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.     

Planning in Nigerian business

This article focuses on two specific areas of Corporate Planning in Nigeria, i.e. what are the special problems of planning in a less developed economic environment and how have these problems affected the practice of corporate planning in such an economy? The author reviews the planning environment in Nigeria and finds that formal corporate planning is fairly widespread, a reflection of their association with multinational companies in many cases.     

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.     

The Equality Effects of the ‘Hyper‐formalization’ of Selection

This paper explores how formalization of employee selection procedures for the purpose of ensuring equality of opportunity can become so extensive that the intended outcome of fairness is undermined. Drawing on empirical evidence from a large media organization, the analysis reveals the detrimental impact of formalization in relation to the recruitment of ethnic minority staff. While the existing literature describes how, during recruitment of employees, the circumvention of formal equality procedures can occur through managerial neglect and manipulation, the analysis in this paper shows that, paradoxically, circumvention can also occur through compliance with procedures. This new category takes three forms (robotic, defensive and malicious) and appears under conditions of excessive formalization – the term hyper‐formalization is coined to describe this. The paper develops new concepts that add to understanding of the limitations of equality and diversity procedures, and brings fresh challenges to some of the liberal assumptions about the efficacy and desirability of formalization for achieving fairness.     

Strategic planning system for multinational companies

This article is based on a research study, the object of which is to illustrate the major components of global planning in the context of modern administration. Data were collected from a representative sample of multinational companies, both U.S. and non-U.S. based. The planning process in the companies surveyed followed a pattern based on formal planning systems. The author concludes that multinational corporate planning will in future become a blend of administrative and institutional types of plans.     

Planning and economics

It is an ironic fact that British industrialists, who regularly complained so bitterly about the amount of planning (or interference) by the last government, should have been so ready to embrace Corporate Planning. Yet this welcome has been very real, as can be judged by the number of advertisements appearing in the quality papers for corporate planners and the large numbers who enrol for any course which incorporates corporate planning in its title. The irony lies in the fact that formal definitions of corporate planning could be applied as much to the state as the firm. However, whilst the one is ‘good’ business the other is alleged to sap initiative, ruin morale, and interfere with the natural workings of the market place.     

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.     

Drivers of Corporate Social Responsibility: the Role of Formal Strategic Planning and Firm Culture

Scholars have paid considerable attention to studying the relationship between corporate social responsibility (CSR) and firm performance. Yet, little empirical research demonstrates what actually shapes or drives CSR. This paper builds a case that formal strategic planning is one such driver in that it creates awareness of and formulates responses to stakeholder demands for CSR. However, exploring single variable relationships is problematic, as other important endogenous factors need to be considered in explaining CSR. Specifically, firm culture is identified as influencing a firm's orientation towards the responsible treatment of stakeholders. One such cultural factor, humanistic culture, is argued to have a positive effect on CSR. By studying a sample of heterogeneous firms in Australia, results demonstrate that a formal strategic planning effort is positively linked to CSR. Further, a humanistic culture positively impacts CSR, after accounting for a firm's formal planning efforts.     

Strategies for planning

In recent years there has been a good deal of discussion amongst planning specialists and academics about the gap which exists between the theory of planning as set out in journals and textbooks, and the practice of planning in private and public organizations. Planners are continually complaining about the resistance to planning by top management and operating managers in divisions and departments.In this article the author aims to produce a reconciliation between theory and practice and to discuss what alternative strategies are open to planners in devising planning systems for their organizations.He suggests that the problem has its origin in the fact that corporate planning theory was first developed by management scientists as a total systems approach. Corporate planners have failed to sell an integrated planning system either as programme budgeting or as corporate planning. Research suggests that a management team can only adopt and implement a comprehensive planning system in very special circumstances, e.g. when the organization's survival is threatened, a new management team has been appointed and the staff of the organization are ready to accept radical change.In normal circumstances the planner is wrong to advocate a ‘root and branch’ solution. He must diagnose the planning needs of the organization and his objective must be not merely to establish a particular planning procedure but rather to discover how he can best improve the quality of management decisions.Recent studies on strategy formation indicate that the introduction of a formal planning procedure is only a partial answer to the problem of improving the quality of management decisions.The paper reviews various approaches to planning and considers how they relate to organizations with different strategic problems, with differing organization structures and various management styles.     

Corporate planning—a conceptual critique

Corporate planning is accepted by some as being an effective, efficient, and feasible means of charting the path an enterprise takes through the future. In this paper the author questions both the concept and the contribution of corporate planning. The author examines not only the problem of budgetary analysis within a planning process but also questions the ability of corporate planning to provide the necessary perspective of the future in any identifiable or probabilistic sense. The author postulates ‘the guts of corporate planning’. In the author's own word conceptual critiques ‘may be defined as setting up your own straw man in place of the other fellow's sawdust totem’. However, this paper presents some controversial yet fundamental criticisms of the current concepts of corporate planning. It is for the reader to judge whether the straw or the sawdust is deepest.     

Strategic planning in Tanzania

The Tanzania Wood Industry Corporation is one of the very few parastatal organizations that have developed and introduced a strategic corporate planning process. The novelty of the idea, the many operational problems that surround the managers and the lack of adequate training are some of the problems that have retarded the development and introduction of corporate planning in Tanzania. In 1980 the new CEO of TWICO contracted a Finnish management consulting firm to audit the whole corporation and to recommend a better management practice. Systems manuals were then developed and a grassroots based strategic corporate planning process was then introduced. Now in its third year, the impact on management is very encouraging.     

The organisation and practice of corporate planning in the U.K.: Some recent survey results

This article reports some relevant results from a recent survey of the corporate planning practices of a number of leading British organizations. The sample spanned turnovers from £2000m. Within this range, the functional areas involved show considerable variation: for example, 95% of companies perform financial planning, but only 52% production planning. Organization too, quite naturally, displays great variety: thus one company operates with only a single planner whereas another employs thirty. Ratings are quoted for the main advantages and disadvantages of corporate planning as assessed by the chief executives; in general, the benefits dominate.     

The use of scenarios in corporate planning—eight case histories

In response to an increasingly turbulent environment, many firms are attempting to develop means to assess proposed strategies in the light of plausible alternative futures. Probably the most widely adopted technique for this purpose is multiple scenario analysis (MSA). The extent of MSA adoption among corporations varies considerably depending upon respective planning experience and top management's involvement and interest in MSA itself. The gamut of MSA adoption is examined among eight representative large U.S. corporations. It is clear that, while corporate interest is high, current formal scenario generating methodology is too complex or academic for practical corporate use. Instead, planners are using their own informal approaches to scenario generation.     

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.     

Conjoint effects of interacting strategy-making processes and lines of defense practices in strategic Risk Management: An empirical study

The ability to contain adverse effects of major risks under turbulent conditions and exploit the opportunities they present are fundamental concerns in strategic management and various institutions promote enterprise risk management (ERM) to deal with these challenges. Yet, our knowledge about how ERM affects performance and interacts with corporate strategy-making processes is limited. The ERM frameworks impose first and second lines of defense practices to integrate business operations and corporate risk oversight. Emergent strategies generate responsive initiatives and strategic planning coordinates updated actions. Hence, this study analyzes the conjoint effects of these ERM practices and strategy-making processes based on a large corporate sample and finds that ERM practices depend on strategy-making to attain effective risk outcomes. The application of ERM frameworks can, therefore, not be assessed in isolation, but must consider corporate strategy-making. This has implications for the way we conduct research on strategic risk management, how executives approach risk oversight and policy-makers impose formal risk governance requirements.     

Corporate planning in the Netherlands

This article is the result of an investigation into the practice of corporate planning in 20 major Dutch companies. The results emphazise some of the problems regarding the corporate planner and his role in the firm. Those problems are such that it is not unrealistic to speak of some sort of “identity crisis”.     

Strategic planning could improve your share price

From a financial point of view the long-term ultimate goal of the firm is to maximize its stock price. A high P/E multiple keeps existing stockholders satisfied, reduces the chances that a corporate pirate will attempt to raid the company, and also facilitates the company's own acquisitions.Therefore, financial managers are especially interested in answers to the questions of if and how strategic planning can help to improve the price-earnings multiple. The results of the study summarized in this article answer the first question in the affirmative and give at least a partial answer to the second. Contrary to the conclusion of some other recent studies, this study finds a definite long-term financial payoff from strategic planning. Furthermore, it suggests that strategic planning may be more effective if it is conducted at the corporate rather than solely at the division level.If maximization of stock price is a corporate goal, delegation of strategic planning entirely to the division level may result in a high cost to stockholders.     

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.     

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.     

Changing perspectives on the capital investment process

The environment within which institutions undertake commercial and industrial activity changes both as a result of decisions dependent on the institution itself and as a result of decisions independent of the institution. In recent years many of these changes have resulted in changing perspectives on the range of criteria which should be considered when determining how and where large corporations should invest their money. This paper examines these changes in corporate practice and identifies the cumulative results of these changes in the environment of corporate activity. The paper also examines some of the key elements in new approaches which corporations are adopting to capital investment decisions by utilizing data on a broadly based research project which examines in depth the capital investment/ resource allocation processes of five large, worldwide, manufacturing firms. The subject is of vital importance to large and small businesses, both because of the crucial importance of investment decisions and because of the importance for future strategic planning of identifying the environment within which corporate activities take place.