Corporate Planning - Definition, Types and Advantages

Corporate Planning

Corporate planning is a term denoting a line of approach or style of an attitude which uses a systematic and integrated approach to all aspect of firms activities. The idea is a treat the organization as a corporate whole rather than a collection of department and on a long term basis. The whole of the industry of which the organization is part of, should be examined nothing nature trends of supply and factor possible future trend and lost opportunity and threat are problem to organization.

In general, corporate planning is the primary responsibility of top managers who are responsible for approaching corporate and functional plan so as to ensure that they consistent with the corporate planning is not made in a vacuum other manager do have input to corporate level planning divisional and functional manager are encourage in many organization to submit proposal for business venture to the chief executive officer or top manager who evaluate the proposal decides whether to found them thus both the top manager and lower level manager can usually given the opportunity to become involved in the process.

The basic role of corporate planning is the conscious choice of pattern of influence on decision makers with the objective of coordinating decision for some span of time in the future and influencing them towards particular board goal.

Many management scholars have given various definitions to corporate planning. According to Peter Drunker “corporate planning is a continuous process of making entrepreneur decision systematically and with the best possible knowledge of their featuring, organization systematically the effort needed to carry out these decision and measuring the result against expectations through organized system feedback.

John Argenti (1968) defines corporate planning as a systematic and disciplined study designed to help identify the objectives of any organization or corporate body determining an appropriate target decided upon suitable constraint and device a practical plan by which the objective may be achieved “its approach emphasis on the joint establishment objective between manager and supervisor.

Shafira and Reingart (1981) there own view defines corporate planning as” making decision about the future oriented decision process involves setting objectives gathering and organizing information determine feasible course of action and choosing among them, implement the action and monitoring the result to ensure compliance with the objectives with the definition given by the various authors above it is important to note that in order to accomplish any goal activities must be group logically and authority should be granted so that conflict do not occur. Hence corporate planning bridge the gab from where we are to where the want to be in future.

It is the most important activities of management because it determined the means of attaining them therefore it is choosing from among the alternatives course of action and this provides a rational approach to achieving pro-selected objectives, corporate planning as a planning process at it most sophisticated stage of development process make use of the total information and communication resources of an organization and relate this decision making process which implies the willingness of some manger and department to subjugate their own particular plan to overall requirement for the organization a central unit is set up to central and monitor the developing situation in an organization so as to achieve success.

Due to the effectiveness of corporate planning it as been introduce by most top manager and other level managers in to their organization for the following reasons:

Many organization need to think out their objective and identify gaps that exist between their current supply goods and services and what the market actually needs.

The large the organization the more likely there is to be competing needs of scare resources. To achieve maximum benefit this implies the need for central planning and control as proposal to planning by individual department or manager.

The space to change is quickening and organizations have to adopt and react to changes corporately, rather on individual departmental basis.
Modern computer based information system provides an overall planning to a degree that was hither to impossible.

In all these corporate planning involves times and money as well as availability of information. It therefore, behooves on all concerned to ensure that these essential resources are provided to make it work since corporate is simply a formal and logical method of running a business which is comprehensive and embracing all the activities of an organization. It is also a tool of management to guide the business towards its agreed goals.

Therefore, corporate planning is a strategic plan which involves primary managerial function which logically precede all other function since without planning a manager would not have activities to organize, would not requires staffers have on one to direct and also would have no need to control the objective of the organization.

IMPORTANCE OF CORPORATE PLANNING

Essentially, planning is ascertaining where an organization is at the present tie and deciding where it should be in the future and how to move it forward the future and forecast what may happen in order to take actions in the present and mobilize organizational and threat. Due to the uncertain and complex nature of the external environment managers must typically deals with incomplete information and bounded rationality.

Almost at top and low-level managers are engaged in planning and should and participate because they must try to predict future opportunities and threats. The absences of a plan often result in hesitation that can certain organization or even lead to disaster.

There are four important of corporate planning

Corporate planning is a useful way of getting managers to participate goals and strategies for an organization. Effective corporate planning gives all managers the opportunity to participate in decision making, for example, top managers as part of their annual planning process regularly request inputs from lower level managers to determine what organization goals and strategies should be.

Corporate planning help managers to co-ordinate the different function and division to ensure that they all full in the same directions without a good plan, it is possible that the members of the manufacturing functions will produce more products than the members of the sales function can sell resulting in mass of unsold inventory.

A good corporate plans can be used as a device for controlling manager within an organization. A good corporate plan specifies not only which goals and strategies the organization is committed to but also who is responsible for putting the strategies into action to attaining a goal, they are motivated to do their best to make such the goals are achieved.

Corporate planning is necessary to give their organization a sense of direction and purpose. A corporate planning state what goes in an organization is trying to achieve and what strategies it intends to use t achieve them without a sense of direction and purpose that a formal corporate plan provides managers may interpret their own task and role in the ways that is best to suit themselves. The result will be an organization that best suit themselves. The result will be an organization that is pursuing multiple and often conflicting goals and a set of managers who do not corporate together. Corporate plan keeps managers on track by stating which organizational goals and strategies are importance so as to use the resources under their control effectively.

Henry Fayol, the originator of model management says that effective corporate plans should have four qualities.

• Unity
• Continuity
• Accuracy
• Flexibility

Unity: Means that at any time only one central guiding plan is put into operation achieve an organizational goal, more than one corporate plan to achieve a goal in an organization.

Continuity: according to Henry Fayol means that planning is an ongoing process in which managers both top and lower level build and refine previous and continually modify plan at all level corporate business and functional so they fit together into one board frame work.

Accuracy: Is that which manger need to make attempt to collect and utilize all available information at their disposal in the corporate planning. Process manager of course most recognize the fact uncertainty exists and that information is almost always incomplete.

Despite the need for continual accuracy however Henry Fayol emphasized that corporate planning process should be flexible enough so that corporate planning can be altered and changed if the situation change, manager most not bound to static corporate planner.

TYPES OF CORPORATE PLANNING

The essence of corporate planning is to make sure that risk are reduced to the barest minimum in an organization. There are basically two types of corporate planning, they are;

Operational planning: This is the type of planning that involves the day today activities of an organization, it contains details for carryout corporate plan. It also include sales profit and cash flow projection by product line market share and capitals requirements.

Operating planning can further be sub divided into

• Standing plan
• Single use plan

Standing plan are flows that can be used over again. That is, it can repeatedly use. Examples of standing plan are policies procedure and rules while single use plan is subset of operational plan that than only is use for single in the organization. Example are programmes budget and project.

Strategies planning: this is the type of planning that is concerned with long term basis for new product that are important to the development of an organization both from within or acquired outside such factors, strategies planning involve a longer period and rely on more unreliable long term forecasts and occur at more serial level in an organization. It helps decide upon the major goals of the organization and what policies will be use to achieved them

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