Computer models for corporate planning

This paper presents results of a survey of corporate modelling in 65 U.K. companies. It shows that corporate models were already used in a wide range of industries by 1973 and analyses the characteristics of these models, the uses to which they were put, the background of the model builders, approaches to development of models that were adopted, costs of development, and indications of success or failure. It is, for instance, shown that many corporate models are relatively small and simple, and have been built by accountants, planners and other ultimate users, using special facilities for corporate modelling offered by computer bureaux and consultants.     

Marketing planning and corporate planning

The market planning subset of the corporate planning process has unique difficulties associated with technical, organizational and behavioural problems. A major technical problem is that of getting the company sales forecast right. The paper suggests a check-list for budget reviewers aimed at producing more realism in forecasting (Section II).Organizational problems are discussed in terms of allowing time for full concurrence between budget framers and reviewers (Section III). The little-discussed behavioural problems associated with the interface between line management and marketing staff specialists are outlined in Section IV with some suggestions for overcoming them.     

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?     

A simulation system for corporate planning

This paper describes the structure and use of a general purpose simulation package developed for the interactive construction of dynamic computer-based simulation models. The package consists of a system of computer programs written in the BASIC language for a Digital PDP 11/70 time-sharing computer.The framework upon which the package is based is essentially an amalgamation of the System Dynamics and Input-Output approaches to the modelling of complex organizations. Networks of levels and flows provide the basis for dynamic, modular representation, while matrix algebra features provide the basis for aggregational flexibility and the analysis of multi- product multi-process industrial systems.The package is designed to provide planning managers with the ability to construct flexible models, localized or ‘corporate’, financial or non-financial, without the need for any programming in the conventional sense. A flow diagram of the system to be modelled guides the model builder in responding to computer terminal prompts which determine the model structure as a set of programmed relationships. This in turn gives rise to a further series of prompts at the terminal for the entry of all data pertinent to the model. Model editing and computation then proceeds, with user interaction, if desired, for amendments, monitoring of computations, and report generation.Two specific applications of the package are discussed in the latter part of the paper, and sample output from runs of both of the resultant models is provided.     

Management control for effective corporate planning

The authors' object is to provide a practical technique to help senior management put long range plans into operation. A model framework is used to identify the objective requirements and principal elements of control within the firm. A procedure is then outlined to identify the weaknesses which may erode the effectiveness of the system, thus providing the basis for system design and adaptation. The use of the method is illustrated in four case studies from actual companies.     

Manpower in corporate planning

In this article, the author seeks to show the importance of giving thorough consideration to manpower in all planning activities, whether long or short term. He also emphasizes that manpower planning lies at the heart of all rational personnel activities, if they are to contribute as they should to the objectives of the organization. He outlines the elements of manpower planning, the main methods of forecasting demand and supply, both within and outside the organization and sets out the main elements of the manpower plan.     

Discrete simulation modelling for corporate manpower planning

Manpower planners within South African companies have very few, if any, decision support tools at their disposal to assist them in the formulation of their manpower strategies. Such quantitative tools as do exist are mathematically too sophisticated to be easily understood and implemented by manpower managers who are, on the whole, non numerate. The approach proposed in this paper, namely simulation modelling, discusses and demonstrates a powerful quantitative method which is conceptually easy to understand and whose results are easily interpreted. This particular simulation model examines the impact on organisational staffing levels over time as a result of specific present/proposed manpower policies in the areas of procurement and promotion. Through manipulating the inputs, the manpower planner can, with relative ease, examine the consequences of a range of alternative policies within a very short period of time.     

Risk management in corporate planning

The risk distribution matrix (RDM) is to be applied in resource allocation and is a means of placing environmental risk in perspective. All forms of business operations should be included so that a company has a comprehensive picture of its commitments in safe, moderate, and high-risk countries. Corporate self-analysis is involved in the first three steps. The fourth step seeks to correct the risk profile through multiple strategies. Many years are likely to be required before a company achieves its desired profit/risk composition.

The advantage of the system is its individualization. Within the general framework given on the preceding pages, companies can make decisions based on factors unique to their industry, current position, preferred position and flexibility within the constraints identified. Ultimately, RDM provides a thorough evaluation system custom tailored to each company, insuring more profitable overseas transactions.     

An integrated corporate planning model for forest-based industries

The paper presents an integrated model for corporate planning of forest-based industries. Techniques are developed to determine the profitability of wood quality manipulations, taking into proper account the impact of uncertainties on future product prices. Production alternatives of final products are specified as functions of wood quality properties which are, in turn, functions of tree type (genotype) alternatives. The total return from processing wood depends on future prices of final products, which are unknown. Selling prices of final products are related to stochastic price indices for solid wood products and paper products. Risk can be reduced by diversifying among genotype alternatives; in a case study the value of a portfolio of genotype alternatives is significantly larger than the single ‘best’ genotype alternative. The model framework may be applicable to any other natural resource industry with similar characteristics such as agriculture, petroleum or mining.     

Data and effective corporate planning

Among the most important problems facing corporate planners is that of data: its availability: the management of uncertainly and risk; data presentation etc. With the exception of several articles on forecasting methods, the literature of corporate planning contains little on the subject of data. The purpose of this article is to present some ideas which will encourage further debate.     

Development of corporate planning staff

This article considers the problems associated with the development of corporate planning staff in multi-divisional organizations. The author points out that formal planning has grown phenomenally during the last decade and there is a need to consider the development of corporate planning staff to meet the exacting challenges of the job.     

Marketing and airline corporate planning

This article focuses upon the impact of marketing on the corporate planning process in the air transport industry. The literature of consequence to marketing, corporate planning, and airline planning is synthesized into a normative planning structure and a framework of marketing dimensional elements.     

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.     

Elements of effective corporate planning

This paper focuses on several specific areas in corporate planning which heretofore have received limited attention in the literature. These areas include perception of a need for planning, analysis of planning from a process viewpoint with particular emphasis on organizational structure, and elements of effective planning. Data on which conclusions are based were developed through structured in-depth interviews with key planning executives of 14 large corporations in the Pittsburgh Metropolitan area.The study determined that the most prevalent event associated with perception of a need for more formalized planning was a change in top management. The emphasis on planning usually arose from three sets of factors—organizational, external, and performance. The typical planning process involves establishing corporate goals and objectives, setting environmental premises, collecting information and forecasting, establishing divisional goals and objectives, developing divisional plans, and revising objectives and plans if objectives are not met. The major participants in the planning process are top management, the corporate planning department, divisional general management, divisional staff groups, and intermediary planning groups.The study identified necessary conditions for effective planning which included planning knowledge and skills, planning climate, psychological commitment, and effective group behavior. The study also includes a discussion of planning weaknesses, current trends, and recommendations.     

Organizing the corporate planning function

A survey of corporate Planning in Britain suggests that the way the process is organized varies with the need of the firm. There appear to be two types of needs which foster the development of the planning activity—strategy development and co-ordination. In capital intensive companies, threatened by technological or market change, there is a need for reappraisal of the firm's overall strategy. On the other hand, in a large diversified firm the requirement may be to co-ordinate the plans of different divisions and departments, particularly investment proposals. This article suggests a framework for the analysis of these planning needs.     

Developing a corporate planning model for a small company

This article describes the development and implementation of a corporate simulation model for a medium-sized New Zealand firm producing a range of medium density fiberboard products. Problems associated with the design and implementation of a planning model in a relatively young, capital-intensive company are highlighted in terms of changing objectives and model requirements. An assessment of costs and benefits is included.     

Long range planning society report Challenges in corporate planning—Third international conference on corporate planning—Brussels September 1973

Organized by the European Society of Corporate and Strategic Planners and jointly sponsored with the International Affiliation of Planning Societies this proved a valuable opportunity for over 400 delegates from 25 different countries to hear distinguished speakers and meet together.     

How corporate planning responds to uncertainty

This article is based upon an SSRC research project into the influence of computer methods on decision making. During this research, information on the planning systems of a cross-section of British industry was obtained.The paper illustrates how managers in these firms were coping with planning in the present conditions of extreme uncertainty about the future, combined with adverse economic and business conditions. Conventional planning theory, together with some modern observations on it, are briefly described and then the paper shows how, in the firms visited, the structure of planning was more complex than this theory.It goes on to show that today's critical conditions were not leading to management putting aside their plans and computer models and “muddling through’. They were actually leading to an acceleration in the adoption of formal planning and decision making methods but in a somewhat different manner to conventional planning theory.Seven different modes of planning were identified with integrated operational planning being the most common, possibly the most essential to survival and sometimes the only planning possible into today's conditions. A trend to extend the operational plan to 2 to 3 years and to reduce the firm's long range plan from 5 to 3 years was also observed.Long range plans were being considered as planning and decision making tools and not as blue-prints of the firm's future, as accurate long range forecasting was impossible. Three types of strategic planning were identified with that carried out at intervals probably being the most appropriate for medium sized firms in today's conditions.     

A new approach to corporate planning

A fresh approach to planning can help corporate executives deal with such long-range planning problems as the setting of unrealistic plan targets by division managers and a poor record of long-range plan implementation and control. This article considers such an approach.