ESSENTIALS FOR CORPORATE PLANNING
Planning is both an organizational necessity and a managerial responsibility. We may define planning as the activity by which managers analyze present conditions in order to determine ways of reaching a desired future. It is a process, rather than behavior, at a given point in time.
Corporate planning is a systematic, objective and comprehensive process of long-range planning, taking into consideration and organization’s resources, capabilities and environment in totality. in order to fully understand the concept we need to comprehend with it following characteristic features;
-it entails a sequence of steps.
-it has a long term perspective
-it is a continuous and an ongoing process
-it relates the organization with its environment.
STRATEGIC PLANNING AND TACTICAL PLANNING
Strategic planning differs from tactical planning in several ways. Strategic planning is comprehensive and encompasses both long and short term. It is systematic and a logical process, whereas tactical plans are ad hoc, based on whims and expediency.
OBJECTIVES OF CORPORATE PLANNING
The basic purpose of corporate planning is to improve strategic decision making in the organization, so that the resources and talents are applied to the most profitable uses. more specifically it serve the following objectives;
1. Assist in the fair and reasonable allocation of resources
2. Aids top level management analysis
3. Organizational objectives are appraised regularly
4. encourages internal examination.
5. Develops a futuristic outlook for the organization.
BENEFITS OF CORPORATE PLANNING
Several benefits accrue from sound and effective corporate planning and can be outline below;
1. A comprehensive view of the company
2. Improve ability of a firm to cope with change
3. improves communication between different divisions
4. Improvement in motivation
5. Provides framework for faster and less disruptive operation.
LIMITATIONS OF CORPORTATE PLANNING
There are some problems and difficulties in corporate planning. These limitations include the following;
1. Planning is a time-consuming and expensive process
2. It cannot be an overnight success
3. It might reduce organizational flexibility
4. It involves a measure of judgement.
5. It is not useful in a dying company.
MANAGEMENT BY OBJECTIVES (MBO)
MBO has been well recognized as it is basically seen as a management techniques based on goal and objective setting. The concept of MBO is attributed to Peter Drucker. today the MBO is widely used in large and complex organizations across the world and also in many fast growing organizations. There is no consensus with respect to the meaning, use and application of MBO in organizations.
Many of the variations in the steps that may appear in most other writings may be subsumed in these four basic steps. They are;
1. Setting the overall objectives
2. Developing the organization for an MBO system
3. Setting individual objectives
4. Periodic appraisals and feedback on progress.
STRENGTH OF MBO
1. It improves communication
2. Allow individuals to know what is expected.
3. Makes individual to be aware of organizational objectives
4. Leads to improves clarity of managerial role.
5. Improved commitment through motivation.
WEAKNESS OF MBO
The weakness of MBO includes
1. It may be used as a whip especially when tied to salary and wages
2. It may place emphasis on production
3. It may also place emphasis on quantitative objectives.
POSITVE MBO CHARACTERISTICS
-it combines sound management techniques for decision making
-feedback about performance
-participative decision making
MANAGEMENT BY EXCEPTION
This management principle is often and simply refers to as the exception principle. Even after delegating tasks, some managers still wants to know what is going on the various departments. thus the principle suggest that the controlling manager should be informed about an operation’ progress only if there is a significant deviation from the plans.
TARGET SETTING OR OBJECTIVE SETTING
A goal represents what the employee intends to do at some time in the future. Goals are however related to performance and the future rather than the present. they have two major functions, first they provide a basis for motivation and secondly they guide behavior.
Objectives on the other hand are more specific than goals. objectives or targets steer the organization or individual in the direction of the goal.
Objective setting enhances managerial performance as it;
1. Provides guidance
2. Motivates people
3. Facilitates learning and
4. Allows for coordination.
CHARACTERISTICS OF EFFECTIVE TARGETS OR OBJECTIVES
These include the following;
1. It should be measurable
2. It should be concise
3. It should be realistic
4. It should be flexible
5. It should be acceptable.