached in two ways. Firstly, in his first few weeks, the planner should meet as many managers as possible, to "sell" planning to them, and to establish good interpersonal relations. At this stage, the planner may still be eyed with suspicion, but at least he will have shown that he is flesh and blood. like everybody else.
It is also useful to hold an internal seminar (or series of seminars) to explain to managers the full implication of planning, and the theory behind it. In some companies, a guest speaker can be used to advantage on the basis that many managers are more likely to believe what they learn from an outsider, than what they are told by someone whose salary they are paying. The handling of these meetings is important, for they can shape line managers future attitudes to the planner and planning. Depending on the requirements of the company, it may be worth holding seminars for different levels of management: each should, of course, be pitched to appeal to the particular responsibilities of the managers attending. A professional approach is important in the holding of any seminars, for all managers will be giving a little of their most precious resource-time-and this must not be wasted. In many situations, it may be necessary to develop a more comprehensive course or program. Specialist outside help will usually make this a professional and effective initiative.
During the whole of this educational process, the chief executive should by his behavior show that he fully supports his planner. It would be a very bad start to planning if the chief executive were to announce that he was too busy to attend the seminar. His presence is vital to convincing managers that he is serious in his intentions.
Many corporate planners believe that planners and line managers are incompatible: that at best there is armed neutrality between them at worst open hostilities. I do not accept this point of view, and I believe that any good team of executives can work within the planning framework, provided the right relationship is established from the beginning. The second worst mistake a planner can make is to give the impression that he is going to do all the company's planning himself from now on, and that the managers are his little chess-men whose function is to put the plans into operation. (The worst mistake a planner can make is to try to do all the planning himself! Unfortunately, some do.)
There will be many decisions to be taken on the design of the planning system. It is almost certain that the conceptual approach outlined in the previous chapter will be recognizable in whatever system is adopted: the final system will certainly have important differences. The unique needs of the company must be taken into account, and the ultimate scheme should slide as neatly as possible into the company's way of doing things.
Every company is likely to have in existence some semi-formal elements of planning, and there is almost certainly bound to be a process of budgetary control. It is worthwhile using these existing elements as building blocks where they are suitable. Similarly, the basic organization chart of the company should provide a framework for establishing the exact contribution required from each person - although, of course, it must not be forgotten that the corporate appraisal may show the need for changes in the organization. I do not think the planner can expect that the first system he designs will be perfect: he should expect to make changes as time progresses, both to meet the needs of a dynamic organization and to improve on his original ideas. In this way, the system will be a flexible part of a living company.
It is considerate if the planner can try to avoid the busiest planning periods falling at the time of year when managers are most stretched. Of course, this is not always possible, but where a clash can be prevented it will make for the smooth running of the system, as well as give the managers more time to think.
Forming a planning manual that shows very clearly what part every manager is expected to play in the planning process is important. Explain what the outline of a planning manual would be.
Planning is a system of communication, and the system must build opportunities for interdepartmental discussion, as well as discussion up and down the line. Once all the details of the planning system have been decided they should be presented in written form to all involved. The basis of this record should be some form of planning manual, which should show very clearly what part every manager is expected to play in the planning process. I think it is a waste of time for anyone to approach a line manager with the request to "prepare a 5-year plan by next Friday" unless he is also given guidance on the sort of problems he is expected to consider in the plan (and a reasonable period of thinking time). So the planning manual should set this out in full detail.
Suggested outline of a planning manual
Part 1: The Background to Formal Planning
- Description of the Formal Planning approach and processes.
- Marketing Planning.
- The value of the Gap Analysis Technique.
- Features of a good plan.
Part 2: An Overview of the Total Integrated System of Short- and Long-Term Planning in the Firm
- The total system.
- Marketing information required for plans.
Part 3: Long-range Planning Procedures and Systems
- The types of the long-range plan which form the system.
- How these are coordinated.
- Methods of dealing with risk and uncertainty.
- The Strategic Plan.
- Operating Plans for each corporate activity area.
- Personnel Plan.
- Financial Plan.
- Standardization of typing, etc.
Part 4: The Annual Planning System
- Relation with Long-range Plans.
- Relation with the budgetary control system.
- Departmental Plans.
- Profit Centre Plans.
Part 5: Project Plans
Methods of evaluating capital expenditure proposals.
Part 6: Monitoring and Controlling Plans
- Annual Plans.
- Long-range Plans.
- Project Plans.