A commonsense approach to portfolio planning

For the diversified firm, business portfolio planning offers a way of determining its individual businesses' roles and developing a synergistic corporate strategy. In practice, however, the common tools of portfolio planning—the growth/share and market attractiveness/business position matrices—present problems in that often neither of the matrices is precisely suitable for a given individual business. This article makes use of modifications of the growth/share and market attractiveness/business position matrices in order to make them more operational. The authors believe that a step-by-step ‘shirt-sleeve’ approach to portfolio planning can make this type of analysis accessible and invaluable to a small diversified firm, as well as providing insights to larger corporations with formal planning departments.     

Who should plan technological innovation?

Over the last 10 years there has been a growing need to improve integration between business planning and R & D activities. One reason for this has been a decrease in the returns on R & D investments. An understanding of the relationship between demand and technological innovation is needed to achieve this integration. The planning approach will be very different depending on whether the company's business is based on ‘technology-push’ or ‘demand-pull’, and whether planning is controlled by the R & D or the marketing function.     

Conflict of values— the central strategy problem

There is growing evidence that the central strategy question for business is no longer ‘what business are you in?’ but‘why are you in business?’ The traditional answers to this question—‘to make profits’, ‘to grow’ and ‘to give an adequate return to the shareholder’, are all being questioned. In their place others are being suggested—‘to provide satisfying jobs’, ‘to help solve social problems’, ‘to assist in urban and regional development’.In this article, Bernard Taylor suggests that the conflict between business goals and social goals has become the central strategy problem. Business enterprises like other organizations tend to develop their own distinctive sub-cultures with their own value systems which may differ markedly from the values accepted in society generally. The more effective the selection, training and reward systems, the more these business values will be reinforced.But this can lead to difficulties when society begins to reject business values in favour of other social goals; particularly at a time when the power and autonomy of management is being challenged and Corporate Planning is being transformed from an internal dialogue between managers at headquarters and managers in divisions into an open debate involving public servants, employees and self-appointed representatives of community interests.     

The business environment in the 1980s

Dr. Harold Linstone, the editor of ‘Technological Forecasting and Social Change’ holds that too often the future is too much discounted. This seems particularly true in the case of business corporations, which tend to pay lip service to long-range planning—especially when prospective studies point to threats rather than to opportunities.The author believes that truly long-range planning will rarely be operative until business corporations muster the political will to jointly write a scenario of their (interlinked) future, and to act accordingly. Illustratively and speculatively, such a scenario might read as follows:     

Strategic planning for the armed forces

The author points out that in most countries the defence department is a very large ‘business’. He claims that, although long-range planning in the Canadian Department of National Defence may not be perfect, it does follow the stages of traditional strategic planning. He describes these stages, pointing out some innovations which he feels could be of value to other government departments in other countries as well as to large corporations in the private sector. He emphasizes the importance of feedback and describes ‘capability components’ which have been developed in the Canadian defence department to replace the traditional thinking in terms of ‘Army, Navy, Air Force’. Each capability component focuses on the required output/result and has a sponsor who is responsible for developing plans for the long-term ‘state of health’ of his capability component. Overall, the author makes a strong case for forward-looking and results-oriented strategic planning.     

A control engineering framework for planning

Control Engineering provides a convenient framework for analyzing and understanding the essential features of business planning and control processes. This is because the basic idea of a control hierarchy is fundamental both to Control Engineering and to the control of a business. Control hierarchies in both business and in engineering are information-processing devices. As a business grows in size and complexity, its control hierarchies grow correspondingly more complex (‘The Principle of Hierarchization’); this is in order to manage the increased information-processing load.The authors describe how the basic control diagram can provide valuable insight into the planning and control hierarchies of business systems. The authors emphasize that the ‘Control Engineering’ method of analyzing the management process complements exisiting theories of management planning and control.     

Effective measures for reducing environmental insurance costs

Can pollution prevention (P²) management practices result in lower premiums paid for business insurance? In theory, P² activities on the part of the insured can reduce the risk of pollution-related claims—but this depends on a competetive insurance market. What follows is an examination of two forms of business insurance—environmental insurance and worker's compensation insurance— and some cases where lower costs were realized.     

规避农副产品原材料产出不确定风险的商业保险策略

为了保证产品质量、降低生产成本，许多农副产品制造商选择自己种植原材料以满足农副产品的加工生产。然而，农作物的产出易受不利事件（如各种自然灾害）的影响而具有不确定性。这种不确定性可能导致最终产品产出不足，严重时甚至引发财务危机。为了应对潜在风险，农副产品制造商可向金融机构购买商业保险。本文建立了单周期农副产品制造商的计划产量决策模型，通过研究制造商购买商业保险的边界条件及最优商业保险策略，分析商业保险策略在制造商规避原材料产出不确定风险时所具有的价值。研究结果表明：（1）只有保费的安全因子低于外部融资的单位惩罚成本时，制造商才会购买商业保险；（2）最优商业保险策略与计划产量无关；（3）最终产品单位净收益越低，商业保险的价值反而越高。     

Strategic planning in large firms—some guidelines

Some argue that a foundation for planning has been achieved when a firm can state its strategic plan in terms of products and markets. (This is referred to as the ‘business form’ in this article). If this statement is true, what factors will aid a firm in achieving the business form in its strategic plans? In this article, details of strategic planning in over 50 large firms taken from an empirical research sample are examined to illustrate which factors seem to lead to the business form of strategic plan in these firms.     

Corporate planning and management by objectives

Management by Objectives as described in literature has major shortcomings in not stressing that MbyO should start at the ‘top’, with a clear statement of the overall objectives of the business. MbyO assignments which are operated with middle management often have disappointing results, as the gap between their objectives and those at the higher levels becomes apparent. The practical difficulties of establishing overall objectives of the business is one reason, while another is that management consultants have sometimes operated corporate planning and MbyO as two separate assignments, or ‘techniques’, whereas they are two sides of the one coin. These articles detail how to establish overall objectives, which are then a firm basis for objectives throughout the business.     

Changing values and lifestyles

It has been apparent for several years that changes in people's values in the United States, have been occurring more frequently and having greater impact than has previously been experienced. The most significant impacts appear to be coming from people whose values and lifestyles are considerably less materialistic than traditional American values.Work at SRI, spanning more than a decade, had identified a new and rapidly growing group of people, the ‘inner directeds’; while more traditional groups—‘outer directeds’ and ‘money restricted’—have been declining as percentages of the population. These three major groups and their subdivisions are described in the article and particular emphasis is given to the inner directed group since it is likely to have the greatest impact on business, the market and government.     

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.     

Land-use planning in a world of shrinking resources

The paper contrasts two opposed strategies of land-use planning: the classical planning strategy of containment and conservation, and the strategy for outward displacement of land uses, here designated ‘Lemmings Rule’. It is shown how Lemmings Rule which has characterized recent years in Britain, despite the existence of the planning machine, has resulted in large-scale waste of the land resource through various landuse zones outward from the inner city. Statistics derived from the Second Land Utilisation Survey of the 1960s and sample resurveys of the 1970s are cited in support of the argument for a return to the insurance principle in planning.     

A framework for the strategic management of future tyre technology

Strategically managing technology faces one major problem: technology planners and managers who mistake ‘R & D management’ for ‘strategic technology management’. In globally competitive markets, survival and growth of tyre companies will increasingly depend upon the ability to manage technological resources strategically. This article proposes a process model which views the strategic management of technology as ‘techno-business management’, where technology and business strategy, planning and implementation can be facilitated by the use of portfolio frameworks and technology forecasting techniques in analysing and addressing the key strategic management areas of techno-business strategy development and strategy implementation.     

A standard-based business repository for on-demand manufacturing execution systems

In manufacturing execution system (MES) projects, knowledge is heterogeneous and is applied partially in each software package. Consistency is therefore critical. Some standard business reference models exist, such as the IEC/ISO 62264 standard for MESs (also known as ISA S95), or the Supply Chain Operations Reference model for supply chain planning (SCP) and execution (SCE). These reference models have some overlaps. For example, traceability is part of both MES and SCE packages. A consortium of manufacturing software editors for industry has launched an ‘MES on demand’ platform using services from different packages. This paper presents the enriched business repository model built to facilitate business heterogeneity. It is used to align different business repositories (B–B alignment) and different business and software packages (B–S alignment). It likewise serves to align customer requirements with the repository (B–C alignment). The consortium platform is then ‘S95 compliant’ when knowledge supported by the different actors is included.     

Reforming the strategic planning process: Integration of social responsibility and business needs

In this article the author argues that one of the prime organizational imperatives for the development of a responsive, operational, ‘corporate social policy’ must be reform of the strategic planning process. Indeed he argues that this reform is the essential pre-requisite to making the true integration of social responsibility and business needs.     

Strategic management: lessons from success and failure.

Is Corporate Planning a failure or a success? In this article David Hussey assesses the research which has been done on the planning process and concludes that Corporate Planning obviously has the potential to improve business performance but for many reasons this potential has not been realized. He then examines the attempts which are currently being made to persuade managers to ‘think strategically’, to use portfolio analysis scenarios and other techniques of strategic analysis. He asserts that to succeed, the planner or the consultant in planning must use these and other analytical approaches to help managers ‘to change the perceptual boundaries of the strategic problem’ and generate strategies and action programmes which will enable them to compete successfully in world markets.     

Strategic management and artificial intelligence

The presence today of ‘thinking’ robots has great implications for general management (as opposed to production management). The possibility is clear that within a decade a supercomputer may share or usurp functions of a corporate chief executive—functions that up to now have been thought unsharable. Now is the time to begin planning for such a development.     

Aggregate planning in decentralized organizations

This paper deals with aggregate planning problems in decentralized organizations, i.e. organizations where the suborganizations have a fair amount of autonomy in control because information load, uncertainty and fast changing circumstances limit the possibilities of centralized control. The functions of aggregate planning, its place in the overall control structure of the company and the control variables involved are discussed and subsequently the additional complications of a decentralized setting. As a typical example of aggregate planning problems in a network of semi-autonomous organizations the so-called ‘internal business cycle’ is discussed: due to this phenomenon the network is not able to follow smoothly its final demand but moves from shortages in one period to surplusses in another. The causes, various positive feedback mechanisms through variations in the buffers between the units, are analyzed and illustrated with a simple simulation model. The paper concludes with a discussion on the use of aggregate planning to improve the control of the network and to dampen this internal business cycle.     

Accountability lost: the rise and fall of double entry

This paper discusses the need for modern accounting systems to meet the criteria of both ‘accountability’ and ‘usefulness’ and argues that the traditional double entry book keeping system serves as a constraint on the achievement of system usefulness. We look at the problems associated with the double entry book keeping system and argue for its replacement with an events accounting system (EAS) model which is more appropriate to current business requirements. We also consider the need to extend the EAS model to more adequately meet the criterion of system usefulness. It is suggested that the integration of an EAS approach with that of a strategic information systems planning approach, facilitates the meeting of this objective.