Corporate planning as a control system in United Kingdom nationalized industries

Since the late 1960s some U.K. nationalized industries have undertaken corporate planning as a means of exercising control. In the early 1970s, the U.K. Government, on the advice of one of its select committees, required that all U.K. nationalized industries undertake corporate planning. This requirement has been reinforced through a White Paper in 1978, in which the government reiterated that it saw corporate planning as a major instrument of control both for the nationalized industries themselves, and also for government in its relationships with the industries.This paper examines the development of corporate planning in nationalized industries. The findings are based on research carried out since 1976 in which discussions have taken place with corporate planners in most of the major U.K. nationalized industries. The method followed was to send planners a structured questionnaire covering the field of enquiry, and to follow this by an interview (or interviews) at a high level which would allow further discussion, particularly on the issues seen as important to the organization. The questionnaire was subsequently completed in consultation with the people concerned.     

Survival of the corporate planner

Like most businesses, corporate planning units come and go. Based on a survey of 105 coporate planning units in the U.K., this article presents those factors, both external and internal to such units, which appear to have most influence on the creation, survival and success of corporate planning units.     

Corporate planning—A systems view

This paper examines the, often disregarded, fact that the very inprecision of language often obscures basic underlying conceptual differences between corporate planning as expressed in theory and in practice. Few of the claims that confusions result both from a lack of explicit definitions and from the lack of differentiation between ‘theories of planning’ and ‘theories in planning’.

The purpose of this paper is to propose such a theory of corporate planning through discussion of the following topics: (1) Problems in concepts of corporate planning; (2) The concept of an approach of corporate planning; (3) Propositions that form the basis of a theory or model of planning, relying heavily on a systems framework; and (4) a proposed corporate planning system.     

Computerized corporate planning

Computerized Corporate Planning as defined in this study is: the use of the computer to simulate the effect of alternative strategies on achievement of corporate objectives; the capability of answering ‘What if?’ questions.

The increasing complexity of business firms operating in a rapidly changing environment has led many managers in recent years to consider the development of computerized corporate planning systems. This article is concerned with an in depth study of some 55 such installations in North America and Europe. The objective of this effort conducted during the period of June –November 1970, was to determine the state of the art, identify problems of installation, and project trends in the rapidly evolving use of computers in planning. Specific questions include:

What is the economic justification for these systems? How are they being used? Who is using them? Have results measured up to expectations? What are the costs? Are organizational problems incurred?     

Corporate planning— A personal viewpoint

The theme running through this article is a plea for realism in the preparation of corporate plans. The author outlines his views on corporate planning: the steps taken by the Greater London Council to introduce corporate planning supported by a programme budgeting system are described, and a summary is given of how the planning process operates.

The effect of the current industrial, financial and economic difficulties on corporate plans is discussed, and a note of warning sounded about the utility under present circumstances of corporate planning.     

Corporate planning in small companies— a survey

The current state of research on corporate planning is directed at investigations of actual practices within specific industries. It is believed that by so doing, a more generally applicable theory of corporate planning will ultimately be developed. Within this broad framework, the study reported upon in this article was undertaken so that a determination could be made of the current level of actual planning by small businesses. More specifically, it focuses upon the corporate planning process within small and medium sized companies located in New England, U.S.A.     

Towards better strategic management

Strategic management is concerned with determining the long-term goals on an enterprise and deciding on the most appropriate course of action to achieve them, considering changing environmental conditions, resources available and risk attitudes.

The deliberate practice of strategic management is still regrettably rare and rudimentary despite wide recognition of the threats to corporate survival under conditions of rapid change. Better use must be made of the tools of business planning and many more managers skilled in strategy development will be required.

The purpose of this article is to discuss some of the difficulties in inculcating a strategic climate within an organization and to propose some approaches for improvement.     

Planning for research and development— the impact on society

This work upon which this article is based has been designed to identify only the most significant facets of future research and development (R & D) and planning in terms of their potential impact on the economic aspect of society. In order to see the impact in the United States, some contrasts have been drawn against the current and future R & D activities of other countries.

In looking for overt directions in environmental developments, it is impossible to escape the realization that no other activity has the potential to affect the lives of all men to the extent of science and technology. Hopefully, by dealing briefly with many facets of R & D, the great scope of this activity may become more evident.

The first part of this article provides the background against which future trends in R & D are examined. Next, separate considerations of the impact that R & D has on the economic elements of the environment are examined. These discussions form the basis for the hypothesis that R & D planning and decision making must not only consider the organizational viewpoint, but also must consider the environment. In this light, a hypothetical R & D planning model is presented in the last section which attempts to direct the selection of the ends in R & D planning toward some socially responsible goal.     

有限时域内部分缺货的变质品生产-定价策略研究

研究有限时域内对变质产品同时安排生产计划和制定定价策略的问题。有限时域被划分成同等长度的多个周期,产品以固定的生产率间歇生产,并以固定的速率发生变质。需求同时依赖于时间和产品价格,在每个周期内都允许缺货且短缺量部分延迟订购。目的是要寻求一个使有限时域内系统的平均利润最大化的生产计划和定价策略。在算例中,分别讨论了需求随时间增大和减小两种不同的需求模式,采用Box复合算法,通过数值计算求得相应的最优生产计划和定价策略。分析表明：对于成长期或销售季初的产品,系统应采用“小批量多批次”的生产方式;而对于衰退期或销售季末的产品,应采用“大批量小批次”的生产方式。此外,不同类型的产品在不同需求模式下的定价策略有所不同：对于有限时域较短或变质率较高的产品,处于衰退期或销售季末的定价要低于成长期或销售季初的定价;相反,对于有限时域相对较长或变质率较低的产品,在衰退期或销售季末的最优定价要高于在成长期或销售季初的定价。     

Behavioral aspects of corporate planning

Most models of corporate planning neglect to include behavioral variables. This is unfortunate, as human behavior is typically the most dynamic component of any planning system. Should behavioral variables be overlooked, due to their difficult measurability, or for other reasons, the planning system will inevitably prove deficient in terms of predictability and control. Accounting for human resources and other behavioral measurements should be routinely included in any corporate planning model. A component of such a system would include the output from a stochastic process model of expected future values of employee services. The theoretical development of such a model is briefly discussed in this paper.     

How to design a financial planning model.

Corporate planning models frequently consist of integrated pro forma income statements, statements of financial position, and cashflow statements. When implemented by utilizing computer-based planning systems, these models allow managers to explore potential decisions in ‘what if?’ planning analyses.The logic of an integrated financial statement planning model can be arranged following either a ‘funds needed to balance approach’ or a ‘direct approach’. With a funds needed to balance approach total assets are set equal to total liabilities plus equities to satisfy this fundamental accounting identity. Logic in such models is often difficult to validate. In the direct approach, total assets are calculated independently of total liabilities plus equities providing an extremely strong test for model validation prior to using the model to assess ‘what if’ alternatives.In this paper, the author discusses the logic of integrated financial planning models and their implementation with computer-based planning systems. The funds need to balance approach and the direct approach are described and contrasted to assist corporate planners in evaluating and selecting a method for constructing the logic of corporate planning models.     

Monitoring long-range plans

Are long-range plans monitored? How accurate is corporate long-range planning? These are important questions for both the long-range planner and top management. The results of a recent survey of U.S. utility firms by the author provides some insights into a number of facets of the monitoring phase of long-range planning.     

Corporate planning and operations research: Do they go together?

Corporate planners in 59 U.S. commercial banks responded to a questionnaire on the use of operations research methods in the planning activities of their bank. Based on the questionnaire responses, 39 of the banks were identified as users of operations research techniques in corporate planning. The 39 banks provided background information on their operations research activities in corporate planning with respect to techniques used, number of persons employed, general organization and overall results. In order to learn more about the performance of operations research planners, comparisons were made between the financial performance of the group of users and the group of non-users in the sample. The results suggest that U.S. banks using operations research methods in corporate planning are larger, but not necessarily more profitable, than other banks in the industry.     

Organized planning in major U.K. companies

Corporate Long Range Planning began to be fashionable in Britain in the 1960's. Now it should be possible for the managers which pioneered this development to analyse their experience for the benefit of others. This article reports the results and conclusions from a detailed study of corporate planning in 27 major British companies, each with 2–8 years experience. The aim was to discover why organized planning was introduced; what factors affected its development and what results were achieved.     

Some trends in corporate modelling

This paper reviews the evidence of a number of surveys and case studies of corporate modelling in the U.K. Some general conclusions as to trends are drawn. Thus corporate models will display increasing modularity; will be more likely to include probabilistic elements; will more often incorporate physical flows; and will be generally linked to a greater number of other models in organisations. Micros are making a substantial impact as tools for running decision support systems both of the corporate model and the ad hoc model variety. Forecasting techniques are still greatly underutilised in many organisations. Although most corporate models are currently of the deterministic financial simulation type, the influence of management education will help the adoption of more advanced models by more numerate senior managers and accountants. Indeed there is already evidence that this is happening in some organisations.     

Corporate planning in medium-sized companies in the U.K.

The past decade has seen the publication of a considerable amount of research into the corporate planning practices of industrial giants. More recent work has investigated corporate planning practice in small businesses. However, little attention appears to have been paid to actual practice in medium-sized companies. This article reports the results of a study designed to investigate corporate planning practice in medium-sized companies in the U.K. The results show that while corporate planning is widespread among medium-sized companies, it is not the well-balanced and integrated system envisaged in the literature. Also, the majority of chief executives are not truly satisfied with corporate planning as practised in their organizations, but are, at the same time, largely unable to suggest changes to make corporate planning more effective. This points clearly to a need for action by researchers and consultants in the area.     

Tools and techniques of long-range planners

Long-range planning is concerned with the integration of predictions with corporate strategies. Both practitioners and scholars of management have frequently proposed approaches to planning that they believe to be helpful. The purpose of this paper is to report which techniques and tools and what approaches to planning are actually being used. It is hoped that this information will provide the executive or practitioner with a framework for evaluating his planning practices relative to other planners.This paper is divided into four parts. Part l provides information concerning the survey and data on which this article is based. Part ll deals with the planning process in approximately 400 business firms. Part lll examines the use of two planning tools—outside consultants and computers/mathematical models. The last section presents a summary and some general conclusions drawn from the analysis.     

Environmental scanning— the state of the art

In recent years increasing attention has been devoted to amplifying individual elements of corporate planning systems—among them the environmental scanning element. Moreover, the unprecendented intensification of corporate environmental complexity has led to a proliferation of approaches to scanning the general environment. However, a recent survey of a dozen U.S. companies has questioned whether such scanning practices have, in fact, been established in an ongoing manner. The author provides evidence here, based on publicly available information, of at least nine leading organizations where the practice of scanning for planning appears to have taken firm root. A discussion of the many facets of the resulting composite picture of sophisticated wide angle scanning leads to the anticipation that it is, in fact, on the threshold of rapid diffusion in the corporate world.     

Formal planning in major U.S. corporations

As the world about us changes, managers in all types of institutions try to cope in a variety of ways. In the early 1960s, many corporate managers realized they could not make sound decisions about future business activities in an expedient, reactive manner because their firms were growing very large and complex with new technologies, products, markets and competition to deal with. As a result, formal planning techniques which had been used in narrow functional applications were introduced on a much broader scale and formal long-range planning became popular. New corporate planning functions appeared in many companies, as well as new staff planning specialists and planning executives. The author conducted a field study on the design of these systems in the mid-1960s and he argues that they showed great promise for improved management.With this history in mind, we might ask why such subjects as ‘planning techniques’ and ‘problems of implementation’ are still topics of concern. It would seem that such techniques would be well known and established in most firms after 10–15 years. However, this is not the case, for during a second field study of corporate planning systems which was completed in 1976 the author found that many corporations, including some of the largest ones, had redesigned their planning systems in the early 1970s, essentially making a fresh start at formal long-range planning. (See Table 1).From his recent field study the author concludes that all corporations experience problems in implementing and using a formal planning system. The nature of these problems and some possible remedies are the subjects upon which this article focuses.     

Long range planning in large United States banks

This study indicated that there is considerable interest in formal strategic long range corporate planning among large U.S. banks. Officers in a total of 97 large U.S. banks provided information on their bank's efforts in the area of long range planning for this study. The data indicated that the percentage of large U.S. banks with fully developed and operational long range planning systems is rapidly increasing. Information on the organization for long range bank planning and the administrative procedures being utilized are presented and discussed. In addition, information on problems that the bankers are experiencing in implementing and operating their long range planning systems are presented.